Another Mystery Solved: DEA Issues a Final Decision Revoking Morris & Dickson’s Registration: Or Has It?

CBS News caused a bit of commotion last week in reporting that after a four-year delay, DEA issued a final order revoking Morris & Dickson’s DEA registration.  However, until today there had been no public information about this decision. This morning, the Federal Register published two DEA notices on the Morris & Dickson matter (here and here).

The first notice is a Final Decision and Order revoking the Morris & Dickson registration, but not effective until 90 days after publication. Usually, a Final Decision and Order is effective 30 days from publication. The second notice solved that mystery. In the second notice the DEA Administrator is issuing an Order granting the 90-day effective date from publication of the Final Decision. According to that Order, Morris & Dickson had requested a stay of the Final Decision to renew settlement negotiations. The government, while opposing the stay, stated it was willing to enter settlement discussions.  Thus, the DEA Administrator has given the parties 90 days to work something out.

Those of us tracking DEA matters had wondered about the long delay in publication of a Final Decision in this matter. On May 24, 2019, Morris & Dickson paid a $22 million civil penalty related to the failure to report suspicious orders and ignoring certain red flags in the distribution of controlled substances.  However, at the time the parties were unable to settle the pending administrative show cause action based on the same violations.  DEA held an administrative hearing on the alleged violations in May 2019 and, according to the proposed Final Decision and Order, the DEA Administrative Law Judge transmitted his Recommended Decision to revoke the DEA registration to the DEA Administrator on November 26, 2019.

The Recommended Decision has sat through three (3) DEA Administrators and more than 3 (three) years before notice of the current proposed actions. There have been other cases where Final Decisions and Orders have taken more than a year, but 3 ½ years is as long as we can remember. It also highlights how such delays are a disservice to the industry and public interest.

While this decision was pending, Morris & Dickson remained an authorized DEA registrant to continue to handle controlled substances.  It has continued to serve customers who have relied on the distributor to supply controlled substances and other medicine. But such activity has operated under a cloud which affected both suppliers and customers of Morris & Dickson given that the DEA registration was not issued a new registration but nor was it revoked. Except in the case of an immediate suspension, a DEA registrant remains authorized to handle controlled substances during the course of a show cause proceeding.  We also speculate that if DEA had any new evidence that Morris & Dickson was not otherwise complying with its regulatory responsibilities it would/should have taken further action during this time, otherwise the delay in issuing the Final Order would have been contrary to the public interest. For its part, during these four years, Morris & Dickson has had the opportunity to demonstrate the effectiveness of its remedial measures.

Neither the CSA nor regulations promulgated by DEA provide any deadline for issuing a Final Order and Decision.  But given that the issue for granting or revoking a DEA registration is whether the registration is in the “public interest” the delay does raise issues about the reasonableness of revoking a DEA registration more than 3 years later, having let Morris & Dickson continue to actively handle controlled substances during that time.

The resolution to the conundrum appears to be a potential settlement that could result in Morris & Dickson obtaining a new DEA registration, likely subject to a Memorandum of Agreement.  DEA was unwilling to settle the matter four years ago, so the Agency’s willingness to discuss a settlement now would have to be based on findings that Morris & Dickson’s recent compliance efforts justify granting a new registration at this time.