Proveedora Jiron, Inc. Edilberto Jiron, President; Denial of Application

On October 30, 2003, the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration (DEA), issued an Order to Show Cause to Proveedora Jiron, Incorporated, Edilberto Jiron, President (Proveedora) proposing to deny its application, executed on March 25, 2003, for DEA Certificate of Registration as a distributor of list I chemicals. The Order to Show Cause alleged in relevant part that granting the application of Proveedora would be inconsistent with the public interest as that term is used in 21 U.S.C. 823(h) and 824(a). The Order to Show Cause also notified Proveedora that should no request for a hearing be filed within 30 days, its hearing right would be deemed waived.

According to the DEA investigative file, the Order to Show Cause was sent by certified mail to Edilberto Jiron (Mr. Jiron), President of Proveedora at his firm's proposed registered location in Miami, Florida. A return receipt, which was part of the investigative file, indicates that the show cause order was received on November 12, 2003, on behalf of Proveedora. DEA has not received a request for hearing or any other reply from Proveedora or anyone purporting to represent the company in this matter.

Therefore, the Deputy Administrator of DEA, finding that (1) thirty days having passed since receipt of the Order to Show Cause, and (2) no request for hearing having been received, concludes that Proveedora has waived its hearing right. See Aqui Enterprises, 67 FR 12576 (2002). After considering relevant material from the investigative file in this matter, the Deputy Administrator now enters her final order without a hearing pursuant to 21 CFR 1309.53(c) and (d) and 1316.67 (2003). The Deputy Administrator finds as follows:

List I chemicals are those that may be used in the manufacture of a controlled substance in violation of the Controlled Substances Act. 21 U.S.C. 802(34); 21 CFR 1310.02(a). Pseudoephedrine and ephedrine are list I chemicals commonly used to illegally manufacture methamphetamine, a Schedule II controlled substance. As noted in previous DEA final orders, Methamphetamine is an extremely potent central nervous system stimulant, and its abuse is a persistent and growing problem in the United States. Yemen Wholesale Tobacco and Candy Supply, Inc., 67 FR 9997 (2002); Denver Wholesale, 67 FR 99986 (2002).

The Deputy Administrator's review of the investigative file reveals that on March 25, 2003, Proveedora submitted an application for DEA registration as a distributor of the list I chemicals ephedrine and pseudoephedrine. The application was submitted on behalf of Proveedora by Mr. Jiron. Upon receipt of the application, the DEA Miami Field Division initiated a pre-registration investigation in or around April or May of 2003.

According to a DEA investigative report contained in the investigative file, on May 29, 2003, a DEA diversion investigator from the Miami Field Division contacted Mr. Jiron by telephone to schedule an appointment. Apparently, the investigator explained to Mr. Jiron that “information and documents” were needed to process the firm's application. There is no mention in the report of what specific information or documents were requested of Mr. Jiron. Mr. Jiron is quoted as replying to the investigator that he felt uncomfortable “divulging this information” although the investigator explained that all documents and information will remain confidential.

Similarly, a review of a July 15, 2003, certified letter from the DEA Miami Field Division to Mr. Jiron reveals a written reminder to the applicant of a prior discussion he had with DEA personnel where it was explained to that “information and documents were needed to in order to proceed with his application.” Again, there is no reference in the aforementioned letter of what information was requested of Mr. Jiron for completion of his company's application for DEA registration. According to the investigative file, the certified letter was returned to DEA unclaimed.

The investigative file further reveals that on August 18, 2003, a DEA diversion investigator telephoned an employee of Proveedora to verify the firm's address, and left a message for Mr. Jiron to contact the DEA apparently in regard to the firm's pending registration application. However, Mr. Jiron never contacted DEA regarding the matter.

Pursuant to 21 U.S.C. 823(h), the Deputy Administrator may deny an application for Certificate of Registration if she determines that granting the registration would be inconsistent with the public interest as determined under that section. Section 823(h) requires the following factors be considered in determining the public interest:

(1) Maintenance of effective controls against diversion of listed chemicals into other than legitimate channels;

(2) Compliance with applicable Federal, State, and local law;

(3) Any prior conviction record under Federal or State laws relating to controlled substances or to chemicals controlled under Federal or State law;

(4) Any past experience in the manufacture and distribution of chemicals; and

(5) Such other factors as are relevant to and consistent with the public health and safety.

As with the public interest analysis for practitioners and pharmacies pursuant to subsection (f) of section 823, these factors are to be considered in the disjunctive; the Deputy Administrator may rely on any one or combination of factors, and may give each factor the weight she deems appropriate in determining whether a registration should be revoked or an application for registration denied. See, e.g., Energy Outlet, 64 FR 14269 (1999). See also Henry J. Schwartz, Jr., M.D., 54 FR 16422 (1989).

In rendering a final agency decision in this matter, the Deputy Administrator admittedly proceeds with great reluctance. Although a finding has been made that the applicant has waived its right to a hearing, nevertheless, the investigative file that has been provided ostensibly to assist the Deputy Administrator in rendering a ruling in this matter is at best, incomplete. The investigative file contains scant information about DEA's investigation of the applicant, virtually no information in any of the DEA investigative reports or correspondences on what information the agency requested of the applicant to complete its investigation, and no background information which may have explained why the applicant declined DEA's repeated requests for additional information.

Nevertheless, in balancing public interest concerns and in response to the ongoing public health threat brought on by the diversion of list I chemical products, the Deputy Administrator finds the balance of interests weighs in favor of denying the application of Proveedora.

In its Order to Show Cause, the agency references the applicant's failure to provide requested documents or statements within a reasonable time, and how such inaction on the part of the applicant may be deemed a waiver by the applicant to present such matters for consideration by the Administrator pursuant to the “Additional information” provision found at 21 CFR 1301.15. Notwithstanding the above concerns surrounding the incomplete DEA investigative file, the Deputy Administrator agrees that the record is silent with respect to information that would support Proveedora's application. However, with respect to the agency's request for additional information relevant to an application for the registration of a list I chemical distributor, the appropriate regulatory provision is found at 21 CFR 1309.35, which is identical in scope to § 1301.15 in that it provides:

The Administrator may require an applicant to submit such documents or written statements of facts relevant to the application as he deems necessary to determine whether the application should be granted. The failure of the applicant to provide such documents or statements within a reasonable time after being requested to do so shall be deemed to be a waiver by the applicant of an opportunity to present such documents or facts for consideration by the Administrator in granting or denying the application.

It appears from the investigative file that the owners of Proveedora were not compliant with repeated DEA request for information necessary to the processing of its registration application. Such information is a necessary part of the investigative function in determining the fitness of an applicant to handle highly abused list I chemical products. DEA has previously found that an applicant's failure to provide information necessary to the completion of a pending application was a relevant determination in a decision to deny the application pursuant to 21 CFR 1309.35. Callahan's Foods, 68 FR 43750 (2003). See also, CHM Wholesale Co., 67 FR 9985 (2002).

In light of the above, and the absence of evidence to the contrary, the Deputy Administrator is left to conclude that Proveedora cannot be entrusted with the responsibilities of a DEA registration. As a result, the Deputy Administrator further concludes that it would be inconsistent with the public interest to grant the application of Proveedora.

Accordingly, the Deputy Administrator of the Drug Enforcement Administration, pursuant to the authority vested in her by 21 U.S.C. 823 and 28 CFR 0.100(b) and 0.104, hereby orders that the pending application for DEA Certificate of Registration, previously submitted by Proveedora Jiron, Incorporated, Edilberto Jiron, President, be, and it hereby is, denied. This order is effective September 20, 2004.