Notices. Grant of individual exemptions

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BILLING CODE 4410-15-M DEPARTMENT OF JUSTICE Drug Enforcement Administration Archer's Trading Company; Revocation of Registration On February 6, 2006, the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration, issued an Order to Show Cause to Archer's Trading Company (Respondent), of Mechanicsville, Virginia. The Show Cause Order proposed the revocation of Respondent's DEA Certificate of Registration, 003001ATY, as a distributor of List I chemicals, on the ground that its “continued registration is inconsistent with the public interest.

” Show Cause Order at 1. The Show Cause Order also proposed the denial of any pending applications for renewal or modification of Respondent's registration. *Id.* The Show Cause Order specifically alleged that Respondent distributed List I chemicals to gas stations and convenience stores, which DEA has found are non-traditional retailers of these products for legitimate therapeutic demand. *Id.* at 2-3. The Show Cause Order alleged that during the period 2001 through 2003, Respondent “sold over-threshold amounts of pseudoephedrine to an unregistered individual [who] was subsequently convicted of the federal offense of unlawful distribution of listed chemicals.” *Id.* at 2.

The Show Cause Order also alleged that DEA investigators audited Respondent's handling of List I chemical products and found that it “was unable to account for nearly 3,800 bottles of 60-count combination ephedrine” products and that there were “numerous discrepancies in the firm's sales receipts.” *Id.* The Show Cause Order further alleged that “sometime in October-November 2004, [Respondent] moved its listed chemicals to an unapproved location in Ashland, Virginia.” *Id.* at 3.

Relatedly, the Show Cause Order alleged that Respondent violated Federal law by distributing products out of the Ashland location. *Id.* The Show Cause Order also alleged that Respondent had failed to report a theft of listed chemicals that had occurred at the Ashland location. *Id.* On February 13, 2006, the Show Cause Order was served on Respondent's counsel by certified mail, return receipt requested. On March 13, 2006, Respondent, through its counsel, requested a hearing.

The matter was assigned to Administrative Law

(ALJ)Judge Mary Ellen Bittner. On November 2, 2006, however, Respondent submitted a letter withdrawing its request for a hearing and waiving its right to a hearing. Accordingly, on November 8, 2006, the ALJ terminated the proceeding. On or about June 11, 2007, the investigative file was forwarded to me for final agency action. Based on Respondent's letter waiving his right to a hearing, I therefore enter this Final Order without a hearing based on relevant material contained in the investigative file, *see* 21 CFR 1301.43(e), and make the following findings. Findings Respondent is the holder of DEA Certificate of Registration, 003001ATY, which authorizes it to distribute the List I chemicals pseudoephedrine, ephedrine and phenylpropanolamine, at the registered location of 10247 Finlandia Lane, Mechanicsville, Virginia. The expiration date of Respondent's registration was June 30, 2004. On May 24, 2004, however, Respondent submitted a renewal application. I therefore find that Respondent's registration has remained in effect pending the issuance of this Final Order. *See* 5 U.S.C. 558(c). Both pseudoephedrine and ephedrine currently have therapeutic uses. *See, e.g., Tri-County Bait Distributors,* 71 FR 52160, 52161 (2006). 1 Both chemicals are, however, regulated under the Controlled Substances Act because they are precursor chemicals which are easily extracted from non-prescription products and used in the illicit manufacture of methamphetamine, a Schedule II controlled substance. *See* 21 U.S.C. 802(34); 21 CFR 1308.12(d). 1 The FDA is, however, currently proposing to remove combination ephedrine-guaifenesin products from its over-the-counter

(OTC)drug monograph and to declare them not safe and effective for OTC use. *See* 70 FR 40232 (2005). While Respondent also sought authority to handle phenylpropanolamine, there is no evidence in the file that it actually handled the product. Methamphetamine “is a powerful and addictive central nervous system stimulant.” *T. Young Associates, Inc.,* 71 FR 60567

(DIs)went to Respondent's registered location to conduct a regulatory inspection. As part of the inspection, the DIs conducted an audit of Respondent's handling of six combination ephedrine products during the period June 1, 2002, through June 10, 2003. Notwithstanding that the DIs used zero as the initial inventory for each of the audited products, they found that Respondent had large shortages in five of the products. For example, with respect to the sixty-count bottles of Mini Thins, Respondent was short 144,792 dosage units or 2413 bottles. As for the six-count packets of Mini Thins, Respondent was short 12,660 dosage units or 2,110 packets. With respect to the sixty-count bottles of Biotek Ephedrine, Respondent was short 80,640 dosage units or 1344 bottles. As for the six-count packets of Biotek Ephedrine, Respondent was short 8,856 dosage units or 1476 packets. Because zero was used as the starting inventory for each of the products (and thus any product actually on hand on the beginning date would not be counted), the actual shortages were likely greater than those calculated by the DIs. During the audit, the DIs also found that a substantial number of Respondent's sale invoices were incomplete. Some of the invoices lacked the purchaser's address information including its street and city. Others lacked information regarding the quantity and product size. During this inspection, Mr. Satterfield told the DIs that he was suspicious of the activities of one of his customer's, Fasil Mitha, the owner of Trio's Market/California Imports. Mr. Satterfield further related that Mitha had told him that he “sells to customers off the shelf.” Upon reviewing Respondent's sales invoices, the DIs determined that Respondent has sold nearly 47,000 dosage units of combination ephedrine products to Mitha between November 20, 2002, and June 4, 2003. This would amount to approximately 782 sixty-count bottles during a six-and-a-half month period. 2 2 According to the investigative file, Mitha subsequently pled guilty to violating 21 U.S.C. § 841(c)(2), which makes it a criminal offense to knowingly “possess[ ] or distribute[ ] a listed chemical knowing, or having reasonable cause to believe, that the listed chemical will be used to manufacture a controlled substance except as authorized by” the CSA. Mitha was sentenced to 135 months in prison. During the audit period, Respondent also sold large quantities to a store identified as Market #14, in Richmond, Virginia. More specifically, Respondent sold this entity 50,554 dosage units between August 13, 2002, and May 22, 2003. This would amount to approximately 842 sixty-count bottles. Sometime in either October or November 2004, Mr. Satterfield notified the DEA Richmond office that he had moved his business from his residence in Mechanicsville, Virginia, to a new location at 11262 Elmont Road, Ashland, Virginia. Mr. Satterfield requested that DEA visit his new location and approve his request for modification. As part of the process, Mr. Satterfield was asked to provide a complete customer list. Mr. Satterfield submitted a customer list, but it was missing address and phone number information for nine of his customers. He also failed to provide the address, phone number, social security number and date of birth for one of his employees. The DIs instructed Mr. Satterfield that he could not store listed chemicals at his new location until his request for the modification was approved. Mr. Satterfield stated that he would keep his List I products at his Mechanicsville location. Subsequently, in March 2005, the DIs obtained an incident report from the Hanover County Sheriff's Department pertaining to a theft that had occurred at the Ashland property on the night of November 1-2, 2004. According to the report, at approximately midnight, Mr. Satterfield had parked his delivery truck at his Ashland property. When Mr. Satterfield returned to the property the following morning, both the truck and a trailer that he stored merchandise in had been broken into. Mr. Satterfield reported that approximately $4,609 in merchandise had been stolen. Among the stolen items were various OTC drug products including listed chemical products. Mr. Satterfield expressed to the responding officer his concern for the consequences were DEA to find out about the theft because the products were not locked in a secure place. Mr. Satterfield further told the officer that he would never get a license if DEA found out about the theft. Mr. Satterfield did not report the theft to this Agency. On June 22, 2005, two DIs went to Respondent's Ashland facility. During the visit, the DIs found that substantial quantities of various List I chemical products were stored in the building and were on the delivery truck. Mr. Satterfield told the DIs that the products that were on the delivery truck were going to be offloaded and stored in the building that evening. Discussion Section 304(a) of the Controlled Substances Act provides that a registration to distribute a List I chemical “may be suspended or revoked * * * upon a finding that the registrant * * * has committed such acts as would render his registration under section 823 of this title inconsistent with the public interest as determined under such section.” 21 U.S.C. 824(a)(4). In making this determination, Congress directed that I consider the following factors:

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

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

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

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

(5)Such other factors as are relevant to and consistent with the public health and safety. *Id.* § 823(h). “These factors are considered in the disjunctive.” *Joy's Ideas* , 70 FR 33195, 33197 (2005). I may rely on any one or a combination of factors, and may give each factor the weight I deem appropriate in determining whether a registration should be revoked or an application for a renewal or modification of a registration should be denied. *See, e.g., David M. Starr* , 71 FR 39367, 39368 (2006); *Energy Outlet* , 64 FR 14269 (1999). Moreover, I am “not required to make findings as to all of the factors.” *Hoxie* v. *DEA* , 419 F.3d 477, 482 (6th Cir. 2005); *Morall* v. *DEA* , 412 F.3d 165, 173-74 (D.C. Cir. 2005). In this case, I conclude that factors one, two, four, and five establish that Respondent's continued registration would be “inconsistent with the public interest.” 21 U.S.C. 823(h). Accordingly, Respondent's registration will be revoked and its pending applications for renewal and modification of its registration will be denied. Factor One—Maintenance of Effective Controls Against Diversion Under DEA's regulations, a List I chemical distributor is required to “provide effective controls and procedures to guard against theft and diversion of List I chemicals.” 21 CFR 1309.71(a). The regulations further provide that “[i]n evaluating the effectiveness of security controls and procedures, the Administrator shall consider * * * [t]he adequacy of the registrant's or applicant's systems for monitoring the receipt, distribution, and disposition of List I chemicals in its operations.” *Id.* 1309.71(b)(8). “[M]aintaining proper records is * * * an essential part of providing effective controls against diversion.” *John J. Fotinopoulos* , 72 FR 24602, 24605 (2007). Here, the investigative file establishes that many of Respondent's sales invoices were missing necessary information for monitoring the distribution and disposition of List I products. More specifically, Respondent's invoices were frequently missing critical information including the street address and the city that its customers were located in. Moreover, the invoices also typically lacked information regarding the size of the List I products. Beyond that, the accountability audit found substantial shortages in five of the List I products which Respondent distributed. As found above, Respondent was short 144,792 dosage units or 2413 bottles of sixty-count Mini-Thins; it was also short 12,660 dosage units or 2,110 six-count packets of the product. Moreover, Respondent was short 80,640 dosage units or 1344 sixty-count bottles of Biotek Ephedrine; it was also short 8,856 dosage units or 1476 six-count packets of the product. Finally, because the DIs assigned a value of zero for the opening inventory for each product, the actual amount of the shortages may well have been even larger. Accordingly, I conclude that Respondent does not maintain effective controls against diversion and that this finding provides reason alone to conclude that its continued registration “is inconsistent with the public interest.” 21 U.S.C. 823(h). Factors Two and Four—Respondent's Compliance With Applicable Laws and Its Experience in the Distribution of Listed Chemicals The investigative file also establishes that Respondent failed to comply with Federal law in two other respects. First, Respondent clearly was distributing listed chemical products out of its Ashland facility which did not have a registration. Second, Respondent failed to report the November 2, 2004 theft of listed chemical products as required by 21 U.S.C. 830(b)(1)(C). Under Federal law, a registration is location specific. *See* 21 U.S.C. 822(e) (“A separate registration shall be required at each principal place of business * * * where the applicant * * * distributes * * * list I chemicals.”); *see also* 21 CFR 1309.23(a). Moreover, Federal law clearly provides that a registrant is “authorized to possess [or] distribute” a listed chemical only “to the extent authorized by their registration and in conformity with the other provisions of this subchapter.” 21 U.S.C. 822(b). Under DEA regulations, a request for a modification is treated as a new application. *See* 21 CFR 1309.61 (a “request for modification shall be handled in the same manner as an application for registration,” and, if approved, “the Administrator shall issue a new certificate of registration”). As I recently explained, a request for modification does not authorize a registrant to engage in listed chemical activities at a new location until the modification is approved and the new certificate of registration is issued. *See Fotinopoulos* , 72 FR at 24606. * Cf. Orlando Wholesale, L.L.C. * , 71 FR 71555, 71557

(2006)(applicant's change of address following pre-registration inspection renders application moot). Here, Mr. Satterfield was specifically told that he could not store listed chemicals at the Ashland facility until his request for modification was approved. Moreover, Mr. Satterfield told investigators that he would store Respondent's listed chemicals products at his Mechanicsville location. Mr. Satterfield nonetheless stored listed chemicals at the Ashland facility both in the building and in a truck which he parked there and distributed listed chemicals from this location. 21 U.S.C. 822(b) & (e). This violated Federal law. Moreover, based on the date of the theft (which occurred on November 2, 2004), as well as the DIs' finding that during the June 22, 2005 visit, substantial quantities of List I products were being kept at the Ashland location, it appears that Mr. Satterfield repeatedly violated Federal law. The evidence also establishes that Respondent failed to report to DEA the theft of listed chemicals that occurred on November 2, 2004. Under 21 U.S.C. 830(b)(1)(C), a registrant must report “any unusual or excessive loss or disappearance of a listed chemical under the control of the regulated person.” According to the responding officer, Mr. Satterfield failed to report the theft because he was concerned that if the Agency found out, it would not grant him a registration for his new location. Mr. Satterfield thus not only violated Federal law, making matters worse, he did so intentionally. Finally, the evidence establishes that Respondent sold extraordinary quantities of products to at least two stores, and that the owner of one of the stores, Mr. Mitha, subsequently plead guilty to violating 21 U.S.C. 841(c)(2). As found in *T. Young Associates* , 71 FR at 60572, and numerous other cases, non-traditional retailers (such as those supplied by Respondent) sell only small amounts of listed chemical products to meet legitimate demand. On average, these stores sell only $12.58 per month of combination ephedrine products to meet legitimate demand for these products as a bronchodilator. *Id.* The evidence establishes that in a six-and-a-half month period, Respondent sold the equivalent of 782 sixty-count bottles of combination-ephedrine products to Mr. Mitha. While the record does not establish the retail price Mr. Mitha sold the products at, in other cases DEA has found that smaller size bottles ( 48 count ) sold for approximately $5.99 to 6.99 each. *See Wild West Wholesale* , 72 FR 4042, 4043 (2007). Respondent's sales to Mr. Mitha's store so exceeded legitimate demand that it is clear that Respondent's products were diverted into the illicit manufacture of methamphetamine, a fact confirmed by Mr. Mitha's guilty plea. 3 The same is also true of Respondent's sales to Market #14. 3 Even if Mr. Satterfield lacked either actual or constructive knowledge that Mr. Mitha was diverting the products, his state of mind is irrelevant. As I have previously noted, the public interest standard does not require the Government to “prove that a Registrant has acted with any particular *mens rea.* Indeed, the diversion of List I chemicals into the illicit manufacture of methamphetamine poses the same threat to public health and safety whether a registrant sells the products knowing they will be diverted, sells them with a reckless disregard for the diversion, or sells them being totally unaware that the products were being diverted.” *T. Young* , 71 FR at 60572 (footnote omitted) (citing *D & S Sales* , 71 FR 37607, 37610-12 (2006), and *Joy's Ideas* , 70 FR 33195, 33198 (2005)). Respondent's violations of Federal law and its experience in distributing listed chemical products thus provide further grounds to conclude that its continued registration would be “inconsistent with the public interest.” 21 U.S.C. 823(h). Factor Five—Such Other Factors as Are Relevant To and Consistent With Public Health and Safety The illicit manufacture and abuse of methamphetamine have had pernicious effects on families and communities throughout the nation. Cutting off the supply source of methamphetamine traffickers is of critical importance in protecting the American people from the devastation wreaked by this drug. While listed chemical products containing pseudoephedrine and ephedrine are currently recognized as having legitimate medical uses, DEA orders establish that convenience stores and gas-stations constitute the non-traditional retail market for legitimate consumers of products containing these chemicals. *See, e.g., Tri-County Bait Distributors* , 71 FR at 52161-62; *D & S Sales* , 71 FR at 37609; *Branex, Inc.* , 69 FR 8682, 8690-92 (2004). DEA has further found that there is a substantial risk of diversion of List I chemicals into the illicit manufacture of methamphetamine when these products are sold by non-traditional retailers. *See, e.g., Joy's Ideas* , 70 FR at 33199 (finding that the risk of diversion was “real” and “substantial”); *Jay Enterprises, Inc.* , 70 FR 24620, 24621

(2005)(noting “heightened risk of diversion” if application to distribute to non-traditional retailers was granted). Accordingly, “[w]hile there are no specific prohibitions under the Controlled Substances Act regarding the sale of listed chemical products to [gas stations and convenience stores], DEA has nevertheless found that [these entities] constitute sources for the diversion of listed chemical products.” *Joey Enterprises, Inc.* , 70 FR 76866, 76867 (2005). *See also TNT Distributors* , 70 FR 12729, 12730

(2005)(special agent testified that “80 to 90 percent of ephedrine and pseudoephedrine being used [in Tennessee] to manufacture methamphetamine was being obtained from convenience stores”). 4 The risk of diversion is especially great where, as here, a registrant cannot account for large quantities of the products it handles. 4 *See OTC Distribution Co.* , 68 FR 70538, 70541

(2003)(noting “over 20 different seizures of [gray market distributor's] pseudoephedrine product at clandestine sites,” and that in eight-month period distributor's product “was seized at clandestine laboratories in eight states, with over 2 million dosage units seized in Oklahoma alone.”); *MDI Pharmaceuticals* , 68 FR 4233, 4236

(1)Distributing listed chemicals from a facility which was not registered and likely did so for months, and,

(2)failing to report to DEA the theft of listed chemicals from its non-approved location. Finally, the evidence supports a finding that a substantial portion of Respondent's products were diverted. Accordingly, I therefore conclude that Respondent's continued registration “is inconsistent with the public interest.” *Id.* § 823(h). Order Accordingly, pursuant to the authority vested in me by 21 U.S.C. 823(h) & 824(a), as well as 28 CFR 0.100(b) & 0.104, I order that DEA Certificate of Registration, 003001ATY, issued to Archer's Trading Company be, and it hereby is, revoked. I further order that Archer Trading Company's pending applications for modification and renewal of its registration be, and they hereby are, denied. This order is effective August 31, 2007. Dated: July 20, 2007. Michele M. Leonhart, Deputy Administrator. [FR Doc. E7-14815 Filed 7-31-07; 8:45 am] BILLING CODE 4410-09-P DEPARTMENT OF JUSTICE Drug Enforcement Administration [Docket No. 05-33] Holloway Distributing; Revocation of Registration On May 25, 2005, the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration, issued an Order to Show Cause to Holloway Distributing, Inc. (Respondent), of Puxico, Missouri. The Show Cause Order proposed the revocation of Respondent's DEA Certificate of Registration, 003219HIY, and the denial of Respondent's pending application for renewal of its registration, on the ground that its continued registration “is inconsistent with the public interest.” Show Cause Order at 1. More specifically, the Show Cause Order alleged that Respondent distributed list I chemical products containing pseudoephedrine, a precursor chemical used in the illicit manufacture of methamphetamine, a schedule II controlled substance, to convenience stores, gas stations, liquor and video stores, and bait and tackle shops in various parts of Missouri, the State which has repeatedly ranked first in the nation in the number of clandestine methamphetamine lab seizures. *Id.* at 2. The Show Cause Order alleged that these establishments constitute the non-traditional market for consumers who purchase pseudoephedrine products for legitimate uses. *Id.* at 7. The Show Cause Order further alleged that Respondent's “sale of pseudoephedrine products is inconsistent with the known legitimate market and known end-user demand for products of this type.” *Id.* The Show Cause Order also alleged that in March 2004, DEA investigators conducted verifications of several entities which Respondent identified as its customers. *Id.* at 3-4. According to the allegations, DEA investigators determined that several of Respondent's customers were purchasing additional list I chemical products from other distributors and also selling other products such as starting fluid and lantern fuel which are used in the illicit manufacture of methamphetamine. *Id.* The Show Cause Order next alleged that in March 2004, as part of a regulatory investigation of Respondent, DEA investigators conducted an accountability audit of five list I chemical products. *Id.* at 5. The Show Cause Order alleged that there were either overages or shortages for each product, and that DEA investigators found that Respondent had “failed to notify the agency of a significant loss of List I chemical products as required by 21 U.S.C. 830(b)(1)(C) and 21 CFR 1310.05(a)(3).” *Id.* Finally, the Show Cause Order alleged that between November 7, 2003, and April 1, 2004, Respondent sold pseudoephedrine products on numerous occasions to one Keith Frankum, notwithstanding that Frankum had presented a sales tax exempt certificate which indicated that his business address was a local storage facility and was vague when asked about the nature of his business. *Id.* at 5-6. According to the allegations, notwithstanding that local law enforcement authorities had told one of Respondent's employees that Frankum's brother was “a meth cook,” and that its employees “referred to [Frankum] as ‘the drug guy' whenever he arrived at Holloway to make a purchase,” Respondent made additional sales of pseudoephedrine products to him. *Id.* at 6. The Show Cause Order further alleged that in early April 2004, Frankum was arrested and during a search incident to the arrest, was found to be in possession of twenty boxes of pseudoephedrine products sold by Respondent, an invoice from Respondent, and a handwritten note which read: “Be careful when leaving here!” *Id.* at 5. According to the allegations, Frankum subsequently told DEA investigators that he sold pseudoephedrine “to several repeat customers” and that it “was a big seller because it was used to make drugs.” *Id.* at 6. The Show Cause Order also alleged that Frankum admitted that he had a prior arrest for possession of methamphetamine and that he had done “a lot of meth” five years earlier. *Id.* The Show Cause Order further alleged that Respondent never reported to DEA its sales to Frankum. *Id.* at 5. On June 24, 2005, Respondent, through its counsel, requested a hearing. The matter was assigned to Administrative Law Judge

(ALJ)Gail A. Randall, who conducted a hearing in Arlington, Virginia, on February 7, 2006, and in Cape Girardeau, Missouri, on February 22-23, 2006. During the hearing, both parties called witnesses to testify and introduced documentary evidence. Following the hearing, both parties submitted briefs containing proposed findings of fact, conclusions of law and argument. On December 19, 2006, the ALJ submitted her recommended decision (hereinafter, ALJ). In her decision, the ALJ concluded that the Government had “initially * * * met its burden of proof * * * by demonstrating that the Respondent made ‘grossly excessive sales' of listed chemical products between October 1, 2003, and March 23, 2004.” ALJ at 40 (citing FOF 26). The ALJ also acknowledged DEA precedent holding that a registrant's grossly excessive sales support a finding that its products were diverted and that its continued registration would be inconsistent with the public interest. *Id.* at 40-41. The ALJ concluded, however, that Respondent's continued registration would not be inconsistent with the public interest for two reasons. *Id.* at 41. First, the ALJ noted that Respondent had “demonstrated its willingness and its ability to develop and implement changes in its business processes consistent with the [agency's] recommendations.” *Id.* Second, the ALJ relied on Missouri's recently enacted restrictions on pseudoephedrine sales. According to the ALJ, the statute showed that “the State will be monitoring the gelcap and liquid pseudoephedrine products, if any, found in the methamphetamine labs,” and that “[s]uch heightened scrutiny leads to the conclusion that, if the products of the Respondent, as well as other distributors of List I chemical products in Missouri, are found in illicit methamphetamine laboratories, the State will close the legislative loophole afforded these limited products.” *Id.* The ALJ reasoned that “[u]ntil such time as the problem is substantiated * * * the possibility of * * * Respondent's products being diverted [should] not be relied upon to revoke” its registration. *Id.* The ALJ therefore recommended that I not revoke Respondent's registration and not deny its pending application for renewal. On January 5, 2007, the Government filed exceptions to the ALJ's decision. On February 1, 2007, the ALJ forwarded the record to me for final agency action. Having reviewed the record as a whole, I hereby issue this decision and final order. I adopt the ALJ's findings of fact except as noted herein. I reject, however, the ALJ's conclusions of law with respect to factors one, two, four and five. I further reject the ALJ's ultimate conclusion that Respondent's continued registration “would not be inconsistent with the public interest.” *Id.* Accordingly, I also reject the ALJ's recommendation that Respondent's registration should not be revoked and its pending renewal application should not be denied. I make the following findings. Findings of Fact Respondent is a Missouri Corporation which is located at 210 East Owen Avenue, Puxico, Missouri. ALJ Ex. 2. Respondent is co-owned by Mr. Terry Holloway and his wife, Debbie Holloway. Tr. 720. Mr. Holloway is Respondent's president. *Id.* Respondent is a wholesale distributor of approximately 10,000 products including groceries, restaurant foods, candy, cigarettes, and tobacco. *Id.* at 724. Respondent, which has been registered since 1998, currently holds DEA Certificate of Registration, 003219HIY, which authorizes it to distribute list I chemicals. Gov. Ex. 1 & 2. Based on Respondent's submission of a timely renewal application in September 2004, Respondent's registration has remained in effect pending the final order in this matter. Gov. Ex. 2. Methamphetamine and the Market for List I Chemicals Pseudoephedrine is lawfully marketed under the Food, Drug and Cosmetic Act as a decongestant. Gov. Ex. 4, at 4. Pseudoephedrine is, however, also regulated as a list I chemical under the Controlled Substances Act

(CSA)because it is easily extracted from non-prescription drug products and used in the illicit manufacture of methamphetamine, a schedule II controlled substance. *See* 21 U.S.C. 802(34); 21 CFR 1308.12(d). Methamphetamine “is a powerful and addictive central nervous system stimulant.” *T. Young Associates, Inc.* , 71 FR 60567

(2006)(other citations omitted). As noted in numerous DEA final orders, the illegal manufacture and abuse of methamphetamine pose a grave threat to this country. *See id.* Methamphetamine abuse has destroyed numerous lives and families. *Id.* Moreover, because of the toxic nature of the chemicals used in making the drug, illicit methamphetamine laboratories cause serious environmental harms. *Id.* The illicit manufacture and abuse of methamphetamine is an extraordinarily serious problem in Missouri. According to the record, during the years 2001 through 2004, Missouri repeatedly ranked first in the number of law enforcement seizures of methamphetamine laboratories. *See* Gov. Ex. 3, at 4. More specifically, in 2001, law enforcement authorities seized 2,181 labs; in 2003, 2,885 labs; and in 2004, 2,782 labs. *Id.* Moreover, while legislation enacted by Missouri in June 2005 (which made pseudoephedrine and ephedrine in tablet-form a schedule V controlled substance and limited its sale to pharmacies), appears to have led to a substantial reduction in the number of meth. lab seizures, law enforcement authorities still seized 745 labs in the latter half of 2005. *See* Gov. Ex. 28. The Missouri statute, however, exempts pseudoephedrine in liquid and liquid-filled gel caps. *See* Mo. Rev. Stat. 195.017.17; Tr. 309-11. Thus, in Missouri, these products can be sold by non-pharmacies. According to the record, “[w]hile the vast majority of clandestine laboratories seized have utilized tableted pseudoephedrine and ephedrine products, gel-caps and liquid dosage form products can easily serve as a source of precursor material for the production of methamphetamine.” Gov. Ex. 4, at 8. Furthermore, DEA studies show that pseudoephedrine “can be easily extracted” from liquid and gel cap products by using reagents and solvents which are “readily available at hardware and auto parts stores in the U.S.” *Id.; see also* Gov. Ex. 6 (discussing study by DEA chemist who was able to extract pseudoephedrine from gel caps and obtain a 68 percent yield using equipment typically found in meth. labs). The record further establishes that in those States (including Missouri) which have exempted gel cap and liquid form listed chemical products, traffickers are using exempted products to make meth. *See* Gov. Ex. 5, at 13-14; Gov. Ex. 6, Gov. Ex. 7, Tr. 321-22. The Government also established that there is both a traditional and non-traditional market for pseudoephedrine. According to Jonathan Robbin, who has testified as an expert in statistical analysis of demographic, economic, geographic, survey and sales data in numerous DEA proceedings and several criminal and civil trials, over 97 percent of all non-prescription drug products are sold by drug stores, pharmacies, supermarkets, large discount merchandisers, and electronic shopping and mail order houses. Tr. 173. Mr. Robbin further testified that sales of non-prescription drugs by convenience stores (including both those that sell and do not sell gasoline), “account for only 2.2% of the overall sales of all convenience stores that handle the line and only 0.7% of the total sales of all convenience stores.” Gov. Ex. 8, at 5. Based on his study of U.S. Government Economic Census data, survey data obtained by the National Association of Convenience Stores, and commercially available point-of-transaction data, Mr. Robbin further stated that only about 1.2 percent of all non-prescription drug products are sold at convenience stores, Tr. 173, and cold remedies (including pseudoephedrine products) “are [a] * * * much smaller” portion of this. *Id.* at 174; Gov. Ex. 8, at 5. Mr. Robbin thus explained that convenience stores “definitely constitute a ‘nontraditional market’ for the sale of [OTC] non-prescription drug pseudoephedrine” products. Gov. Ex. 8, at 5. Mr. Robbin further testified that “the normal expected retail sale of pseudoephedrine

(Hcl)tablets in a convenience store may range between $0 and $40 per month[,] with an average of $19.85 per month,” and that the expected sales range of Actifed tablets in a convenience store ranges between $0 and $20 [per month], with an average of $ 8.68.” *Id.* at 8; Tr. 176. Mr. Robbin explained that “[a] monthly retail sale of $60 of pseudoephedrine

(Hcl)* * * would be expected to occur less than one in 1,000 times in random sampling,” and [a] monthly retail sale of $100 a month of pseudoephedrine

(Hcl)or of $50 of Actifed tablets would be expected to occur about once in a million times in random sampling.” Mr. Robbin also stated that gas stations without convenience stores, liquor stores, sporting goods stores, bait shops, video stores, gift stores, and head shops sell only “trace amounts” of these products. Gov. Ex. 8, at 8. DEA investigators provided Mr. Robbin with a list of 1,371 transactions in which Respondent distributed either Select Brand [s]udafed or [a]ctifed during the period from October 1, 2003, through March 23, 2004. *Id.* at 12. The products were sold to 94 stores which included convenience stores, gas stations and liquor stores. *Id.* According to the data, Respondent distributed 3,129 packages of Select Brand [s]udafed, each containing 24 tablets, and 5,858 packages of Select Brand [a]ctifed, each also containing 24 tablets. Gov. Ex. 8, at 12-13. Based on information obtained from Thomson Micromedex's Red Book, Mr. Robbin initially calculated an implied retail sales value of $4.58 for Respondent's sudafed product and $4.34 for the actifed product. *Id.* at 12. Based on these values, Mr. Robbin then tabulated the imputed monthly sales of these products by Respondent's customers and calculated the probability that the sales were to meet legitimate consumer demand for the products. *See* Gov. Ex. 9, at B1-B10. Mr. Robbin found that ten of the seventy-five stores selling the sudafed had sold ten times the expected amount, and another five stores sold five to ten times expectation. Gov. Ex. 8, at 14. With respect to the actifed product, “49 of the 71 stores (69.01%)” sold amounts which Mr. Robbin described as “extraordinarily excessive when compared to normal expectations.” *Id.* at 15. Respondent did not, however, sell name brand Sudafed and Actifed, but rather, a generic brand. The evidence established that the suggested retail price

(SRP)of these products was $1.83 for the generic sudafed and $2.81 for the generic actifed although Respondent did not produce any evidence establishing that its customers actually sold the product at the SRP. 1 *See* Gov. Ex. 16, at 7, Gov. Ex. 23, at 2. 1 Indeed, there is evidence that some of Respondent's customers sold it for even higher prices than that used by Mr. Robbin. See Tr. 412. The Government therefore entered as a rebuttal exhibit a new tabulation of the average monthly sales by Respondent's customers. *See* Gov. Ex. 29. According to this table, three stores were selling the sudafed products at ten times expectation; another eight stores were selling the product at five to seven times expectation. *Id.* at B7. The data for the stores selling actifed was even more pronounced. This tabulation showed that one store was selling at over fifty times expectation, seven stores were selling at twenty-five to fifty times expectation, eleven stores were selling at ten to twenty-five times expectation, and another eleven stores were selling at five to ten times expectation. *Id.* at B10-B12. In his testimony, Mr. Robbin acknowledged that reducing the estimated retail price by half would “certainly put more stores into the insignificant range.” Tr. 279. Mr. Robbin, however, further testified that it would “still leave a great many stores in the significant range.” *Id.* Mr. Robbin also stated that even if he reduced the estimated retail “price in half,” he would still conclude that Respondent's sales were “excessive.” *Id.* at 254. Mr. Robbin further testified that he “rule[d] out [the] location [of Respondent's customers] as being a factor in the degree of sales.” *Id.* at 183. According to Mr. Robbin, wherever [people] live in Missouri,” there is a “a major pharmacy [or] chain pharmacy” within “a half an hour drive time.” *Id.* at 181. While acknowledging that a convenience store might be a five to ten minute drive, Mr. Robbin reiterated that “ninety-seven percent” of shoppers “buy their non-prescription drugs in pharmacies and supermarkets.” *Id.* According to Mr. Robbin's testimony, “non-prescription drugs are bad sellers in convenience stores. They are given very little shelf space, and * * * are classed among the impulse goods, meaning that nobody goes to a convenience store, or few people do, to buy them specifically.” *Id.* at 182. Mr. Robbin thus “rule[d] out location as being a factor in the degree of sales,” because while location might influence sales fifty percent either way (depending upon whether the store was in a rural or urban area), the differences between the expected sales range and Respondent's actual sales were “vastly greater than fifty percent.” *Id.* at 183-84. The ALJ found credible the testimony of Mr. Terry Holloway (Respondent's President and co-owner) that Doniphan, Missouri, a town in Respondent's market, is forty miles from a store in the traditional market. ALJ at 9-10. Mr. Holloway also testified that Doniphan was a town of 3,000 people and had “a lot of attractions” such as a river, which apparently is popular with canoeists, and campgrounds. Tr. 727. Mr. Robbin's conclusion that Respondent's customers had engaged in excessive sales was based, however, on sales that occurred in the October to March time frame, a period in which it does not seem likely that tourists would be flocking to Doniphan to go camping or canoeing. But in any event, Mr. Holloway's testimony does no more than call into question Mr. Robbin's conclusion regarding a few stores. 2 Neither it nor the ALJ's observation that “in some instances * * * Respondent sold list I chemical products in quantities much lower than expected,” ALJ at 12 (FOF 27), refutes Mr. Robbin's ultimate finding that Respondent “provides services to retailers outside the traditional market for [OTC] drug products and frequently has sold products containing pseudoephedrine

(hcl)in extraordinary excess of normal or traditional demand.” Gov. Ex. 8, at 17-18. 2 Mr. Holloway also testified that Fisk, Missouri, another town in Respondent's market, was located fifteen miles from a store in a traditional market. Tr. 729. Beyond the fact that fifteen miles on rural roads does not seem to be an excessively long drive, Mr. Robbin's analysis lists only one store as being located in Fisk. *See Generally* Gov. Ex. 29. Respondent's evidence thus does not provide reason to question Mr. Robbin's conclusion that numerous other stores had engaged in excessive sales of pseudoephedrine products. The DEA Investigation of Respondent In September 2003, a Diversion Investigator

(DI)in the St. Louis Field Division was advised by a DEA Special Agent with the Cape Girardeau field office that Southeastern Missouri Drug Task Force officers were concerned that pseudoephedrine products being found in clandestine meth. labs had come from Respondent's customers. Tr. 348, 354-55. In particular, the Special Agent told the DI that “some of [Respondent's] customers were selling case quantities * * * out the back door” of their stores. *Id.* at 355. The DI advised his Group Supervisor of the report and Respondent was scheduled for a regulatory investigation. *Id.* at 348-49. On March 23, 2004, the DI visited Respondent's registered location and conducted an inspection. Gov. Ex. 13. As part of the inspection, the DI conducted an accountability audit of five highly diverted list I chemical products including three products which contain 30 mg. of pseudoephedrine hydrochloride per tablet (Select Brand sudafed, Select Brand Sinus Allergy, and Contac Sever Cold & Flu Max Strength) and two products which contain 60 mg. of pseudoephedrine tablet (Select Brand Antihistamine Nasal Decongestant (actifed) and BC Allergy Sinus Headache). Gov. Ex. 21; Tr. 389. Accordingly, in the presence of one Respondent's employees, the DI inventoried these products. Gov. Ex. 21. The DI then proceeded to audit Respondent's handling of the products during the period beginning on October 1, 2003, through the close of business on March 23, 2004, and recorded the results on a chart. 3 Gov. Ex. 22. Initially, the DI concluded that one of the products, Select Brand pseudoephedrine had an overage. *Id.* at 1. The DI also determined that Respondent had shortages in each of the remaining products. *Id.* Most significantly, Respondent was short 105 boxes of Select Brand Antihistamine Nasal Decongestant. *Id.* Respondent was also short five boxes of Select Brand Sinus Allergy, two boxes of Contac Severe Cold and Flu, and one box of BC Allergy Sinus. *Id.* 3 The DI established the beginning count based on Respondent's computer records. Tr. 392. The first chart did not, however, include Respondent's manual adjustments to inventory because Respondent had not properly documented them. Tr. 394-95. Nonetheless, the DI gave Respondent the “benefit of the doubt that [the] manual adjustments * * * were * * * correct” and prepared a second chart. *Id.* Respondent gave two explanations for the adjustments:

(1)That the sudafed and actifed products were stored next to each other on the shelf and that an employee could have recorded one product when he had actually pulled the other product for distribution, and

(2)that some products were bound together so that six boxes of a product might have been recorded as one box. *Id.* at 396. According to the second computation chart, Respondent still had shortages of each product. The most significant shortage (Select Brand [a]ctifed) had been reduced from 105 boxes to one. Gov. Ex. 22, at 2; Tr. 397-98. Another product, Select Brand [p]seudoephedrine, had gone from an overage of thirteen boxes to a shortage of thirteen boxes. 4 Gov. Ex. 22, at 2. 4 There were no adjustments to the inventories of the Contac Severe Cold & Flu and BC Allergy Sinus products. *See* Gov. Ex. 22, at 1-2. After adjustments, the shortage in the remaining product, Select Brand Sinus Allergy was reduced by two boxes. *Id.* Following the initial on-site inspection, the DI visited seven of Respondent's customers including several convenience stores, a liquor store, a video store, and a gas station. Tr. 403-04; Gov. Ex. 25. The first store the DI visited was Millie's, a Citgo gas station located in Wappapello, Missouri. There, the DI found that the store was selling not only listed chemicals products it obtained from Respondent, but also Pro Active ephedrine products that were carried by another supplier. Tr. 405-06. The DI next visited Green's Grocery in Doniphan, Missouri. *Id.* at 406. There, the DI also found that the store was selling Pro Active ephedrine products. *Id.* The DI interviewed Green's owner, who told her that twice a week, it purchased twelve boxes of twenty-four Select Brand [s]udafed from Respondent, and that it also purchased 72 boxes of 40 count Pro Active Ephedrine Multi-Action. *Id.* The DI also found that Green's was selling lantern fuel and starting fluid, two products which are used in the illicit manufacture of methamphetamine. *Id.* at 409. The DI next went to Bart's Package Store, which is also located in Doniphan, Missouri. *Id.* at 410. There, the store owner told the DI that he purchased twelve boxes of Select Brand Pseudoephedrine (24 count) and twelve boxes of Select Brand Antihistamine (24 count) from Respondent every three weeks and sold the products for $7 a box. *Id.* at 412. 5 The DI also found that Bart's sold starting fluid and lantern fuel. *Id.* at 416. According to the father of the owner, initially Bart's had purchased three cans of starting fluid but was then ordering ten cases a week to meet demand. *Id.* at 417-18. 5 According to the DI, several other DEA investigations had found that Bart's had purchased large quantities of listed chemical products from other distributors in the period circa 2000. Tr. 414-15. Most significantly, Bart's had purchased “over 6 million dosage units from Heartland Distributing for $563,234,” during a three year period. *Id.* at 415. The DI testified, however, that she did not know whether Bart's had purchased listed chemical products from Respondent during this period. *Id.* at 416. While this testimony is not directly probative of Respondent's conduct, it does support what DEA has found in numerous cases—that non-traditional retailers of listed chemical products are frequently conduits for diversion. The DI then visited the Country Junction, a convenience store which is also located in Doniphan. *Id.* at 419. There, the DI found that the store was not only purchasing Select Brand sudafed from Respondent, it was also buying Pro Active Multi-Action Ephedrine from another distributor. *Id.* at 419-20. Next, the DI visited JB's Grocery, in Neelyville. *Id.* at 422. Here again, the DI found that the store was purchasing listed chemical products from both Respondent and another supplier. *Id.* at 423. The store was also selling starting fluid and lantern fuel. 6 *Id.* 6 The record indicates that JB's had purchased large quantities of pseudoephedrine from another distributor several years earlier. Tr. 424. On April 5, 2004, after discussing the results of the investigation with her supervisor, the DI called Mr. Marvin Wheeler, who had served as Respondent's contact person during the inspection. *Id.* at 521. The DI told Mr. Wheeler that the office had decided that a “verbal warning” would suffice to address Respondent's failure to report the significant loss of list I chemical products, based on the products that were missing during the audit. *Id.* at 521, 531-32. As for Respondent's lack of documentation for its inventory adjustments, the DI “suggested that they develop a standard procedure to * * * investigate [a] shortage or surplus and document it thoroughly.” *Id.* at 532. Later that day, the DI received a telephone call from the same Cape Girardeau based Special Agent informing her that one Keith Frankum had been stopped by local law enforcement officers after leaving Respondent's premises. *Id.* at 356, 435-36. During the stop, which had occurred on April 1, 2004, the authorities found twenty boxes of pseudoephedrine products, an invoice documenting that Respondent had sold the products to Frankum, and a handwritten note which stated: “Be Careful Leaving here!!” Gov. Ex. 23. The investigation determined that the note had been written by Jennifer Holloway, the daughter of Respondent's owners who then worked in the customer service department. 7 Tr. 438. 7 The ALJ also found that “the record contains no evidence that Jennifer Holloway knew Mr. Frankum, and it is unclear why she passed to note to him.” ALJ at 21 (FOF 62). According to her mother, when asked why she passed the note, she “didn't really know.” Tr. 702. Ultimately, it is not necessary to determine Ms. Holloway's motive to resolve the issues in this case. The DI subsequently determined that Frankum had purchased a total of 92 boxes of listed chemical products (58 boxes of Select Brand actifed (24 count) and 34 boxes of Select Brand pseudoephedrine (24 count) on five separate occasions beginning on November 7, 2003, and ending on April 1, 2004. *Id.* at 453-54. According to the testimony of Jane Brotherton, Frankum had called Respondent and specifically asked whether it carried Sudafed and Actifed. *Id.* at 541. Notwithstanding that Frankum's question made her suspicious, *id.* , Frankum was subsequently allowed to purchase these products upon his presentation of a Missouri Retail Sales License which indicated that the location of his business was a storage unit located in Dexter, Missouri. *Id.* at 543; *see also* Resp. Ex. 10. During Frankum's first visit to Respondent, Ms. Brotherton asked him what type of business he had. Tr. 457. Frankum was vague. *Id.; see also id.* at 548 (testimony of Ms. Brotherton regarding Frankum's third visit; “there was never any reference to opening up a business”). Moreover, Frankum paid cash for each purchase. *Id.* at 457 & 545; *see also* Resp. Ex. 11, at 1-5. Even after two other employees who live in Dexter confirmed to Ms. Brotherton that the address given by Frankum was a storage unit, Respondent made additional sales of listed chemical products to him. Tr. 544-47. Moreover, two weeks after Frankum's first purchase, a local police official told Ms. Brotherton that “Frankum's brother was a meth cook.” *Id.* at 459, 505. While Ms. Brotherton related this information to other employees, *id.* at 459, she apparently never told Respondent's owners about this or any of the sales. *Id.* at 559-60. Some of Respondent's employees who worked in the customer service department referred to Frankum as “the drug guy.” *Id.* at 460; *see also* at 564 (testimony of Jane Brotherton; “I'm sure the girls that worked up front probably [referred to Frankum as ‘the drug guy’] in conversation.”). While Frankum was suspicious enough to prompt Ms. Brotherton to call the local police after his numerous visits, *see* Resp. Ex. 9, Respondent sold listed chemical products to him up until his arrest. Respondent did not, however, report any of these sales to DEA. Tr. 491. Moreover, during the March 2004 inspection, the DI “specifically asked [Respondent's liaison] about intelligence information.” Tr. 491. Even then, Respondent did not mention the sales to the DI. *Id.* After his arrest, DEA personnel interviewed Frankum. *Id.* at 451-52. Frankum admitted that he had previously been arrested for assault and possession of methamphetamine and stated that “he did a lot of meth about five years ago.” *Id.* at 451. Respondent told investigators that he sold the pseudoephedrine products to five main customers, whom he learned of “through word of mouth”; that pseudoephedrine was a big seller “because it was used to make drugs”; that “[h]e didn't think anyone purchased the product for allergies or sinus problems”; and that “[h]e knew that some of his customers likely used [the] pseudoephedrine that he sold them to make methamphetamine.” *Id.* at 452-53. Frankum subsequently pled guilty to possession of a methamphetamine precursor drug with intent to manufacture amphetamine, methamphetamine or any of their analogs, a felony offense under Missouri law, and was sentenced to three years of imprisonment. Resp. Ex. 13, at 1. Upon investigating the circumstances of Respondent's sales to Frankum, DEA investigators re-evaluated their initial position regarding its continued registration and requested that it surrender its registration. Tr. 483-86. Respondent's owner initially agreed to but then changed his mind. *Id.* at 484-85. This proceeding was then initiated. Respondent's Remedial Measures and Its Policies The ALJ found that Respondent undertook several corrective actions to prevent diversion following the DEA inspection. These measures included instructing its employees on their obligation to report diversion committed by another employee, Resp. Ex. 18, and the issuance of a written policy which announced that the company was “limiting the quantity of [Select Brand Sudafed] tablets to 10 each per order and * * * Actifed to 10 each per order.” Resp. Ex. 20. The policy further stated that employees should “[a]lso take notice [of] the attached list of items and regulate the quantity of items ordered from it also.” *Id.* Finally, the policy instructed Respondent's employees to “[p]lease report any suspicious orders to a manager or Dalton McKnight,” *id.* , who the company had appointed as its DEA compliance officer. Tr. 480-81. According to the testimony of Respondent's President, the company voluntarily reduced the quantity of products that could be purchased per transaction because he did not “want to see [the young generation] messed up in this stuff.” *Id.* at 741. 8 8 The ALJ also found that Respondent had “stopped selling Mini-thins in 1999 or 2000,” another frequently diverted listed chemical product, because the Holloways “knew it was going to things it shouldn't be going [to],” ALJ at 23 (quoting Tr. 734), more specifically, the illicit manufacture of methamphetamine. Tr. 734. When asked by his counsel how he learned to this, Mr. Holloway testified: “you go to the coffee shop, you can learn about everything. It don't mean it always true, but basically, just through hearsay.” *Id.* The ALJ further found that Respondent had reduced the number of listed chemical products it carried from thirty to eighteen and had started a daily inventory of the products. ALJ at 23 (citing Tr. 871-72). Respondent constructed a special cage in which its listed chemical products would be stored under lock; it also limited access to the cage to only three or four supervisory employees. Tr. 881-82. Respondent also adopted the suggestion of the DI that a supervisor fill the listed chemical product orders and created a separate “pick ticket,” a document which is used to fill orders and place them on the appropriate truck. *Id.* at 882. Finally, Respondent also issued a memorandum instructing its employees on the proper documenting of all transactions. *See* Resp. Ex. 21. As found above, the customer verifications indicated that Respondent's customers were also purchasing listed chemical products from other distributors. During his testimony, the Government asked Mr. Holloway whether he aware that J.B.'s Store was purchasing listed chemicals from another distributor. Tr. 774. Mr. Holloway answered that “none of us would have know[n] that.” *Id.* at 774-75. Mr. Holloway then added: “[o]ur salesmen [are] trained to be aware of that. They, you know, you don't get nosy in people's business.” *Id.* at 775. The Government then asked Mr. Holloway whether he had “ever asked any of [his] customer accounts whether they were purchasing listed chemical products from other suppliers?” *Id.* Mr. Holloway answered: “[I]n the wholesale world, that's kind of a no-no. If you want [to be] throw[n] out the door * * * if you want your competitor to take [the business], well get too nosy and that's what happens.” *Id.* When pressed by the Government as to whether his answer was “no,” Mr. Holloway explained: “If the salesman don't want that account, he can go ask personal questions like that and he can lose them.” *Id.* at 776. Mr. Holloway then added: “[t]he answer is I taught them, [d]on't lose customers.” *Id.* Discussion Section 304(a) of the Controlled Substances Act provides that a registration to distribute a list I chemical “may be suspended or revoked * * * upon a finding that the registrant * * * has committed such acts as would render his registration under section 823 of this title inconsistent with the public interest as determined under such section.” 21 U.S.C. 824(a)(4). In making this determination, Congress directed that I consider the following factors:

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

(2)compliance by the applicant with applicable Federal, State, and local law;

(3)any prior conviction record of the applicant under Federal or State laws relating to controlled substances or to chemicals controlled under Federal or State law;

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

(5)such other factors as are relevant to and consistent with the public health and safety. *Id.* § 823(h). “These factors are considered in the disjunctive.” *Joy's Ideas,* 70 FR 33195, 33197 (2005). I may rely on any one or a combination of factors, and may give each factor the weight I deem appropriate in determining whether a registration should be revoked or an application for a modification of a registration should be denied. *See, e.g., David M. Starr,* 71 FR 39367, 39368 (2006); *Energy Outlet,* 64 FR 14269 (1999). Moreover, I am “not required to make findings as to all of the factors.” *Hoxie* v. *DEA* , 419 F.3d 477, 482 (6th Cir. 2005); *Morall* v. *DEA* , 412 F.3d 165, 173-74 (D.C. Cir. 2005). Based on factors one, two, four and five, I conclude that the Government has proved that Respondent's continued registration would be “inconsistent with the public interest.” 21 U.S.C. 823(h). Moreover, having considered the evidence regarding the corrective actions taken by Respondent, I conclude that while some of these measures do adequately address the Agency's concerns, in other respects, they are insufficient to protect the public from the continued diversion of listed chemicals into the illicit manufacture of methamphetamine. Finally, I find wholly unpersuasive—and contrary to the public interest—the ALJ's suggestion that until the diversion of gel caps and liquid pseudoephedrine products is substantiated, I not rely on this “possibility” to revoke Respondent's registration. Accordingly, Respondent's registration will be revoked and its pending application will be denied. Factor One—Maintenance of Effective Controls Against Diversion As the ALJ noted, DEA precedents establish that this factor encompasses a variety of considerations. ALJ at 31. These include the adequacy of security, the adequacy of record keeping and reporting, the conduct of the registrant and its employees, and the occurrence of diversion. *See Rick's Picks* , 72 FR 18275, 18278 (2007), *John J. Fotinopoulos* , 72 FR 24602, 24605 (2007), *D & S Sales* , 71 FR 37607, 37610 (2006); *Joy's Ideas* , 70 FR 33195, 33197-98 (2005). As the ALJ found, Respondent constructed a special cage for storing listed chemical products and limited the number of persons with access to it. ALJ at 31. Moreover, the Government did not dispute whether other aspects of Respondent's physical arrangements were adequate. I thus conclude that Respondent provides adequate physical security for its products. Respondent's recordkeeping is another matter. As the record establishes, the accountability audits showed that there were discrepancies with respect to each of the five audited products. Furthermore, even after the audit took into account Respondent's manual adjustments—which were not supported by appropriate documentation—there were still shortages. 9 While some of the shortages involved small amounts as an absolute matter, they were significant on a percentage basis. 9 As found above, one of the manual adjustments was for 105 boxes of Select Brand antihistamine. I do not find Respondent's justification for the discrepancy to be persuasive. For example, if employees were mistakenly pulling this product from the shelf rather than the adjoinign product (Select Brand sudafed), given that both products were audited, one would think that there would be a substantial and corresponding overage in the audit of the actifed. The audit report indicates that there was ony a thirteen box overage on the initial count of the actifed and that after applying Respondent's adjustments, there was a shortage. *See* Gov. Ex. 22, at 1-2 Under DEA regulations, a registrant must have adequate “systems for monitoring the receipt, distribution, and disposition of List I chemicals in its operations.” 21 CFR 1309.71(b)(8). Respondent's lack of documentation for its inventory adjustments supports a finding that its recordkeeping and accountability controls were inadequate. Respondent did, however, implement several changes to its monitoring and record keeping practices. Were there no other evidence of Respondent's inadequate controls, Respondent's corrective actions might well support its being allowed to maintain its registration. There is, however, such evidence. Jonathan Robbin, the Government's expert witness testified that Respondent's customers are non-traditional retailers of pseudoephedrine products and that the normal expected sales range of these products at Respondent's customers is “between $ 0 and $ 40 per month[,] with an average of $ 19.85 for pseudoephedrine

(HCL)and between $ 0 and $ 20 per month, with an average of $ 8.68” for its actifed product. Mr. Robbin further testified that “[a] monthly retail sale of $ 60 of pseudoephedrine

(HCL)would be expected to occur less than one in 1,000 times in random sampling,” and “[a] monthly retail sale of $ 100 a month of pseudoephedrine

(HCL)or of $ 50 of Actifed tablets would be expected to occur about one in a million times in random sampling.” Gov. Ex. 8, at 8. Moreover, the Government entered into evidence a rebuttal exhibit prepared by Mr. Robbin which showed that even using Respondent's suggested retail price for Select Brand Sudafed and Actifed, 10 Respondent's customers were still selling these products in extraordinary quantities. More specifically, three stores were selling its sudafed product at ten times expectation; another eight stores were selling the product at five to seven times expectation. As for its actifed product, one store was selling it at over fifty times expectation, seven stores were selling it at twenty-five to fifty times expectation, eleven stores were selling it at ten to twenty-five times expectation, and another eleven stores were selling it at five to ten times expectation. 10 As explained above, Respondent did not produce any evidence that its customers actually sold the products at the suggested retail prices. Indeed, Mr. Holloway testified that under Missouri law, Respondent could not tell its customers what price to sell the products for. TR 783. Respondent attempts to discredit Mr. Robbin's findings by arguing that one of the towns in Respondent's market (Doniphan) is forty miles from a store in the traditional market. This testimony only calls into question Mr. Robbin's findings with respect to the stores in Doniphan. It does not impeach his findings with respect to the other stores or his ultimate finding that Respondent “frequently has sold products containing pseudoephedrine * * * in extraordinary excess of normal or traditional demand.” Gov. Ex. 8, at 17-18. Because of the statistical improbability that these sales were to meet legitimate demand, I conclude that a preponderance of the evidence establishes that a substantial portion of Respondent's products have been diverted. *See T. Young* , 71 FR at 60572; see also *D & S Sales* , 71 FR at 37611 (finding diversion occurred “[g]iven the near impossibility that * * * sales were the result of legitimate demand”); *Joy's Ideas* , 70 FR at 33198 (finding diversion occurred in the absence of “a plausible explanation in the record for this deviation from the expected norm”). The ALJ acknowledged that the Government had proved that Respondent had engaged in “ ‘grossly excessive sales’ of listed chemical products,” and that “[i]n the past, this pattern of sales has supported a finding” of diversion and that Respondent's continued registration “would be adverse to the public interest.” ALJ at 40-41. The ALJ noted, however, that “Respondent ha[d] demonstrated its willingness and its ability to * * * implement changes in its business processes.” *Id* . In this regard, the ALJ had earlier noted that Respondent had “voluntarily lowered the maximum number of listed chemical products to be sold per transaction.” *Id* . at 32. Respondent's action does not impress me. As the record indicates, Respondent lowered the number of boxes per order from twelve to ten. Tr. 645-46, 653 (testimony of Marvin Wheeler). Moreover, Respondent did not limit the number of times a customer could order in a month; indeed, the record indicates that its customers were allowed to purchase the products twice a week. *Id* . at 654 (testimony of Marvin Wheeler); *see also* *id* . at 484 (testimony of DI). Even using Respondent's suggested retail price for these products, Respondent's policy would allow a customer to obtain a quantity of products which would sell for approximately $225 per month (actifed) and $146 per month for its sudafed product, amounts which are far in excess of the normal expected retail sales by a non-traditional retailer to meet legitimate demand. In short, Respondent's sales limit is not a consequential reform of its business practices and would not prevent diversion. 11 I therefore hold that Respondent does not maintain effective controls against diversion. 11 It is acknowledged that this discussion involves products in tablet form that Respondent can no longer distribute under Missouri law. However, once the Government proved that Respondent's products have been diverted, the burden of proof shifted to Respondent to show that its controls were adequate. *See Gregory D. Owens,* 67 FR 50461, 50464 (2002); *Thomas Johnston* , 45 FR 72311 (1980). Furthermore, this hearing took place eight months after Missouri changed its law. Respondent's memorandum instituting the sales limit vaguely instructed its employees to “take notice to the attached list of items and regulate the quantity of items ordered from it also.” Resp. Ex. 20, at 1. It is thus far from clear what limits Respondent has imposed on its sales of gelcap and liquid products. It was, however, Respondent's burden to show that its controls were adequate and that the sales limits it imposed would prevent diversion of its gel cap and liquid products. This it failed to do. Respondent's controls against diversion are inadequate for an additional reason, which the ALJ completely ignored. The record establishes that several of Respondent's customers were receiving listed chemical products from other sources. Yet notwithstanding the potential for diversion of listed chemical products, *see* Tr. 734, Respondent's President and co-owner testified that he had never inquired of his customers as to whether they were purchasing listed chemical products from other distributors. *Id* . at 775-76. Moreover, Mr. Holloway expressed the view that it was inappropriate for his salesmen to ask the firm's customers whether they were purchasing products from other distributors. According to Mr. Holloway, “[i]f you want [to be] throw[n] out the door * * * if you want your competitor to take [the business], well get too nosy and that's what happens.” *Id* . at 776. Mr. Holloway further explained that “[i]f the salesman don't want that account, he can go ask personal questions like that and he can lose them.” *Id* . Mr. Holloway then stated that he had “taught” his sales force, “[d]on't lose customers.” *Id* . Respondent's policy—which is fairly characterized as “see no evil, hear no evil”—is fundamentally inconsistent with the obligations of a DEA registrant. *See, e.g., D & S Sales* , 71 FR at 37610. As noted in numerous DEA orders, selling amounts below the 1,000 gram threshold that triggers reporting requirements, *see* 21 CFR 1310.04(f), does not create a safe harbor which allows a registrant to distribute listed chemical products in disregard for the ultimate disposition of those products. *See Rick's Picks, L.L.C.* , 72 FR 18275, 18278 (2007); *D & S Sales* , 71 FR 37607, 37609, 37611-12 (2006); *see also* *United States* v. *Kim* , 449 F.3d 933, 939 (2006). Rather, a registrant has an affirmative duty to protect against diversion by knowing its customers and the nature of their list I chemical sales. Under Federal law, a registrant cannot sell listed chemical products to a customer when it has “reasonable cause to believe” the products will be diverted. 21 U.S.C. 841(c)(2). A registrant cannot avoid the requirements of Federal law by instructing its sales force to ask no questions of its customers and thereby be deliberately ignorant of diversion. I therefore conclude that notwithstanding the corrective measures it has implemented, Respondent still does not maintain effective controls against diversion. Furthermore, this factor, by itself, establishes that Respondent's continued registration is inconsistent with the public interest and provides reason alone to revoke Respondent's registration. Factor Two and Four—Respondent's Compliance with Applicable Laws and its Past Experience in the Distribution of Listed Chemicals Under this factor, the ALJ discussed Respondent's failure to report to DEA its transactions with Mr. Frankum notwithstanding their suspicious nature. *See* ALJ at 34. The ALJ did not, however, make any finding as to whether Respondent had in fact violated federal law because it reported the transactions to local authorities rather than DEA. *See id* . The Government offers no argument as to why Respondent's failure to report these transactions to DEA violated federal law. *See* Gov. Proposed Findings and Conclusions of Law at 44. In any event, the real issue is not Respondent's failure to report the transactions but its repeated sales to Mr. Frankum given the information it had obtained. It is a violation of federal law for “[a]ny person [to] knowing or intentionally * * * distribute[] a listed chemical * * * having reasonable cause to believe, that the listed chemical will be used to manufacture a controlled substance except as authorized by” the CSA. 21 U.S.C. 841(c)(2). Moreover, “[t]here is no quantity threshold exempting a merchant from criminal liability under § 841(c)(2).” *Kim,* 449 F.3d at 941. The record clearly establishes that Respondent's employees with requisite authority had knowledge of facts which created “reasonable cause to believe” that the pseudoephedrine products it sold to Frankum would be used to manufacture methamphetamine. *United States* v. *Kaur* , 382 F.3d 1155, 1158 (9th Cir. 2004) (defining standard as whether defendant actually “knew, or knew facts that would have made a reasonable person aware, that the pseudoephedrine would be used to make methamphetamine”). As found above, when Frankum first contacted Respondent, he specifically asked Ms. Brotherton whether the firm sold Actifed and Sudafed. Moreover, when Frankum visited Respondent, the sales tax certificate which he presented gave a storage unit as his business's address and when interviewed, Frankum was vague about the nature of his business. Furthermore, Frankum did not complete a credit application, but rather paid cash for his purchases. *See* U.S. Dept. of Justice, *Report to the U.S. Attorney General by the Suspicious Order Task Force,* Appendix A (1999). The record further establishes that within two weeks of Frankum's first visit, Officer Clark informed Ms. Brotherton that Frankum's brother was a “meth cook.” Tr. 459, 505. Moreover, Respondent's employees referred to Frankum as “the drug guy.” *Id.* at 460. Finally, Ms. Brotherton testified that even during Frankum's third visit, “there was never any reference to opening up a business.” *Id.* at 548. I thus conclude that Respondent knowingly distributed listed chemical products to Frankum having reasonable cause to believe that the products would be used to manufacture methamphetamine. While the information Ms. Brotherton initially obtained may not have risen to the level of “reasonable cause,” having been told by law enforcement authorities that Frankum's brother was “a meth cook,” and Frankum's continued vagueness about the nature of his business, did establish reasonable cause. 12 Furthermore, Respondent does not contend that the acts of Ms. Brotherton or the other employees involved in the transactions were unauthorized or were not undertaken for the corporation's benefit. *See, e.g., United States* v. *Basic Construction Co.,* 711 F.2d 570, 573 (4th Cir. 1983); *United States* v. *Cincotta* , 689 F.2d 238, 241-42 (1st Cir. 1982); *see also United States* v. *Bank of New England* , 821 F.2d 844, 856 (1st Cir. 1987) (“[T]he knowledge obtained by corporate employees acting within the scope of their employment is imputed to the corporation.”). Accordingly, the violations involving the Frankum sales are properly charged to Respondent. 12 To establish a violation of this provision, the Government is not required to prove that the products were actually used to manufacture methamphetamine. *See United States* v. *Johal,* 428 F.3d 823, 828 (9th Cir. 2005); *United States* v. *Prather* , 205 F.3d 1265, 1269-70 (11th Cir. 2000). I acknowledge that Ms. Brotherton reported the Frankum sales to local authorities and that Frankum was eventually arrested and pled guilty to the state law offense of possession of a methamphetamine precursor with intent to manufacture. But Respondent should never have sold listed chemicals to Frankum in the first place. I thus find that Respondent violated federal law at least three times when it sold pseudoephedrine products to Frankum. While I acknowledge that Respondent appears to have implemented a training program that addresses the Frankum incidents, I nonetheless conclude that Respondent's record of compliance with applicable laws and its experience in distributing listed chemicals support a finding that its continued registration is inconsistent with the public interest. 13 13 I acknowledge that Respondent has not been convicted of a criminal offense. The actual conduct of Respondent, however, outweighs the fact that it has not been charged and convicted of a criminal offense. Factor Five—Other Factors Relevant to and Consistent with the Public Health and Safety The illicit manufacture and abuse of methamphetamine have had pernicious effects on families and communities throughout the nation. This is especially so in Missouri which, notwithstanding the State's enactment of a law restricting the sale of certain pseudoephedrine products, still has an extraordinarily serious problem with illicit methamphetamine production and its abuse. *See* Gov. Ex. 28. As the record demonstrates, while the Missouri law has led to a substantial reduction in the number of meth. lab seizures, law enforcement authorities still seized 745 illegal labs in the latter half of 2005. The illicit production of methamphetamine thus remains a grave threat to public health and safety in Missouri. Cutting off the supply source of methamphetamine traffickers is of critical importance in protecting the citizens of Missouri and adjoining States from the devastation wreaked by this drug. While listed chemical products containing pseudoephedrine have legitimate medical uses, both DEA orders and the record here establish that convenience stores and gas-stations constitute the non-traditional retail market for legitimate consumers of products containing these chemicals. *See, e.g., Tri-County Bait Distributors,* 71 FR 52160, 52161-62 (2006); *D & S Sales,* 71 FR at 37609; *Branex, Inc.,* 69 FR 8682, 8690-92 (2004). DEA has further found that there is a substantial risk of diversion of list I chemicals into the illicit manufacture of methamphetamine when these products are sold by non-traditional retailers. *See, e.g., Joy's Ideas,* 70 FR at 33199 (finding that the risk of diversion was “real” and “substantial”); *Jay Enterprises, Inc.,* 70 FR 24620, 24621

(2005)(noting “heightened risk of diversion” if application to distribute to non-traditional retailers was granted). Accordingly, “[w]hile there are no specific prohibitions under the Controlled Substances Act regarding the sale of listed chemical products to [gas stations and convenience stores], DEA has nevertheless found that [these entities] constitute sources for the diversion of listed chemical products.” *Joey Enterprises, Inc.,* 70 FR 76866, 76867 (2005). *See also TNT Distributors,* 70 FR 12729, 12730

(2005)(special agent testified that “80 to 90 percent of ephedrine and pseudoephedrine being used [in Tennessee] to manufacture methamphetamine was being obtained from convenience stores”). 14 Here, the record establishes that several of the stores that Respondent supplied had previously been found to be purchasing extraordinary quantities of listed chemicals. *See* Tr. 414-15, 424-25 (discussing purchases of Bart's and JB's). 14 *See OTC Distribution Co.,* 68 FR 70538, 70541

(2003)(finding that “pseudoephedrine products distributed by [gray market distributor] have been uncovered at numerous clandestine methamphetamine settings throughout the United States and/or discovered in the possession of individuals apparently involved in the illicit manufacture of methamphetamine”). Moreover, as found above under factor one, the evidence supports a finding that Respondent supplied numerous non-traditional retailers with listed chemical products and that it sold extraordinary quantities of these products to a substantial number of these establishments. The evidence thus also establishes that a substantial portion of Respondent's products have been diverted. 15 15 While the ALJ concluded “that diversion is the only conceivable explanation” for Respondent's excessive sales, she further reasoned that Respondent may have been less likely to detect these sales because of its large customer base. ALJ at 38-39. Respondent itself did not make this argument and thus it need not be considered. In any event, DEA case law establishes that a registration can be revoked even when a registrant was “an unknowing and unintentional contributor to [the] methamphetamine problem.” *Joy's Ideas,* 70 FR at 33198. *See also T. Young,* 71 FR at 60572. The ALJ also noted that Respondent's List I chemical sales are a “minute percentage of [its] total business,” and stand in “contrast to other revocation cases, where * * * List I chemicals products have represented a significant portion of business.” ALJ at 39 (citations omitted). Be that as it may, even where List I products are a “minute percentage” of a registrant's total business, a substantial amount of products can still be diverted, especially where, as here, a registrant lacks effective controls to prevent diversion. *See* discussion of factor one. Finally, while the ALJ acknowledged that some methamphetamine traffickers “have already begun to circumvent the new [Missouri] law” by using liquid and gelcap forms of pseudoephedrine, ALJ at 39, the ALJ concluded that the law “drastically reduce[s] the potential for diversion and harm to public safety.” *Id.* at 40. The ALJ further explained that “the State will be monitoring the gelcap and liquid pseudoephedrine products, if any, found in the methamphetamine labs. Such heightened scrutiny leads to the conclusion that, if the products of the Respondent, as well as other distributors of List I chemical products in Missouri, are found in illicit methamphetamine laboratories, the State will close the legislative loophole afforded these limited products.” *Id.* at 41. The ALJ then reasoned that “[u]ntil such time as the problem is substantiated * * * I recommend that the possibility of the Respondent's products being diverted not be relied upon to revoke * * * Respondent's Certificate of Registration.” *Id.* In *T. Young Associates,* an Order published before the issuance of the recommended decision in this matter, I rejected a similar argument. *See* 71 FR at 60573. There, I noted several studies (including those by the Washington State Patrol and McNeil Consumer and Specialty Pharmaceuticals) which show “that methamphetamine can be produced from List I chemicals sold as liquid-filled gelcaps and liquids.” *Id.* (citing DEA, *Microgram Bulletin* 96-97, 102 (June 2005)). Here, the record likewise establishes that pseudoephedrine “can be easily extracted” from gelcaps and liquid products using “readily available” reagents and solvents. Gov. Ex. 4, at 8. Contrary to the ALJ's understanding, the diversion of gelcap and liquid forms of pseudoephedrine into the illicit manufacture of methamphetamine has already been “substantiated.” *See* Gov. Ex. 7, Tr. 87-88, 91 Moreover, as I noted in *T. Young* , “experience has taught DEA that in the aftermath of every major piece of legislation addressing the illicit manufacture of methamphetamine, traffickers have quickly found ways to circumvent the restrictions.” 71 FR at 60573; *see also* Tr. 63-64. This Agency is not required to wait until the diversion of gelcap and liquid forms of pseudoephedrine reaches epidemic proportions before acting to protect the public interest. Therefore, I reject the ALJ's finding that factor five supports the continuation of Respondent's registration. 16 16 In her analysis of factor five, the ALJ concluded that the Government had not proved that “Respondent's continued distribution of liquid and gelcap forms of List I chemical products poses a threat to the public health and safety.” ALJ at 40. The ALJ erred, however, because she applied the wrong legal standard. As I have previously explained, the Government is not required to prove that Respondent's conduct poses a threat to public health and safety to obtain an adverse finding under factor five. *See T. Young,* 71 FR at 60572 n.13. Rather, the statutory text directs the consideration of “such other factors as are relevant to and consistent with the public health and safety.” 21 U.S.C. § 823(h)(5). This standard thus grants the Attorney General broader discretion than that which applies in the case of other registrants such as practitioners. *See id.* § 823(f)(5) (directing consideration of “[s]uch other conduct which may threaten the public health and safety”). Accordingly, while proof of a threat to public health and safety clearly satisfies the standard of subsection 823(h)(5), it is not required. Distributing a product, which studies show can be easily used to make methamphetamine, clearly satisfies this standard even in the absence of evidence showing widespread diversion of the products. In conclusion, the record establishes that Respondent's products have been diverted. While Respondent has taken corrective actions, these measures are still not adequate to protect against the diversion of its products. Furthermore, Respondent violated federal law by knowingly distributing listed chemical products when it had reasonable cause to believe that the products would be used to manufacture methamphetamine. Finally, studies show that pseudoephedrine can be easily extracted from gelcap and liquid forms of pseudoephedrine and anecdotal evidence establishes that methamphetamine traffickers are already using these products. Factor five does not require that DEA wait until the diversion of these products becomes widespread before acting to protect the public interest. Therefore, I conclude that Respondent's continued registration is “inconsistent with the public interest.” 21 U.S.C. 823(h). Order Accordingly, pursuant to the authority vested in me by 21 U.S.C. 823(h) & 824(a), as well as 28 CFR 0.100(b) 7 0.104, I order that DEA Certificate of Registration, 003219HIY, issued to Holloway Distributing, Inc., be, and it hereby is, revoked. I further order that the pending application of Holloway Distributing, Inc., for renewal of its registration, be, and it hereby is, denied. This order is effective August 31, 2007. Dated: July 20, 2007. Michele M. Leonhart, Deputy Administrator. [FR Doc. E7-14822 Filed 7-31-07; 8:45 am] BILLING CODE 4410-09-P DEPARTMENT OF JUSTICE Drug Enforcement Administration [Docket No. 07-23] Newcare Home Health Services; Revocation of Registration On February 21, 2007, the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration, issued an Order to Show Cause to Newcare Home Health Services (Respondent), of Baltimore, Maryland. The Show Cause Order proposed the revocation of Respondent's DEA Certificate of Registration, BN3795892, as a retail pharmacy, on the ground that the Maryland State Board of Pharmacy had suspended Respondent's state pharmacy license. 1 *See id.* 1 The Show Cause Order also alleged that Respondent had committed acts which rendered its registration “inconsistent with the public interest.” Show Cause Order at 1 (citing 21 U.S.C. 823(f) & 824(a)(4)). More specifically, the Show Cause Order alleged that Respondent “illegally distributed vast quantities of hydrocodone and other controlled substances” by filling prescriptions that were issued over the internet and which were issued by physicians who did not establish “a doctor-patient relationship with the customers.” Id. In light of the disposition of this case, a more detailed recitation of the allegations of the Show Cause Order is not necessary. On or about February 23, 2007, the Show Cause Order was served on Respondent. On March 9, 2007, Respondent, through its counsel, requested a hearing. The matter was assigned to Administrative Law Judge

(ALJ)Gail Randall, who, on March 15, 2007, ordered the parties to file pre-hearing statements. On March 19, 2007, the Government moved for summary disposition and to stay the filing of pre-hearing statements. The basis for the Government's motion was that on January 5, 2007, the Maryland Board of Pharmacy had summarily suspended Respondent's state pharmacy and distributor permits. Mot. for Summ. Disp. at 2. In support of its motion, the Government attached a copy of the Maryland Board's Order for Summary Suspension. Upon receipt of the motion, the ALJ granted the Government's motion to stay the proceeding and ordered Respondent to reply to the motion for summary disposition. See Order Staying Proceedings at 1-2. On March 29, 2007, Respondent submitted its reply. Respondent acknowledged that summary disposition would be appropriate but asked the ALJ “to stay all proceedings * * * while the criminal prosecution of [its] owners proceeds through the U.S. District Court.” Resp.'s Reply at 1. Respondent further argued that “[i]f the outcome of the criminal case is favorable to [its] owners, then the posture and merits of this matter * * * will be substantially different than if one or more convictions are obtained.” *Id.* at 2. Respondent further stated that it had appealed the State Board's suspension of its pharmacy license and had “asked the Board to defer any hearing on the appeal until the criminal case concludes.” *Id.* Respondent further stated that it would agree to the suspension of its registration in the interim. *Id.* On April 3, 2007, the ALJ issued her recommended decision. Noting that state authority is “a prerequisite to DEA registration,” the ALJ held that Respondent was not entitled to maintain its registration because there was no dispute that Respondent currently lacks “authority to handle controlled substances in the jurisdiction where it seeks to maintain its DEA registration.” ALJ at 4. The ALJ also denied Respondent's request for a stay. The ALJ thus granted the Government's motion for summary disposition, lifted her stay order, and denied Respondent's request for a continued stay of the proceeding. The ALJ also recommended that Respondent's registration be revoked and forwarded the record to me for final agency action. Having considered the record as a whole, I adopt the ALJ's decision and recommended order in its entirety. As the ALJ found, Respondent does not currently possess authority under the laws of Maryland to handle controlled substances. Under the Controlled Substances Act (CSA), “a practitioner must be currently authorized to handle controlled substances in ‘the jurisdiction in which [it] practices' in order to maintain its DEA registration.” *Bourne Pharmacy, Inc.* , 72 FR 18273, 18274

(2007)(quoting 21 U.S.C. 802(21)). *See also* 21 U.S.C. 802(21) (“[t]he term ‘practitioner' means a * * * pharmacy * * * licensed, registered, or otherwise permitted, by * * * the jurisdiction in which [it] practices * * * to * * * dispense * * * a controlled substance in the course of professional practice”). *See also id.* 823(f) (“The Attorney General shall register practitioners * * * if the applicant is authorized to dispense * * * controlled substances under the laws of the State in which [it] practices.”). State authority is thus an essential prerequisite to maintaining a DEA registration. 2 Moreover, this Agency has repeatedly revoked the DEA registrations of those registrants who no longer hold state authority to handle controlled substances, regardless of whether that authority has been revoked or suspended pending further proceedings. *See Bourne Pharmacy* , 72 FR at 18274; *The Medicine Shoppe* , 71 FR 42878, 42879 (2006); Rx *Network of South Florida, LLC* , 69 FR 62093 (2004); *Wingfield Drugs, Inc.* , 52 FR 27070 (1987). Because Respondent is not currently authorized to handle controlled substances in the State in which it engages in the practice of pharmacy, it is not entitled to maintain its DEA registration. 3 Therefore, its registration will be revoked and any pending applications for renewal or modification of its registration will be denied. 2 The ALJ properly rejected Respondent's request for a stay. It is not DEA's policy to stay proceedings under section 304 while registrants litigate in other forums. *See Bourne Pharmacy, Inc.* , 72 FR 18273 (2007); *Oakland Medical Pharmacy* , 71 FR 50100 (2006); *Kennard Kobrin, M.D.* , 70 FR 33199 (2005). As the ALJ explained, Respondent can always apply for a new registration if it prevails in the pending state administrative proceeding. 3 Based on this Agency's records, I find that Respondent is the holder of DEA Certificate of Registration, BN3795892, which does not expire until October 31, 2008. Order Pursuant to the authority vested in me by 21 U.S.C. 823(f) & 824(a), as well as 28 CFR 0.100(b) and 0.104, I hereby order that DEA Certificate of Registration, BN3795892, issued to Newcare Home Health Services, be and it hereby is, revoked. I further order that any pending applications for renewal or modification of such registration be, and they hereby are, denied. This order is effective August 31, 2007. Dated: July 20, 2007. Michele M. Leonhart, Deputy Administrator. [FR Doc. E7-14819 Filed 7-31-07; 8:45 am] BILLING CODE 4410-09-P DEPARTMENT OF JUSTICE Drug Enforcement Administration Alan H. Olefsky, M.D.; Denial of Application On May 25, 2005, the Deputy Assistant Administrator, Office of Diversion Control, Drug Enforcement Administration, issued an Order to Show Cause to Alan H. Olefsky, M.D. (Respondent), of Chicago, Illinois. The Show Cause Order proposed to revoke Respondent's DEA Certificate of Registration, BO3661104, as a practitioner, and to deny any pending applications for renewal or modification of his registration, on the ground that the Illinois Department of Financial and Professional Regulation had suspended his state medical license and state controlled substance license. Show Cause Order at 1. The Show Cause Order thus alleged that Respondent was not authorized to handle controlled substances in the State where he was registered and was thus not entitled to maintain his registration. *Id.* (citing 21 U.S.C. 824(a)(3)). The Show Cause Order also alleged that Respondent had committed acts which rendered his registration inconsistent with the public interest. *Id.* (citing 21 U.S.C. 824(a)(4)). More specifically, the Show Cause Order alleged that from December 2002 through October 2004, Respondent had “issued false prescriptions for controlled substances in the names of” three individuals, and that the prescriptions were for his “personal use.” *Id.* The Show Cause Order also notified Respondent of his right to request a hearing on the allegations. On June 8, 2005, the Show Cause Order was served on Respondent by certified mail as evidenced by the signed return receipt card. Neither Respondent, nor anyone purporting to represent him, requested a hearing on the allegations within the time period set forth in 21 CFR 1301.43(a) and the Show Cause Order. The matter was held in abeyance after the State restored Respondent's medical license. On March 30, 2007, the State again suspended Respondent's medical license. Accordingly, on May 10, 2007, the investigative file was forwarded to my Office for final agency action. As an initial matter, I find that because Respondent did not request a hearing within thirty days of receipt of the Show Cause order he has waived his right to hearing. *See* 21 CFR 1301.43(d). I therefore enter this Final Order without a hearing based on relevant material in the investigative file and make the following findings. Findings Respondent was the holder of DEA Certificate of Registration, BO3661104, which authorized him to handle schedule II through V controlled substances as a practitioner. Respondent's registration expired on December 31, 2004. According to the investigative file, Respondent did not submit a renewal application until February 24, 2005, nearly two months after his registration expired. Accordingly, I find that Respondent's renewal application was not timely submitted and his registration expired on December 31, 2004. *See* 5 U.S.C. 558(c) (requiring submission of a “timely and sufficient application for a renewal” in order for a registration to be continued until the Agency makes a “final determin[ation]” on the application). I further find, however, that Respondent does have an application pending before the agency. According to the investigative file, on February 18, 2005, the Illinois Department of Financial and Professional Regulation summarily suspended Respondent's state medical license and controlled substance registrations. In support of the suspension, the State alleged, *inter alia* , that “Respondent issued false prescriptions for controlled substances under other names for personal use.” Pet. For Temp. Susp. 1. The petition was supported by the sworn affidavit of Larry G. McClain, M.D., the Chief Medical Coordinator of the Illinois Department of Financial and Professional Regulation. In his affidavit, Dr. McClain averred that “the Department has learned that Respondent has repeatedly issued false prescriptions for Xanax, Dilaudid and Viagra. He calls in these prescriptions in the names of [M.G., V.G. and T.C.] He obtains these prescriptions for personal use and pays cash to remain untraceable.” Dr. McClain further averred that “Respondent was arrested for a DUI in June of 2004 and * * * has an extensive criminal history.” In September 2006, Respondent and the State entered into a consent order under which his medical license was restored based on his having entered a treatment program and an Aftercare Agreement. Consent Order at 2. In the order, “Respondent admit[ted] the allegations raised by the Department.” *Id.* The consent order, which became effective on November 21, 2006, placed Respondent on “Indefinite Probation,” and also imposed various conditions including that he comply with the terms of an Aftercare Agreement and abstain from the use of alcohol and “mood altering and/or psychoactive drugs” except as “prescribed by a primary care and/or treating physician.” *Id.* at 3. Thereafter, on March 30, 2007, the State again imposed a summary suspension of Respondent's medical license, which remains in effect. *See* Notice of Temporary Suspension. In the Complaint, the State alleged that in January 2007, Respondent had been hospitalized with “a blood alcohol level of 327.” Complaint at 2. The State also alleged that in February 2007, Respondent had been admitted to Rush Behavioral Care to be treated for “alcohol dependence.” *Id.* The State further alleged that in February 2007, Respondent had applied for a new state Controlled Substance Registration. *Id.* Finally, the Complaint alleged that Respondent had failed to comply with the conditions of Consent Order. 1 1 I also take official notice of the fact that on January 9, 1992, the Administrator of this Agency ordered the revocation of Respondent's registration based on his having presented fraudulent prescriptions for Percocet and Halcion to a pharmacy. *See Alan H. Olefsky* , 57 FR 928, 929 (1992). There is no evidence in the file that the State has granted Respondent a new Controlled Substance Registration. Moreover, the State's summary suspension further ordered Respondent to “immediately surrender all indicia of licensure to the Department.” March 30, 2007 Summary Suspension Order at 1-2. I therefore find that Respondent does not hold a current Illinois Controlled Substance Registration. Discussion Section 303(f) of the Controlled Substances Act provides that “[t]he Attorney General shall register practitioners * * * to dispense * * * controlled substances in schedule II, III, IV, or V, if the applicant is authorized to dispense * * * controlled substances under the laws of the State in which he practices.” 21 U.S.C. 823(f). Section 303(f) further provides that “[t]he Attorney General may deny an application for such registration if he determines that the issuance of such registration would be inconsistent with the public interest.” *Id.* In making the public interest determination, the Act requires the consideration of the following factors:

(1)The recommendation of the appropriate State licensing board or professional disciplinary authority.

(2)The applicant's experience in dispensing * * * controlled substances.

(3)The applicant's conviction record under Federal or State laws relating to the manufacture, distribution, or dispensing of controlled substances.

(4)Compliance with applicable State, Federal, or local laws relating to controlled substances.

(5)Such other conduct which may threaten the public health and safety. *Id.* “[T]hese factors are * * * considered in the disjunctive.” *Robert A. Leslie, M.D.,* 68 FR 15227, 15230 (2003). I “may rely on any one or a combination of factors, and may give each factor the weight [I] deem[ ] appropriate in determining whether a registration should be revoked.” *Id.* Moreover, I am “not required to make findings as to all of the factors.” *Hoxie* v. *DEA* , 419 F.3d 477, 482 (6th Cir. 2005); *see also Morall* v. *DEA* , 412 F.3d 165, 173-74 (D.C. Cir. 2005). In this case, I conclude that there are two independent grounds for denying Respondent's application. First, Respondent is not currently authorized under Illinois law to handle controlled substances and thus does not meet an essential requirement for a registration under the CSA. Second, Respondent's experience in dispensing controlled substances and his record of compliance with applicable laws make clear that granting him a registration would be inconsistent with the public interest. Respondent's Lack of State Authority Under the Controlled Substances Act (CSA), a practitioner must be currently authorized to handle controlled substances in “the jurisdiction in which he practices” in order to maintain a DEA registration. *See* 21 U.S.C. 802(21) (“[t]he term ‘practitioner’ means a physician * * * 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”). *See also id.* 823(f) (“The Attorney General shall register practitioners * * * if the applicant is authorized to dispense * * * controlled substances under the laws of the State in which he practices.”). Relatedly, DEA has held repeatedly that the CSA requires the revocation of a registration issued to a practitioner who no longer possesses authority under state law to handle controlled substances. *See Sheran Arden Yeates,* 71 FR 39130, 39131 (2006); *Dominick A. Ricci,* 58 FR 51104, 51105 (1993); *Bobby Watts,* 53 FR 11919, 11920 (1988). *See also* 21 U.S.C. 824(a)(3) (authorizing the revocation of a registration “upon a finding that the registrant * * * has had his State license or registration suspended [or] revoked * * * and is no longer authorized by State law to engage in the * * * distribution [or] dispensing of controlled substances”). Here, the investigative file establishes that Respondent's Illinois controlled substance registrations were suspended pursuant to the State's February 18, 2005 order. Moreover, there is no evidence that the State has issued a new controlled substance registration to him, and in any event, the State's March 30, 2007 order directed him to “immediately surrender all indicia of licensure to the Department.” Therefore, Respondent is without authority to handle controlled substances in Illinois, the State in which he seeks registration. Respondent thus does not meet an essential prerequisite for a new DEA registration and his application will be denied on that basis. See 21 U.S.C. 823(f). The Public Interest Analysis Because the State's summary suspension is not a final order, review of Respondent's application under the public interest factors is also warranted. Here, Dr. McClain's affidavit establishes that Respondent “repeatedly issued false prescriptions” in the names of other persons for Xanax (alprazolam), a schedule IV controlled substance, *see* 21 CFR 1308.14(c), and Dilaudid (hydromorphone), a schedule II controlled substance. *See id.* 1308.12(b)(1). Respondent then filled the prescriptions and personally abused the drugs. Respondent admitted to this conduct in the Consent Order. I thus find that Respondent violated Federal law. *See* 21 U.S.C. 843(a)(3) (rendering it “unlawful for any person knowingly or intentionally * * * to acquire or obtain possession of a controlled substance by misrepresentation, fraud, forgery, deception, or subterfuge”). Moreover, as noted above, this is not the first time that Respondent has engaged in such criminal behavior. *See Olesky,* 57 FR at 928-29. Accordingly, Respondent's experience in dispensing controlled substances and his record of compliance with Federal law amply demonstrate that granting his application for registration would be “inconsistent with the public interest.” 21 U.S.C. 823(f). Therefore, even if the State were to restore his medical license and grant him a new state controlled substance registration, I would still deny his application. Order Pursuant to the authority vested in me by 21 U.S.C. 823(f), as well as 28 CFR 0.100(b) & 0.104, I order that the application of Alan H. Olefksy, M.D., for a DEA Certificate of Registration as a practitioner be, and it hereby is, denied. This order is effective August 31, 2007. Dated: July 20, 2007. Michele M. Leonhart, Deputy Administrator. [FR Doc. E7-14820 Filed 7-31-07; 8:45 am] BILLING CODE 4410-09-P DEPARTMENT OF LABOR Employee Benefits Security Administration [Application No. D-11324] Withdrawal of the Notice of Proposed Exemption Involving Deutsche Bank AG (DB); Located in Germany, With Affiliates in New York, NY and Other Locations In the **Federal Register** dated February 13, 2007, (72 FR 6747), the Department of Labor (the Department) published a notice of pendency (the Notice) of a proposed exemption from the prohibited transaction restrictions of the Employee Retirement Income Security Act of 1974 and from certain taxes imposed by the Internal Revenue Code of 1986. The Notice concerned an application filed on behalf of DB and its affiliates (the Applicants) which would have amended and superseded Prohibited Transaction Exemption 2003-24 (PTE 2003-24) (68 FR 48637, August 14, 2003, as corrected, 68 FR 55993, September 29, 2003) with respect to the Applicants. By e-mail dated June 19, 2007, the Applicants requested that the application for exemption be withdrawn. Accordingly, the Department has determined to withdraw the above-cited Notice. FOR FURTHER INFORMATION CONTACT: Angelena C. Le Blanc of the Department, telephone

(202)693-8540. (This is not a toll-free number.) Signed at Washington, DC, this 27th day of July 2007. Ivan L. Strasfeld, Director of Exemption Determinations, Employee Benefits Security Administration, U.S. Department of Labor. [FR Doc. E7-14880 Filed 7-31-07; 8:45 am] BILLING CODE 4510-29-P DEPARTMENT OF LABOR Employee Benefits Security Administration Prohibited Transaction Exemption 2007-10 Through 2007-13; Grant of Individual Exemptions involving; D-11393 & D-11394, (PTE 2007-10), Paul Niednagel IRAs and Lynne Niednagel IRAs (Collectively, the IRAs); D-11406, (PTE 2007-11), The Revlon Employees Savings, Investment and Profit Sharing Plan (the Plan); L-11365, (PTE 2007-12), American Maritime Officers Safety & Education Plan (the S&E Plan); and L-11382, (PTE 2007-13), Sheet Metal Workers Local Union 17 Insurance Fund (the Fund) AGENCY: Employee Benefits Security Administration, Labor. ACTION: Grant of individual exemptions. SUMMARY: This document contains exemptions issued by the Department of Labor (the Department) from certain of the prohibited transaction restrictions of the Employee Retirement Income Security Act of 1974 (ERISA or the Act) and/or the Internal Revenue Code of 1986 (the Code). A notice was published in the **Federal Register** of the pendency before the Department of a proposal to grant such exemption. The notice set forth a summary of facts and representations contained in the application for exemption and referred interested persons to the application for a complete statement of the facts and representations. The application has been available for public inspection at the Department in Washington, DC. The notice also invited interested persons to submit comments on the requested exemption to the Department. In addition the notice stated that any interested person might submit a written request that a public hearing be held (where appropriate). The applicant has represented that it has complied with the requirements of the notification to interested persons. No requests for a hearing were received by the Department. Public comments were received by the Department as described in the granted exemption. The notice of proposed exemption was issued and the exemption is being granted solely by the Department because, effective December 31, 1978, section 102 of Reorganization Plan No. 4 of 1978, 5 U.S.C. App. 1 (1996), transferred the authority of the Secretary of the Treasury to issue exemptions of the type proposed to the Secretary of Labor. Statutory Findings In accordance with section 408(a) of the Act and/or section 4975(c)(2) of the Code and the procedures set forth in 29 CFR part 2570, subpart B (55 FR 32836, 32847, August 10, 1990) and based upon the entire record, the Department makes the following findings:

(a)The exemption is administratively feasible;

(b)The exemption is in the interests of the plan and its participants and beneficiaries; and

(c)The exemption is protective of the rights of the participants and beneficiaries of the plan. Paul Niednagel IRAs and Lynne Niednagel IRAs (collectively, the IRAs), Located in Laguna Niguel, California [Prohibited Transaction Exemption 2007-10; Exemption Application Numbers: D-11393 and D-11394] Exemption The sanctions resulting from the application of section 4975 of the Code, by reason of sections 4975(c)(1)(D) and

(E)of the Code, shall not apply to the purchase (the Purchase) by the respective IRAs 1 of Paul and Lynne Niednagel (the Account Holders) of certain ownership interests (the Units) from Pacific Island Investment Partners, LLC. (Pacific Island) (the issuer of the Units), an entity which is indirectly controlled by Daniel and Stephen Niednagel (the Principals), both of whom are lineal descendents of the Account Holders and therefore disqualified persons with respect to the IRAs, provided that the following conditions are satisfied: 1 Because each IRA has only one participant, there is no jurisdiction under 29 CFR § 2510.3-3(b). However, there is jurisdiction under Title II of the Act pursuant to section 4975 of the Code. Conditions

(a)The Purchase of the Units by each IRA is for cash;

(b)The price paid by each IRA to purchase a Unit ($10,000) is identical to the price paid by other Pacific Island investors to acquire a Unit;

(c)The terms and conditions of each Purchase are at least as favorable as those available in an arm's length transaction with an unrelated third party;

(d)Each IRA does not pay any commissions or other expenses in connection with each Purchase; and

(e)Each IRA does not acquire Units if, after acquisition, the aggregate fair market value of the Units would exceed 25% of the fair market value of such IRA. Temporary Nature of Exemption This grant of exemption is temporary and becomes effective on the date of publication of the grant of the final exemption in the **Federal Register** . The exemption will expire on the date which is five

(5)years from the date of the grant of the exemption. Written Comments In the Notice of Proposed Exemption (the Notice), the Department of Labor (the Department) invited all interested persons to submit written comments on the proposed exemption within thirty

(30)days of the date of the publication of the Notice in the **Federal Register** on June 1, 2007. All comments were due by July 1, 2007. During the comment period, the Department received one written comment concerning the Notice; this comment was submitted by one of the Account Holders, Mr. Paul Niednagel. In his comment, Mr. Niednagel informed the Department that Condition

(a)of the Notice (located at the first column on page 30638 of the June 1, 2007 issue of the **Federal Register** ), which proposed that the cash purchase of the Units by each IRA be undertaken as a “one-time transaction”, could not be satisfied by the Account Holders because of the limited quantity of Units of Pacific Island available for sale to investors at any given point in time. Accordingly, Mr. Niednagel proposed that Condition

(a)be modified to remove the language stipulating that the Purchase of the Units occur as a one-time transaction. In addition, Mr. Niednagel proposed that the exemption be further modified to permit the Account Holders to purchase the Units incrementally over the course of a five year term, beginning from the date of the grant of an exemption for the proposed transaction. Mr. Niednagel stated that permitting the Account Holders to purchase the Units over such an extended period would be consistent with the availability of such Units for acquisition by investors. After giving full consideration to the entire record, including the written comments provided by Mr. Niednagel, the Department has determined to grant the exemption, subject to the modification of certain conditions initially contained in the Notice. While retaining the language contained in Condition

(a)of the Notice stipulating that “the Purchase of the Units by each IRA is for cash,” the Department has decided to adopt Mr. Niednagel's comments by:

(1)Deleting from the final exemption the requirement that the Purchase occur as a “one-time transaction”, and

(2)adding language to the exemption which stipulates that the Department's grant of relief for the Purchase of the Units is temporary in nature, and shall expire five years from the date of publication of the grant of exemption in the **Federal Register** . In addition, Condition

(e)of the Notice (located at the first column of page 30638 of the June 1, 2007 issue of the **Federal Register** ) stated that “[t]he IRA assets invested in the Units do not exceed 25% of the total assets of each IRA at the time of the Purchase.” For purposes of clarification, the Department has determined to modify Condition

(e)to read as follows: “Each IRA does not acquire Units if, after acquisition, the aggregate fair market value of the Units would exceed 25% of the fair market value of such IRA.” The complete application file for this exemption, encompassing all supplemental submissions received by the Department (including the written comment received by the Account Holder, Mr. Niednagel), is made available for public inspection in the Public Documents Room of the Employee Benefits Security Administration, Room N-1513, U.S. Department of Labor, 200 Constitution Avenue, NW., Washington, DC 20210. For a more complete statement of the facts and representations supporting the Department's decision to grant this exemption, interested persons should also refer to the notice of proposed exemption published on June 1, 2007 at 72 FR 30637 (as corrected by a notice of technical correction published on June 7, 2007 at 72 FR 31610). FOR FURTHER INFORMATION CONTACT: Mr. Mark Judge of the Department, telephone

(202)693-8339. (This is not a toll-free number.) The Revlon Employees Savings, Investment and Profit Sharing Plan (the Plan) Located in New York, NY [Prohibited Transaction Exemption No. 2007-11; [Application No. D-11406] Exemption The restrictions of sections 406(a), 406(b)(1) and (b)(2) and 407(a) of the Act and the sanctions resulting from the application of section 4975 of the Code, by reason of section 4975(c)(1)(A) through

(E)of the Code, shall not apply, effective December 18, 2006, to

(1)The acquisition of certain stock rights (Stock Right(s)) by the Plan in connection with a Stock Rights offering by Revlon, Inc. (Revlon), a holding company that wholly owns Revlon Consumer Products Corporation (RCPC), a party in interest with respect to the Plan;

(2)the holding of the Stock Rights by the Plan during the subscription period of the Stock Rights offering; and

(3)the disposition or exercise of the Stock Rights by the Plan, provided that the following conditions were met:

(a)The Stock Rights were acquired pursuant to Plan provisions for individually-directed investment of such accounts;

(b)The Plan's receipt of the Stock Rights occurred in connection with a Stock Rights offering made available on the same terms to all shareholders of common stock of Revlon;

(c)All decisions regarding the holding and disposition of the Stock Rights by the Plan were made, in accordance with the Plan provisions for individually-directed investment of participant accounts, by the individual Plan participants whose accounts in the Plan received Stock Rights in connection with the Stock Rights offering;

(d)The Plan's acquisition of the Stock Rights resulted from an independent act of Revlon as a corporate entity, and all holders of the Stock Rights, including the Plan, were treated in the same manner with respect to the acquisition; and

(e)The Plan received the same proportionate number of Stock Rights as other owners of Class A common stock. *Effective Date:* This exemption is effective as of December 18, 2006. For a more complete statement of the facts and representations supporting the Department's decision to grant this exemption, refer to the Notice of Proposed Exemption published on April 30, 2007 at 72 FR 21303. FOR FURTHER INFORMATION CONTACT: Khalif Ford of the Department, telephone

(202)693-8540 (this is not a toll-free number). American Maritime Officers Safety & Education Plan (the S&E Plan) Located in Dania Beach, Florida and Toledo, Ohio [Prohibited Transaction Exemption No. 2007-12; Exemption Application No. L-11365] Exemption The restrictions of sections 406(a)(1)(C), and 406(a)(1)(D) of the Act shall not apply to the S&E Plan, doing business as the STAR Center, entering into an agreement with Kongsberg Maritime Simulator Inc. (Kongsberg), a party in interest, to provide certain services (the Services) to Kongsberg at the Dania Beach, Florida facility (the Facility) involving hydrodynamic and geographic modeling and training, provided that the following conditions are met:

(a)The S&E Plan will charge and will be paid for the Services at the rates approved by the Board of Trustees of the S&E Plan (the Trustees) for similar services provided to unrelated third parties;

(b)The terms of the arrangement between the S&E Plan and Kongsberg are at least as favorable to the S&E Plan as those obtainable in an arm's length transaction with an unrelated party;

(c)An independent auditor will perform annual audits of the S&E Plan to identify and reconcile any recordkeeping discrepancies involving the Services; and

(d)The S&E Plan will maintain, for a period of six

(6)years, the records necessary to determine whether the conditions of this exemption have been met. For a more complete statement of the facts and representations supporting the Department's decision to grant this exemption, refer to the Notice of Proposed Exemption (the Notice) published on April 30, 2007, at 72 FR 21305. The Department received one comment with regard to the Notice. The commenter, the applicant, requested that the Department modify certain language contained in the Notice. Specifically, on page 21305 of the Notice, the operative language states the following: “The restrictions of sections 406(a)(1)(C) and 406(a)(1)(D) of the Act shall not apply to the S&E Plan's, doing business as STAR Center, entering into an agreement with Kongsberg Maritime Simulator Inc. (Kongsberg), a party in interest, to provide certain services (the Services) to Kongsberg at the Dania Beach, Florida facility (the Facility) involving hydrodynamic and geographic modeling and training required in connection with Kongsberg's contract with the U.S. Navy, provided that the following conditions are met:” The applicant requests that the services described in the Notice not be limited to services provided in connection with the U.S. Navy contract. The applicant represents that the additional services that the applicant is requesting would be identical to those described in the Notice. The applicant further represents that the modification would be beneficial to the S&E Plan because the STAR Center would provide the services at prices that would be charged to an unrelated third party. After due consideration, the Department has adopted the commenter's request and accordingly, has modified the operative language to read as follows: “The restrictions of sections 406(a)(1)(C), 406(a)(1)(D) of the Act shall not apply to the S&E Plan, doing business as the STAR Center, entering into an agreement with Kongsberg Maritime Simulator Inc. (Kongsberg), a party in interest, to provide certain services (the Services) to Kongsberg at the Dania Beach, Florida facility (the Facility) involving hydrodynamic and geographic modeling and training, provided that the following conditions were met:” The Department hereby grants the exemption and incorporates the modification described above. FOR FURTHER INFORMATION CONTACT: Khalif Ford of the Department, telephone

(202)693-8562 (this is not a toll-free number). Sheet Metal Workers Local Union 17 Insurance Fund (the Fund), Located in Boston, Massachusetts [Prohibited Transaction Exemption 2007-13; Exemption Application Number: L-11382] Exemption The restrictions of sections 406(a) and 406(b)(1) and (b)(2) of the Act shall not apply to the purchase (the Purchase) by the Fund of a business condominium unit (Unit No. 1) from the Sheet Metal Workers International Association Local 17 Building Association, Inc. (the Building Corporation), a party in interest with respect to the Fund, provided that the following conditions are satisfied: Conditions

(a)The terms and conditions of the transaction are no less favorable to the Fund than those which the Fund would receive in an arm's length transaction with an unrelated party;

(b)The Purchase of Unit No. 1 by the Fund is a one-time transaction for cash;

(c)The Fund will not pay any sales commissions, fees, or other similar expenses to any party as a result of the proposed transaction;

(d)The Fund will purchase Unit No. 1 from the Building Corporation for the lesser of

(1)$800,000 or

(2)the fair market value of the Property as determined on the date of the purchase by a qualified, independent appraiser;

(e)The proposed transaction will be consummated only after a qualified, independent fiduciary, acting on behalf of the Fund, negotiates the relevant terms and conditions of the transaction and determines that proceeding with the transaction would be in the interest of the Fund; and

(f)The independent fiduciary monitors the transaction on behalf of the Fund to ensure compliance with the agreed upon terms. For a more complete statement of the facts and representations supporting the Department's decision to grant this exemption, refer to the notice of proposed exemption published on June 1, 2007 at 72 FR 30635. FOR FURTHER INFORMATION CONTACT: Mr. Mark Judge of the Department, telephone

(202)693-8339. (This is not a toll-free number.) General Information The attention of interested persons is directed to the following:

(1)The fact that a transaction is the subject of an exemption under section 408(a) of the Act and/or section 4975(c)(2) of the Code does not relieve a fiduciary or other party in interest or disqualified person from certain other provisions to which the exemption does not apply and the general fiduciary responsibility provisions of section 404 of the Act, which among other things require a fiduciary to discharge his duties respecting the plan solely in the interest of the participants and beneficiaries of the plan and in a prudent fashion in accordance with section 404(a)(1)(B) of the Act; nor does it affect the requirement of section 401(a) of the Code that the plan must operate for the exclusive benefit of the employees of the employer maintaining the plan and their beneficiaries;

(2)This exemption is supplemental to and not in derogation of, any other provisions of the Act and/or the Code, including statutory or administrative exemptions and transactional rules. Furthermore, the fact that a transaction is subject to an administrative or statutory exemption is not dispositive of whether the transaction is in fact a prohibited transaction; and

(3)The availability of this exemption is subject to the express condition that the material facts and representations contained in the application accurately describes all material terms of the transaction which is the subject of the exemption. Signed at Washington, DC, this 27th day of July, 2007. Ivan Strasfeld, Director of Exemption Determinations, Employee Benefits Security Administration, U.S. Department of Labor. [FR Doc. E7-14881 Filed 7-31-07; 8:45 am] BILLING CODE 4510-29-P DEPARTMENT OF LABOR Mine Safety and Health Administration Technical Study Panel on the Utilization of Belt Air and the Composition and Fire Retardant Properties of Belt Materials in Underground Coal Mining AGENCY: Mine Safety and Health Administration (MSHA), Labor. ACTION: Notice of meeting, public comment deadline. SUMMARY: This notice informs interested persons of the fifth meeting of the Technical Study Panel (Panel) on the Utilization of Belt Air and the Composition and Fire Retardant Properties of Belt Materials in Underground Coal Mining. The public is invited to attend. This notice also informs interested persons of the deadline for submission of public comments to the Panel. DATES: Comments must be received by MSHA on or before August 15, 2007. The meeting will be held on September 17-19, 2007. The meeting will start at 9 a.m. each day and conclude by 5 p.m. ADDRESSES: Comments must be clearly identified with “Technical Study Panel on the Utilization of Belt Air” and may be sent to MSHA by any of the following methods:

(1)*Telefax:*

(202)693-9441. Include “Technical Study Panel on the Utilization of Belt Air” in the subject line.

(2)*Regular Mail:* MSHA, Office of Standards, Regulations, and Variances, 1100 Wilson Boulevard, Room 2350, Arlington, Virginia 22209-3939.

(3)*Hand Delivery or Courier:* MSHA, Office of Standards, Regulations, and Variances, 1100 Wilson Boulevard, Room 2350, Arlington, Virginia 22209-3939. Stop by the 21st floor and sign in at the receptionist's desk. The meeting location is the Sheraton Reston Hotel, 11810 Sunrise Valley Drive, Reston, Virginia 20191 ( *Telephone:* (703-620-9000). FOR FURTHER INFORMATION CONTACT: Patricia W. Silvey, Director, Office of Standards, Regulations, and Variances, Mine Safety and Health Administration, 1100 Wilson Boulevard, Room 2350, Arlington, Virginia 22209-3939; *silvey.patricia@dol.gov* (internet e-mail), 202-693-9440 (voice), or 202-693-9441 (facsimile). SUPPLEMENTARY INFORMATION: The Panel was created under section 11 of the Mine Improvement and New Emergency Response (MINER) Act of 2006 (Pub. L. 109-236). The purpose of the Panel is to provide independent scientific and engineering review and recommendations concerning the utilization of belt air and the composition and fire retardant properties of belt materials in underground coal mining. In December 2007, the Panel must submit a report to the Secretaries of Labor and Health and Human Services, the Senate Committee on Health, Education, Labor and Pensions, and the House Committee on Education and the Workforce. The first meeting of the Panel was held in Washington, DC on January 9-10, 2007. The second meeting of the Panel was held in Coraopolis, Pennsylvania on March 28-30, 2007. The third meeting of the Panel was held in Salt Lake City, Utah on May 16-17, 2007. The fourth meeting of the Panel was held in Birmingham, Alabama on June 20-21, 2007. The agenda for the fifth meeting will include:

(1)Delivery of subcommittee recommendations to the Panel for discussion;

(2)Panel deliberation and voting on the recommendations; and

(3)Preparation of the Panel's report. The public is invited to attend. However, unlike the previous meetings, no public input will be taken during this meeting due to the work process. All public comment must be received by MSHA no later than August 15, 2007 in order for the Panel to have adequate time to review submitted material. MSHA will incorporate all written submissions into the official record, which includes the transcript, and will make them available to the public. The public may inspect the official record of the meetings at the MSHA address listed above under the heading FOR FURTHER INFORMATION CONTACT . In addition, this information will be posted on the Agency's single source webpage titled “The Technical Study Panel on the Utilization of Belt Air and the Composition and Fire Retardant Properties of Belt Materials in Underground Coal Mining Single Source Page.” The Single Source page is located at *http://www.msha.gov/BeltAir/BeltAir.asp.* Dated: July 26, 2007. Richard E. Stickler, Assistant Secretary for Mine Safety and Health. [FR Doc. E7-14899 Filed 7-31-07; 8:45 am] BILLING CODE 4510-43-P NATIONAL FOUNDATION ON THE ARTS AND THE HUMANITIES National Endowment for the Arts; Federal Advisory Committee on International Exhibitions Pursuant to Section 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92-463), as amended, notice is hereby given that a meeting of the Federal Advisory Committee on International Exhibitions will be held by teleconference on August 16, 2007 from the Nancy Hanks Center, 1100 Pennsylvania Avenue, NW., Washington, DC 20506. The meeting, for the purpose of application review, will take place from 1 p.m.-3:15 p.m. (ending time is approximate), and will be closed. The closed portions of meetings are for the purpose of Panel review, discussion, evaluation, and recommendations on financial assistance under the National Foundation on the Arts and the Humanities Act of 1965, as amended, including information given in confidence to the agency. In accordance with the determination of the Chairman of February 16, 2007, these sessions will be closed to the public pursuant to subsection (c)(6) of section 552b of Title 5, United States Code. Further information with reference to these meetings can be obtained from Ms. Kathy Plowitz-Worden, Office of Guidelines & Panel Operations, National Endowment for the Arts, Washington, DC 20506, or call 202/682-5691. Dated: July 27, 2007. Kathy Plowitz-Worden, Panel Coordinator. [FR Doc. E7-14828 Filed 7-31-07; 8:45 am] BILLING CODE 7537-01-P NATIONAL SCIENCE FOUNDATION National Science Board; Sunshine Act Meetings; Notice The National Science Board, pursuant to NSF regulations (45 CFR part 614), the National Science Foundation Act, as amended (42 U.S.C. 1862n-5), and the Government in the Sunshine Act (5 U.S.C. 552b), hereby gives notice in regard to the scheduling of meetings for the transaction of National Science Board business and other matters specified, as follows: Agency Holding Meeting: National Science Board. Date and Time: Monday, August 6, 2007, at 1:30 p.m.; Tuesday, August 7, 2007 at 8 a.m.; and Wednesday, August 8, 2007 at 7:45 a.m. Place: National Science Foundation, 4201 Wilson Blvd., Room 1235, Arlington, VA 22230. All visitors must report to the NSF visitor desk at the 9th and N. Stuart Streets entrance to receive a visitor's badge. Status: Some portions open, some portions closed. Open Sessions August 7, 2007 8 a.m.-9 a.m. 9 a.m.-11 a.m. 11 a.m.-11:30 a.m. 11:30 a.m.-12:15 p.m. 2 p.m.-2:45 p.m. 2:45 p.m.-4:45 p.m. August 8, 2007 7:45 a.m.-8 a.m. 8 a.m.-9 a.m. 9:30 a.m.-11:30 a.m. 1:45 p.m.-3 p.m. Closed Sessions August 6, 2007 1:30 p.m.-5 p.m. August 7, 2007 1:45 p.m.-2 p.m. 4:45 p.m.-5:15 p.m. August 8, 2007 9 a.m.-9:30 p.m. 12:30 p.m.-1 p.m. 1 p.m.-1:45 p.m. Agency Contact: Dr. Robert E. Webber, *rwebber@nsf.gov* ,

(703)292-7000, *http://www.nsf.gov/nsb/.* Matters To Be Discussed: Monday, August 6, 2007 Committee on Programs and Plans Closed Session (1:30 a.m.-5 p.m.) • *NSB Information Item:* Portfolio of proposed High-Performance Computing

(HPC)awards. • *NSB Action Item:* HPC Track 1: Petascale. • *NSB Action Item:* HPC Track 2: Path to Petascale. • *HPCOPS Overview:* High-Performance Computing for Science and Engineering Research & Education: Operations (User Support, System Administration and Maintenance) (HPCOPS). • *NSB Action Item:* HPCOPS Awards. • *NSB Action Item:* National High Magnetic Field Laboratory (NHMFL). • *NSB Action Item:* Advanced Technology Solar Telescope (ATST). Tuesday, August 7, 2007 CPP Subcommittee on Polar Issues Open Session (8 a.m.-9 a.m.) • Approval of May Minutes. • SOPI Chairman's Remarks. • OPP Director's Report. • IceCube Neutrino Observatory. • International Polar Year Update. EHR Subcommittee on Science and Engineering Indicators Open Session (9 a.m.-11 a.m.) • Approval of May minutes. • Subcommittee Chairman's remarks. • Discussion of Orange Book. • Discussion of draft Overview Chapter. • Science and Engineering Indicators 2008 cover. • Science and Engineering Indicators 2008 Digest. • Science and Engineering Indicators 2008 Companion Piece. • Subcommittee Chairman's summary. CPP Task Force on International Science Open Session (11 a.m.-11:30 a.m.) • Approval of Minutes. • Task Force Chairman Remarks. • Discussion of the draft Task Force report on international science and engineering partnerships. CPP Task Force on Transformative Research Open Session (11:30 a.m.-12:15 p.m.) • Approval of Minutes for March 2007 Meeting. • Task Force Chairman's Remarks. • Review of Transformative Research Initiative developed by NSF as recommended in the report, *Enhancing Support of Transformative Research at the National Science Foundation.* Committee on Audit and Oversight Closed Session (1:45 p.m.-2 p.m.) • OIG FY 2009 Budget. • Pending Investigations. Open Session (2 p.m.-2:45 p.m.) • Approval of Minutes of May 14, 2007 Meeting. • Committee Chairman's Opening Remarks. • FY 2007 Financial Statement Audit Status. • Chief Financial Officer's Update. • Committee Chairman's Closing Remarks. Committee on Programs and Plans Open Session (2:45 p.m.-4:45 p.m.) • Approval of May 8, 2007 CPP Minutes. • Committee Chairman's Remarks. • *Status Reports:* ○ Subcommittee on Polar Issues. ○ *Task Force on International Science:* Draft Report and Recommendations. ○ Task Force on Transformative Research. • *Discussion Item:* Future Plans for the *ad hoc* Task Group on Sustainable Energy. • *Discussion Item:* NSB/DRB Thresholds. • *Discussion Item:* NSB Policy on Recompetition of NSF Awards. • *Discussion Item:* Facilities Operations and Management. • *Discussion Item:* Major Research Facilities and Facility Plan. • *NSB Item:* Examination of Priority Order of MREFC New Starts. • Committee Chairman's Remarks. *ad hoc* Committee on Nominations for NSB Class of 2008-2014 Closed Session (4:45 p.m.-5:15 p.m.) • Approval of Minutes, Teleconference July 19, 2007. • Approval of Minutes, Teleconference July 26, 2007. • Committee Chairman's Remarks. • Review of Candidates. • Preparation of Final Slate of Candidates for Board Approval. Wednesday, August 8, 2007 Executive Committee Open Session (7:45 a.m.-8 a.m.) • Approval of Minutes for May 2007. • Executive Committee Chairman's Remarks. • Updates or New Business from Committee Members. Committee on Strategy and Budget Open Session (8 a.m.-9 a.m.) • Approval of CSB Minutes, May 15, 2007. • Committee Chairman's Remarks. • Report of the NSF Working Group on the Impact of Proposal and Award Management Mechanisms (IPAMM). • Discussion of CSB *ad hoc* Task Group on Cost-Sharing. • Status of NSF Budget Request and Congressional Testimony. Closed Session (9 a.m.-9:30 a.m.) • Approval of CSB Teleconference Minutes, June 18, 2007. • Approval of CSB Teleconference Minutes, July 23, 2007. • Discussion of FY 2009 Board Budget Request. • Discussion of FY 2009 NSF Budget Request. Committee on Education and Human Resources Open Session (9:30 a.m.-11:30 a.m.) • Approval of May 2007 Minutes. • Committee Chairman's Remarks. • Report on Education Commission of the States 2007 National Forum on Education Policy. • Report of Subcommittee on Science and Engineering Indicators. • Discussion of Summary Recommendations from Engineering Education Workshops. • Discussion of Draft Action Plan for STEM Education. • NSB Executive Officer's Report. Plenary Executive Closed Closed Session (12:30 p.m.-1 p.m.) • Approval of May 2007 Minutes. • Potential Board Member Nominees. • Candidate Sites for Retreat and Visit 2008. Plenary Closed Closed Session (1 p.m.-1:45 p.m.) • Approval of May 2007 Minutes. • Awards and Agreements. • Closed Committee Reports. Plenary Open Open Session (1:45 p.m.-3 p.m.) • Approval of May 2007 Minutes. • Resolution to Close October 2007 Meeting. • Chairman's Report. • Director's Report. • Open Committee Reports. • STEM Education Action Plan. Michael P. Crosby, Executive Officer and Board Office Direc. [FR Doc. E7-14980 Filed 7-31-07; 8:45 am] BILLING CODE 7555-01-P NUCLEAR REGULATORY COMMISSION [Docket Nos. 50-247 and 50-286] Entergy Nuclear Operations, Inc., Indian Point Nuclear Generating Unit Nos. 2 and 3; Notice of Acceptance for Docketing of the Application and Notice of Opportunity for Hearing Regarding Renewal of Facility Operating License Nos. DPR-26 and DPR-64 for an Additional 20-Year Period The U.S. Nuclear Regulatory Commission (NRC or the Commission) is considering an application for the renewal of Operating License Nos. DPR-26 and DPR-64, which authorize Entergy Nuclear Operations, Inc., to operate Indian Point Nuclear Generating Unit Nos. 2 and 3, respectively, at 3216 megawatts thermal

(MWt)for each unit. The renewed licenses would authorize the applicant to operate Indian Point Nuclear Generating Unit Nos. 2 and 3 for an additional 20 years beyond the period specified in the current licenses. The current operating licenses for Indian Point Nuclear Generating Unit Nos. 2 and 3 expire on September 9, 2013, and December 12, 2015, respectively. Entergy Nuclear Operations, Inc. submitted the application dated April 23, 2007, as supplemented by letters dated May 3, 2007, and June 21, 2007, pursuant to 10 CFR Part 54, to renew Operating License Nos. DPR-26 and DPR-64 for Indian Point Nuclear Generating Unit Nos. 2 and 3, respectively. A Notice of Receipt and Availability of the license renewal application (LRA), “Entergy Nuclear Operations, Inc.; Notice of Receipt and Availability of Application for Renewal of Indian Point Nuclear Generating Unit Nos. 2 and 3; Facility Operating Licenses Nos. DPR-26 and DPR-64 for an Additional 20-Year Period,” was published in the **Federal Register** on May 11, 2007 (72 FR 26850). The Commission's staff has determined that Entergy Nuclear Operations, Inc. has submitted sufficient information in accordance with 10 CFR Sections 54.19, 54.21, 54.22, 54.23, 51.45, and 51.53(c) to enable the staff to undertake a review of the application, and the application is therefore acceptable for docketing. The current Docket Nos. 50-247 and 50-286 for Operating License Nos. DPR-26 and DPR-64, respectively, will be retained. The determination to accept the license renewal application for docketing does not constitute a determination that a renewed license should be issued, and does not preclude the NRC staff from requesting additional information as the review proceeds. Before issuance of each requested renewed license, the NRC will have made the findings required by the Atomic Energy Act of 1954, as amended (the Act), and the Commission's rules and regulations. In accordance with 10 CFR 54.29, the NRC may issue a renewed license on the basis of its review if it finds that actions have been identified and have been or will be taken with respect to:

(1)Managing the effects of aging during the period of extended operation on the functionality of structures and components that have been identified as requiring aging management review, and

(2)time-limited aging analyses that have been identified as requiring review, such that there is reasonable assurance that the activities authorized by the renewed license will continue to be conducted in accordance with the current licensing basis (CLB), and that any changes made to the plant's CLB comply with the Act and the Commission's regulations. Additionally, in accordance with 10 CFR 51.95(c), the NRC will prepare an environmental impact statement that is a supplement to the Commission's NUREG-1437, “Generic Environmental Impact Statement for License Renewal of Nuclear Power Plants,” dated May 1996. In considering the license renewal application, the Commission must find that the applicable requirements of Subpart A of 10 CFR Part 51 have been satisfied. Pursuant to 10 CFR 51.26, and as part of the environmental scoping process, the staff intends to hold a public scoping meeting. Detailed information regarding the environmental scoping meeting will be the subject of a separate **Federal Register** notice. Within 60 days after the date of publication of this **Federal Register** Notice, any person whose interest may be affected by this proceeding and who wishes to participate as a party in the proceeding must file a written request for a hearing or a petition for leave to intervene with respect to the renewal of the license. Requests for a hearing or petitions for leave to intervene must be filed in accordance with the Commission's “Rules of Practice for Domestic Licensing Proceedings” in 10 CFR Part 2. Interested persons should consult a current copy of 10 CFR 2.309, which is available at the Commission's Public Document Room (PDR), located at One White Flint North, 11555 Rockville Pike (first floor), Rockville, Maryland 20852 and is accessible from the NRC's Agencywide Documents Access and Management System (ADAMS) Public Electronic Reading Room on the Internet at *http://www.nrc.gov/reading-rm/adams.html.* Persons who do not have access to ADAMS or who encounter problems in accessing the documents located in ADAMS should contact the NRC's PDR reference staff by telephone at 1-800-397-4209 or 301-415-4737, or by e-mail at *pdr@nrc.gov.* If a request for a hearing/petition for leave to intervene is filed within the 60-day period, the Commission or a presiding officer designated by the Commission or by the Chief Administrative Judge of the Atomic Safety and Licensing Board Panel will rule on the request and/or petition; and the Secretary or the Chief Administrative Judge of the Atomic Safety and Licensing Board will issue a notice of a hearing or an appropriate order. In the event that no request for a hearing or petition for leave to intervene is filed within the 60-day period, the NRC may, upon completion of its evaluations and upon making the findings required under 10 CFR Parts 51 and 54, renew the license without further notice. As required by 10 CFR 2.309, a petition for leave to intervene shall set forth with particularity the interest of the petitioner in the proceeding, and how that interest may be affected by the results of the proceeding, taking into consideration the limited scope of matters that may be considered pursuant to 10 CFR Parts 51 and 54. The petition must specifically explain the reasons why intervention should be permitted with particular reference to the following factors:

(1)The nature of the requestor's/petitioner's right under the Act to be made a party to the proceeding;

(2)the nature and extent of the requestor's/petitioner's property, financial, or other interest in the proceeding; and

(3)the possible effect of any decision or order which may be entered in the proceeding on the requestor's/petitioner's interest. The petition must also set forth the specific contentions which the petitioner/requestor seeks to have litigated in the proceeding. Each contention must consist of a specific statement of the issue of law or fact to be raised or controverted. In addition, the requestor/petitioner shall provide a brief explanation of the bases of each contention and a concise statement of the alleged facts or the expert opinion that supports the contention on which the requestor/petitioner intends to rely in proving the contention at the hearing. The requestor/petitioner must also provide references to those specific sources and documents of which the requestor/petitioner is aware and on which the requestor/petitioner intends to rely to establish those facts or expert opinion. The requestor/petitioner must provide sufficient information to show that a genuine dispute exists with the applicant on a material issue of law or fact. 1 Contentions shall be limited to matters within the scope of the action under consideration. The contention must be one that, if proven, would entitle the requestor/petitioner to relief. A requestor/petitioner who fails to satisfy these requirements with respect to at least one contention will not be permitted to participate as a party. 1 To the extent that the application contains attachments and supporting documents that are not publicly available because they are asserted to contain safeguards or proprietary information, petitioners desiring access to this information should contact the applicant or applicant's counsel to discuss the need for a protective order. The Commission requests that each contention be given a separate numeric or alpha designation within one of the following groups:

(1)Technical (primarily related to safety concerns);

(2)environmental; or

(3)miscellaneous. As specified in 10 CFR 2.309, if two or more requestors/petitioners seek to co-sponsor a contention or propose substantially the same contention, the requestors/petitioners will be required to jointly designate a representative who shall have the authority to act for the requestors/petitioners with respect to that contention. Those permitted to intervene become parties to the proceeding, subject to any limitations in the order granting leave to intervene, and have the opportunity to participate fully in the conduct of the hearing. A request for a hearing or a petition for leave to intervene must be filed by:

(1)First class mail addressed to the Office of the Secretary of the Commission, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, Attention: Rulemaking and Adjudications Staff;

(2)courier, express mail, and expedited delivery services to the Office of the Secretary, Sixteenth Floor, One White Flint North, 11555 Rockville Pike, Rockville, Maryland 20852, Attention: Rulemaking and Adjudications Staff;

(3)E-mail addressed to the Office of the Secretary, U.S. Nuclear Regulatory Commission, *HEARINGDOCKET@NRC.GOV;* or

(4)facsimile transmission addressed to the Office of the Secretary, U.S. Nuclear Regulatory Commission, Washington, DC., Attention: Rulemaking and Adjudications Staff at 301-415-1101 (verification number: 301-415-1966). 2 A copy of the request for hearing or petition for leave to intervene must also be sent to the Office of the General Counsel, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, and it is requested that copies be transmitted either by means of facsimile transmission to 301-415-3725 or by e-mail to *OGCMailCenter@nrc.gov.* A copy of the request for hearing or petition for leave to intervene should also be sent to the Assistant General Counsel, Entergy Nuclear Operations, Inc., 440 Hamilton Avenue, White Plains, NY 10601. 2 If the request/petition is filed by e-mail or facsimile, an original and two copies of the document must be mailed within 2

(two)business days thereafter to the Secretary, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; Attention: Rulemaking and Adjudications Staff. Non-timely requests and/or petitions and contentions will not be entertained absent a determination by the Commission, the presiding officer, or the Atomic Safety and Licensing Board that the petition, request and/or contentions should be granted based on a balancing of the factors specified in 10 CFR 2.309(a)(1)(i)-(viii). Detailed information about the license renewal process can be found under the Nuclear Reactors icon at *http://www.nrc.gov/reactors/operating/licensing/renewal.html* on the NRC's Web site. Copies of the application to renew the operating licenses for Indian Point Nuclear Generating Unit Nos. 2 and 3, are available for public inspection at the Commission's PDR, located at One White Flint North, 11555 Rockville Pike (first floor), Rockville, Maryland 20852-2738, and at *http://www.nrc.gov/reactors/operating/licensing/renewal/applications.html* , the NRC's Web site while the application is under review. The application may be accessed in ADAMS through the NRC's Public Electronic Reading Room on the Internet at *http://www.nrc.gov/reading-rm/adams.html* under ADAMS Accession Numbers ML071210507, ML071280700, and ML071800318. As stated above, persons who do not have access to ADAMS or who encounter problems in accessing the documents located in ADAMS may contact the NRC Public Document Room

(PDR)Reference staff by telephone at 1-800-397-4209 or 301-415-4737, or by e-mail to *pdr@nrc.gov.* The NRC staff has verified that a copy of the license renewal application is also available to local residents near Indian Point Nuclear Generating Unit Nos. 2 and 3 at the White Plains Public Library, 100 Martine Avenue, White Plains, NY 10601; the Field Library, 4 Nelson Avenue, Peekskill, NY 10566; and the Hendrick Hudson Free Library, 185 Kings Ferry Road, Montrose, NY 10548. Dated at Rockville, Maryland, this 25th day of July, 2007. For The Nuclear Regulatory Commission. Pao-Tsin Kuo, Director, Division of License Renewal, Office of Nuclear Reactor Regulation. [FR Doc. E7-14864 Filed 7-31-07; 8:45 am] BILLING CODE 7590-01-P NUCLEAR REGULATORY COMMISSION Application for a License To Export High-Enriched Uranium Pursuant to 10 CFR 110.70(b)(2) “Public Notice of Receipt of an Application,” please take notice that the Nuclear Regulatory Commission has received the following request for an export license. Copies of the request can be accessed through the Public Electronic Reading Room

(PERR)link *http://www.nrc.gov/reading-rm/adams.html* at the NRC Homepage. A request for a hearing or petition for leave to intervene may be filed within 30 days after publication of this notice in the **Federal Register** . Any request for hearing or petition for leave to intervene shall be served by the requestor or petitioner upon the applicant, the Office of the General Counsel, U.S. Nuclear Regulatory Commission, Washington, DC 20555; the Secretary, U.S. Nuclear Regulatory Commission, Washington, DC 20555; and the Executive Secretary, U.S. Department of State, Washington, DC 20520. In its review of the application for a license to export special nuclear material as defined in 10 CFR part 110 and noticed herein, the Commission does not evaluate the health, safety or environmental effects in the recipient nation of the material to be exported. The information concerning the application follows. NRC Export License Application for High-Enriched Uranium Name of applicant, date of application, date received, application number, docket number Description of material Material type Total quantity End use Recipient country DOE/NNSA—Y12 National Security Complex, June 28, 2007, July 3, 2007, XSNM3504, 11005701 High-Enriched Uranium (93.35%) Up to 15.5 kg Uranium (14.470 kg U-235) To fabricate targets for irradiation in the National Research Universal

(NRU)Reactor to produce medical radioisotopes Canada. For the Nuclear Regulatory Commission. Dated this 24th day of July 2007 at Rockville, Maryland. Stephen Dembek, Acting Deputy Director, Office of International Programs. [FR Doc. E7-14861 Filed 7-31-07; 8:45 am] BILLING CODE 7590-01-P NUCLEAR REGULATORY COMMISSION Request for a License To Export Radioactive Waste Pursuant to 10 CFR 110.70

(c)“Public notice of receipt of an application,” please take notice that the Nuclear Regulatory Commission has received the following request for an export license. Copies of the request are available electronically through ADAMS and can be accessed through the Public Electronic Reading Room

(PERR)link *http://www.nrc.gov/reading-rm.html* at the NRC Homepage. A request for a hearing or petition for leave to intervene may be filed within 30 days after publication of this notice in the **Federal Register** . Any request for hearing or petition for leave to intervene shall be served by the requestor or petitioner upon the applicant, the Office of the General Counsel, U.S. Nuclear Regulatory Commission, Washington DC 20555; the Secretary, U.S. Nuclear Regulatory Commission, Washington, DC 20555; and the Executive Secretary, U.S. Department of State, Washington, DC 20520. The information concerning this license application follows. NRC Export License Application Name of applicant, date of application, date received, application No., docket No. Description of material Material type Total quantity End use Recipient country Pacific EcoSolutions, Inc. is in the process of changing its name to Perma-Fix Northwest Inc. If approved, the licensee for this export will be Perma-Fix Northwest. Inc., May 16, 2007, June 18, 2007, XW012, 11005699 Class A radioactive waste in various forms resulting from processing imported contaminated materials, or as non-conforming imported materials, which could not be processed nor recycled Not to exceed the total quantity of radioactively contaminated materials imported under NRC Import License IW022 Return for ultimate disposal of non-conforming imported waste or processed material that can be attributed to the Canadian generator Canada. For the Nuclear Regulatory Commission. Dated this 24th day of July 2007 at Rockville, Maryland. Stephen Dembek, Acting Deputy Director, Office of International Programs. [FR Doc. E7-14862 Filed 7-31-07; 8:45 am] BILLING CODE 7590-01-P NUCLEAR REGULATORY COMMISSION Request for a License To Import Radioactive Waste Pursuant to 10 CFR 110.70(c) “Public notice of receipt of an application,” please take notice that the Nuclear Regulatory Commission

(NRC)has received the following request for an import license. Copies of the request are available electronically through ADAMS and can be accessed through the Public Electronic Reading Room

(PERR)link: *http://www.nrc.gov/reading-rm.html* at the NRC Homepage. A request for a hearing or petition for leave to intervene may be filed within 30 days after publication of this notice in the **Federal Register** . Any request for hearing or petition for leave to intervene shall be served by the requestor or petitioner upon the applicant, the Office of the General Counsel, U.S. Nuclear Regulatory Commission, Washington, DC 20555; the Secretary, U.S. Nuclear Regulatory Commission, Washington, DC 20555; and the Executive Secretary, U.S. Department of State, Washington, DC 20520. The information concerning this license application follows. NRC Import License Application Description of Material Name of applicant date of application date received application No. docket No. Material type Total quantity End use Country of origin Pacific EcoSolutions, Inc. is in the process of changing its name to Perma-Fix Northwest. Inc. If approved, the licensee for this import will be Perma-Fix Northwest. Inc. May 16, 2007 June 18, 2007 IW022 11005700 Class A radioactive waste including various materials (e.g., wood, metal, paper, cloth, concrete, rubber, plastic, liquids, aqueous-organic fluids, animal carcasses, and human-animal waste) contaminated with radionuclides during licensed activities; e.g., routine operations, maintenance, equipment use, decontamination, remediation, and decommissioning. Up to a maximum total of 5,500 tons or about 1,000 tons metal, 4,000 tons dry activity material, and 500 tons liquid, contaminated with various radionuclides in varying combinations. Activity levels will not exceed licensee possession limits, and materials will be handled in accordance with all U.S. Federal and State regulations. Recycling for beneficial reuse and processing for volume reduction via thermal and non-thermal treatment. Liquids to be recycled. Non-conforming materials and/or radioactive waste that is attributed to Canadian supplier, will be returned per appropriate NRC export license (Ref. XW012), and will not remain in the U.S. Canada. For the Nuclear Regulatory Commission. Dated this 24th day of July, 2007, at Rockville, Maryland. Stephen Dembek, Acting Deputy Director, Office of International Programs. [FR Doc. E7-14931 Filed 7-31-07; 8:45 am] BILLING CODE 7590-01-P NUCLEAR REGULATORY COMMISSION Advisory Committee on the Medical Uses of Isotopes; Meeting Notice AGENCY: U.S. Nuclear Regulatory Commission. ACTION: Notice of meeting. SUMMARY: The U.S. Nuclear Regulatory Commission will convene a public teleconference meeting of the Advisory Committee on the Medical Uses of Isotopes (ACMUI) on August 15, 2007. The topic of the discussion will be “Increased Controls: Fingerprinting Orders.” *Purpose:* Discuss information related to increased controls and fingerprinting orders as this subject relates to medical licensees. DATES: Wednesday, August 15, 2007, from 1 p.m. to 2 p.m Eastern Daylight Time. *Public Participation:* Any member of the public who wishes to participate in the teleconference discussion may contact Ashley M. Tull using the contact information below. *Contact:* Ashley M. Tull by telephone

(301)415-5294; e-mail *amt1@nrc.gov;* or mail Office of Federal and State Materials, U.S. Nuclear Regulatory Commission, Mail Stop T8-E24, Washington, DC 20555-0001. Conduct of the Meeting Leon S. Malmud, M.D., will chair the meeting. Dr. Malmud will conduct the meeting in a manner that will facilitate the orderly conduct of business. The following procedures apply to public participation in the meeting: 1. This meeting will be held in accordance with the Atomic Energy Act of 1954, as amended (primarily Section 161a); the Federal Advisory Committee Act (5 U.S.C. App); and the Commission's regulations in Title 10, U.S. Code of Federal Regulations, Part 7. 2 . Persons who wish to provide a statement should submit an e-mail or mail a reproducible copy to Ms. Tull at the contact information provided. Submittals must be e-mailed or postmarked by August 13, 2007, and must pertain to the topics on the agenda for the meeting. 3 . Questions and comments from members of the public will be permitted during the meeting, at the discretion of the Chairman. 4 . The transcript and written comments will be available on NRC's Web site ( *http://www.nrc.gov* ) and at the NRC Public Document Room, 11555 Rockville Pike, Rockville, MD 20852-2738, telephone

(800)397-4209, on or about November 15, 2007. Minutes of the meeting will be available on or about September 17, 2007. Dated at Rockville, Maryland, this 26th day of July 2007. For the Nuclear Regulatory Commission. Andrew L. Bates, Advisory Committee Management Officer. [FR Doc. E7-14884 Filed 7-31-07; 8:45 am] BILLING CODE 7590-01-P NUCLEAR REGULATORY COMMISSION Regulatory Guide: Issuance, Availability AGENCY: Nuclear Regulatory Commission. ACTION: Regulatory Guide: Issuance, Availability. FOR FURTHER INFORMATION CONTACT: John N. Ridgely, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, telephone

(301)415-6555 or e-mail to *JNR@nrc.gov* . SUPPLEMENTARY INFORMATION: The U.S. Nuclear Regulatory Commission

(NRC)has issued for public comment a draft guide in the agency's Regulatory Guide series. This series has been developed to describe and make available to the public such information as methods that are acceptable to the NRC staff for implementing specific parts of the NRC's regulations, techniques that the staff uses in evaluating specific problems or postulated accidents, and data that the staff needs in its review of applications for permits and licenses. The interim revised Regulatory Guide

(RG)4.15, entitled “Quality Assurance for Radiological Monitoring Programs (Inception Through Normal Operations to License Termination)—Effluent Streams and the Environment,” was issued with a temporary identification as Draft Regulatory Guide DG-4010 for public comments on November 2, 2006. Public comments were received, and the NRC staff appropriately revised the Draft Regulatory Guide DG-4010. RG 4.15, Revision 2, was issued in the **Federal Register** , 72 FR 15173 on March 30, 2007, for interim use and for public comments to a wider audience. The second public comment period closed on May 29, 2007, and no comments have been received. RG 4.15, Revision 2, is no longer considered “for trial use” but is considered “for final use” without change to the information in the guide. Electronic copies of Regulatory Guide 4.15 are available through the NRC's public Web site under Regulatory Guides in the Regulatory Guides document collection of the NRC's Electronic Reading Room at *http://www.nrc.gov/reading-rm/doc-collections/* . In addition, regulatory guides are available for inspection at the NRC's Public Document Room (PDR), which is located at 11555 Rockville Pike, Rockville, Maryland. The PDR's mailing address is USNRC PDR, Washington, DC 20555-0001. The PDR can also be reached by telephone at

(301)415-4737 or

(800)397-4209, by fax at

(301)415-3548, and by e-mail to *PDR@nrc.gov* . Regulatory guides are not copyrighted, and NRC approval is not required to reproduce them. (5 U.S.C. 552(a)) Dated at Rockville, Maryland, this 25th day of July, 2007. For the U.S. Nuclear Regulatory Commission. Brian W. Sheron, Director, Office of Nuclear Regulatory Research. [FR Doc. E7-14863 Filed 7-31-07; 8:45 am] BILLING CODE 7590-01-P POSTAL REGULATORY COMMISSION International Mail Briefing AGENCY: Postal Regulatory Commission. ACTION: Notice of briefing. SUMMARY: Representatives of U.S. regulators and the private sector will present a briefing on Wednesday, August 1, 2007, beginning at 11:30 a.m., in the Postal Regulatory Commission's main conference room. The briefing will address issues raised by the sale of financial services by international postal operators. DATES: August 1, 2007. ADDRESSES: Postal Regulatory Commission, 901 New York Avenue, NW., Suite 200, Washington, DC 20268-0001. FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel, Postal Regulatory Commission, 202-789-6820 and *stephen.sharfman@prc.gov.* Garry J. Sikora, Acting Secretary. [FR Doc. 07-3761 Filed 7-31-07; 8:45 am]

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