DEA Issues Final Rule Clarifying When a Voluntary Surrender of a DEA Registration is Effective

By John A. Gilbert, Jr. & Karla L. Palmer –

On Wednesday, October 5, 2011, the DEA published a final rule clarifying when a DEA registrant’s voluntarily surrender of its registration is effective.  The final rule amends 21 C.F.R. §§ 1301.52(a) and 1301.62(a) to make it clear that a registrant surrenders its DEA registration simply by submitting a Form 104 (for controlled substances registrants) or a Form 104c (for listed chemical registrants), or by providing written notice (in any format) to “any employee” of DEA expressing a desire to surrender a registration.  A voluntary surrender is immediately effective upon a DEA employee’s receipt of  a signed Form 104 or written notice, and thus does not require any further action on the part of the administration with respect to the surrender.

DEA’s “clarification” of a voluntary surrender is an important reminder of the perils of signing a voluntary surrender form (DEA Form 104) without the advice of counsel when presented with the form during an investigation or inspection.  The rulemaking also makes clear that a registrant can use any written notice to surrender a registration.   

Prior to this regulatory clarification, registrants, and at least one federal court, were at best unclear whether the DEA was required to issue a formal decision concerning the surrender after a registrant executed a Form 104.  For example, in 2004, a federal court in Utah found that a registrant was able to revoke his Form 104 voluntary surrender.  See Page v. Bruce, 2004 WL 72447 (D. Utah 2004).  The plaintiff physician in that case signed the Form 104 at his office during a DEA investigation.  The plaintiff stated that the DEA investigators threatened to report him to the assistant U.S. attorney’s office, stated that it was a “one-time deal,” and gave the plaintiff registrant a 30-minute window to make a decision whether to give up his registration.  Plaintiff signed the Form 104.

After having significant and immediate remorse over signing the Form 104, the plaintiff contacted DEA two hours later to revoke his surrender.  The plaintiff noted that, prior to signing the form, he was not advised, and thus did not understand, that: (a) DEA could not otherwise revoke his registration without issuing an order to show cause setting forth specific grounds, and a hearing; (2) prior to any hearing the registrant would have an opportunity to file a response and consult an attorney; (3) prior to any revocation the DEA would have the burden of proof at a hearing showing that the registrant posed an imminent danger to the public health and safety; (4) the registrant would have the right to an attorney present at the hearing, and be able to present and cross-examine witnesses; (5) the registrant would be entitled to appeal any administrative or legal decision resulting from the hearing; and, (6) the registrant would be able to retain his DEA registration throughout the course of the hearing and appeals process.  Id. at *3.

Despite DEA’s argument that the voluntary surrender was final and binding upon signing the Form 104, the court found, “[i]t is the DEA Administrator’s authority to revoke a DEA registration, not the registrant’s authority to revoke its own registration.  The statute, regulations and form do not authorize the termination or revocation of the registrant’s DEA privileges based solely on signing of a Form 104.”  Id.  Furthermore, the language in the Form 104 and federal law required the DEA to affirmatively act on a surrender to render it final; a registrant’s signing of the Form 104 was “merely a step in the process.”  2004 SL 72477. *6-7 (D. Utah 2004).        

DEA states in the final rule that a Form 104 (or Form 104c) surrender, or any surrender in writing, is effectively immediately upon receipt by any DEA employee without further action by the administration.  Thus, if a registrant signs the Form 104 when presented by a DEA investigator or agent, the registrant must be aware that he waives immediately several legal rights, including the right to notice of DEA’s allegations, legal counsel, a hearing, and appeal, among others (as described above).  In addition, DEA’s final rule would generally prohibit a registrant from later revoking the surrender if he has a case of buyer’s remorse or second thoughts about whether signing a Form 104 was a prudent course of action. 

Especially in light of DEA’s recent rulemaking, we believe even more strongly that DEA registrants should not sign a voluntary surrender without seeking the advice of legal counsel and certainly not under pressure or duress.  First, given DEA’s clarification of  21 C.F.R. §1301.52, a Form 104 is now effective immediately on receipt by a DEA employee, thus it provides a registrant no opportunity to reconsider its actions.  Second, a Form 104 itself contains many admissions, including, but not limited to, admissions that the registrant was “fully advised of its rights,” that the document was “freely executed,” and, most importantly, that it is signed “in view of my alleged failure to comply with the Federal requirements pertaining to controlled substances, and as an indication of my good faith in desiring to remedy any incorrect or unlawful practices on my part.”  

Even if the ultimate decision is to surrender the registration, registrants should consider the option of using another form of written surrender, so that the registrant will be able to make the decision knowingly, after advice of counsel, and with a full appreciation of the law, facts, circumstances and consequences surrounding the decision.  Also, the registrant can avoid unnecessary written statements or inferences on violations of the law and regulations.