[Federal Register: December 2, 2004 (Volume 69, Number 231)]
[Notices]
[Page 70148-70153]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02de04-70]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
[Docket No. 2002N-0291]
Baldev Raj Bhutani; Denial of Hearing; Final Debarment Order
AGENCY: Food and Drug Administration, HHS.
ACTION: Notice.
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SUMMARY: The Food and Drug Administration (FDA) is denying Baldev Raj
Bhutani's request for a hearing and is issuing a final order under the
Federal Food, Drug, and Cosmetic Act (the act) permanently debarring
Baldev Raj Bhutani from providing services in any capacity to a person
that has an approved or pending drug product application. FDA bases
this order on a finding that Mr. Bhutani was convicted of a felony
under Federal law for conduct related to the regulation of a drug
product under the act. Mr. Bhutani has failed to file with the agency
information and analyses sufficient to create a basis for a hearing
concerning this action.
DATES: This order is effective December 2, 2004.
ADDRESSES: Submit applications for termination of debarment to the
Division of Dockets Management (HFA-305), Food and Drug Administration,
5630 Fishers Lane, rm. 1061, Rockville, MD 20852.
FOR FURTHER INFORMATION CONTACT: S. Mitchell Weitzman, Center for Drug
Evaluation and Research (HFD-7), Food and Drug Administration, 5600
Fishers Lane, Rockville, MD 20857, 301-594-2041.
SUPPLEMENTARY INFORMATION:
I. Background
On February 12, 1996, Mr. Bhutani, former President and Treasurer
of Alra Laboratories, Inc. (Alra), was found
[[Page 70149]]
guilty of one count of conspiracy, a Federal felony offense under 18
U.S.C. 371, and six other counts, also Federal felonies, related to
violations under sections 301(a), (e), and (k) and 303 of the act (21
U.S.C. 331(a), (e), and (k) and 333(a)(2)). A new trial was ordered by
the U.S. District Court for the Northern District of Illinois-Eastern
Division on December 17, 1997. On April 28, 1999, the U.S. Court of
Appeals for the Seventh Circuit reversed the District Court's ruling
that Mr. Bhutani was entitled to a new trial and reinstated his
convictions. On October 12, 1999, Mr. Bhutani pled guilty to one count
of wire fraud, a Federal felony under 18 U.S.C. 1343. On February 15,
2000, Mr. Bhutani was adjudged guilty of all of these offenses and
sentenced by the U.S. District Court for the Northern District of
Illinois-Eastern Division. The U.S. Court of Appeals for the Seventh
Circuit affirmed the District Court's denial of a motion for a new
trial on September 12, 2001.
The basis for these convictions were Mr. Bhutani's violations of
various sections of the act involving the drug products LACTULOSE Syrup
and K+10 (potassium chloride extended-release tablets). Specifically,
Mr. Bhutani, the President and Treasurer of Alra, was convicted of the
following:
Conspiracy (in violation of 18 U.S.C. 371) to commit the
following offenses against the United States: (1) Manufacturing and
introducing adulterated and misbranded generic drug products into
interstate commerce (in violation of 21 U.S.C. 331(a)); (2) failing to
establish and maintain records as required under the act (in violation
of 21 U.S.C. 331(e)); (3) making false statements to FDA (in violation
of 18 U.S.C. 1001); (4) obstructing the administration of law in
proceedings pending before FDA (in violation of 18 U.S.C. 1505); and
(5) obstructing proceedings before a Federal grand jury (in violation
of 18 U.S.C. 1503).
Adulterating the drug product LACTULOSE Syrup, United
States Pharmacopeia (USP), lot 52-230-P, in violation of 21 U.S.C.
331(k), by including decomposed LACTULOSE raw material in the finished
drug product, and by deviating from the approved manufacturing
procedures by adding an undocumented substance, sodium hydroxide, to
this drug product in an unapproved manner.
Failing to establish and maintain records as required
under the act (in violation of 21 U.S.C. 331(e)), specifically failing
to establish and maintain accurate drug manufacturing batch production
records for the drug product LACTULOSE Syrup, USP, lot 52-230-P, in
that he failed to document the unauthorized addition of sodium
hydroxide more than 2 years after the original manufacture of this lot.
Introducing into interstate commerce, in violation of 21
U.S.C. 331(a), the drug product LACTULOSE Syrup, USP, lot 52-230-P,
which (1) was not manufactured in accordance with current good
manufacturing practice regulations and (2) contained an undocumented
substance, sodium hydroxide.
Adulterating the drug product LACTULOSE Syrup, USP, lot
92-558-P, by violating current good manufacturing practice regulations
and by preparing and holding the drug product under unsanitary
conditions whereby it may have been contaminated with filth (21 U.S.C.
331(k)). Specifically, Mr. Bhutani received the drug product's active
raw material, LACTULOSE concentrate, in punctured drums and then
directed Alra employees to inject hot glue into the punctures to plug
the leaks, and to wrap self-adhesive duct tape over the punctures, and
thereafter used this contaminated raw material in the manufacture of a
finished drug product.
Introducing into interstate commerce the drug product
LACTULOSE, lot 92-558-P, which was adulterated in that it was not
manufactured in accordance with current good manufacturing practice
regulations, and it was prepared and held under unsanitary conditions
whereby it may have been contaminated with filth, in violation of 21
U.S.C. 331(a). Alra then used this contaminated raw material in the
manufacture of a finished drug product and shipped it in interstate
commerce to customers.
Adulterating the drug product K+10 by violating current
good manufacturing practice regulations under 21 U.S.C. 331(k), by
contaminating this drug product with metal shavings from a stainless
steel pipe, and by preparing and holding the drug product under
unsanitary conditions whereby it may have been contaminated with filth
and rendered injurious to health. Specifically, Mr. Bhutani directed
employees to make tablets from the drug product when he knew the
granulation powder contained metal fragments from a stainless steel
pipe.
As a result of Mr. Bhutani's convictions and because he was
convicted of felonies that were clearly related to the regulation of a
drug product under the act, FDA served him by certified letter on
February 6, 2003, a proposal to permanently debar him from providing
services in any capacity to a person that has an approved or pending
drug product application. The proposal also offered Mr. Bhutani an
opportunity for a hearing on the proposal. FDA based the debarment
proposal on a finding that Mr. Bhutani was convicted of a felony under
Federal law for conduct relating to the regulation of Alra's drug
products.
The certified letter informed Mr. Bhutani that his request for a
hearing could not rest upon mere allegations or denials, but must
present specific facts showing that there was a genuine and substantial
issue of fact requiring a hearing. The letter also informed Mr. Bhutani
that the only material issue of fact was whether he was convicted as
alleged in the letter. Finally, the letter informed Mr. Bhutani that if
it conclusively appeared from the face of the information and factual
analyses in his request for a hearing that there was no genuine and
substantial issue of fact that precluded the order of debarment, FDA
would enter summary judgment against him and deny his request for a
hearing.
In a letter dated January 30, 2003, \1\ Mr. Bhutani requested a
hearing on the proposal and attached supporting materials. In his
request for a hearing, Mr. Bhutani acknowledges his convictions under
Federal law as alleged by FDA. However, he disputes many of the facts
and judicial decisions that formed the basis for his convictions.
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\1\ Mr. Bhutani's response pre-dated his actual receipt of the
certified letter. This was because service was initially attempted
at his home instead of at the prison at which he was incarcerated.
We presume that Mr. Bhutani was informed of this attempted service
and preemptively submitted his request for a hearing. A second
attempt at service at the prison facility at which he is
incarcerated was successful. In any event, the delivery dates do not
alter the nature of Mr. Bhutani's request for a hearing or our
application of summary judgment in this matter.
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We reviewed these materials, as well as supplementary submissions
from Mr. Bhutani dated February 25, 2003, March 17, 2003, February 17,
2004, and November 12, 2004, and find that they do not create a basis
for a hearing because hearings will be granted only if there is a
genuine and substantial issue of fact. Hearings will be granted neither
on issues of policy or law or on mere allegations, denials, or general
descriptions of positions and contentions, nor on data and information
insufficient to justify the factual determination urged. (See 21 CFR
12.24(b).)
The Associate Commissioner for Regulatory Affairs has considered
Mr. Bhutani's arguments and concludes that they are unpersuasive and
fail to raise
[[Page 70150]]
a genuine and substantial issue of fact requiring a hearing.
II. Legal Arguments Raised by Mr. Bhutani
Mr. Bhutani raised a number of legal arguments in support of his
hearing request. These legal arguments are not relevant to the decision
to grant a hearing because Mr. Bhutani has not raised a genuine and
substantial issue of fact. A hearing will not be granted on issues of
law. See 21 CFR 12.24(b)(1). Mr. Bhutani's legal arguments are
discussed in the following paragraphs.
A. Materiality as an Element of ``Intent to Defraud''
Mr. Bhutani contends that ``materiality'' as an element of ``intent
to defraud'' was erroneously not given as a jury instruction, citing
U.S. v. Neder, 527 U.S. 1 (1999). Neder held that when Congress used
the term ``to defraud'' in the mail and wire fraud statutes, Congress
incorporated the common law requirement of materiality as an element of
the offense.
Mr. Bhutani maintains that the violations cited by the proposal to
debar are not material and that there is no evidence that the acts
underlying the violations affected the quality, strength, purity, or
potency of the drug products under his control.
The act requires FDA to mandatorily debar an individual who has
been convicted of certain Federal felonies. Thus, the only relevant
factual issue here is whether Mr. Bhutani was, in fact, convicted of a
Federal felony for conduct related to the regulation of a drug product,
and not whether the acts underlying the violations are material.
Accordingly, Mr. Bhutani's argument is without merit.
B. Ex Post Facto
Mr. Bhutani maintains that in 1988, section 301(e) of the act did
not specifically require batch documentation, as it does now, and
therefore ex post facto principles apply. An ex post facto law is one
that reaches back to punish acts that occurred before enactment of the
law or that adds a new punishment to one that was in effect when the
crime was committed. Ex Parte Garland, 4 Wall 333, 337, 18L. Ed 366
(1866); Collins v. Youngblood, 497 U.S. 37 (1990).
Mr. Bhutani's assertion regarding section 301(e) relates to the
facts and findings underlying his conviction. These facts and findings
are not relevant to this debarment proceeding. As stated previously in
this document, the only relevant consideration under section 306(a)(2)
of the act (21 U.S.C. 335a(a)(2)) is whether Mr. Bhutani was convicted
of a felony under Federal law for conduct related to the regulation of
a drug product under the act. Therefore, Mr. Bhutani's argument
regarding section 301(e) and the Ex Post Facto Clause in connection
with this debarment proceeding is without merit.
Mr. Bhutani also suggests that, in general, the Ex Post Facto
Clause of the U.S. Constitution prohibits application of section
306(a)(2) of the act (21 U.S.C. 335a(a)(2)) to him because this section
was not in effect at the time of Mr. Bhutani's criminal conduct.
With the enactment of the Generic Drug Enforcement Act (GDEA) on
May 13, 1992, Congress amended the act to include section 306(a)(2) of
the act. Mr. Bhutani's implication that application of the mandatory
debarment provisions of the act is prohibited by the Ex Post Facto
Clause is unpersuasive. Because the intent behind debarment under
section 306(a)(2) of the act is remedial rather than punitive, this
section does not violate the Ex Post Facto Clause. The congressional
intent with respect to actions under section 306(a)(2) of the act is
clearly remedial. Congress created the GDEA in response to findings of
fraud and corruption in the generic drug industry. Both the language of
the GDEA itself and its legislative history reveal that the purpose of
the debarment provisions set forth in the GDEA is ``to restore and
ensure the integrity of the ANDA [abbreviated new drug application]
approval process and to protect the public health.'' (See section 1,
Public Law 102-282, the Generic Drug Enforcement Act of 1992.) This is
a remedial rather than punitive goal. In Bae v. Shalala, 44 F. 3d 489
(7th Cir. 1995), the Seventh Circuit upheld FDA's debarment under the
GDEA of the former president of a generic drug manufacturing firm,
based on his antecedent conviction for providing an ``unlawful
gratuity'' to an FDA official. Although Bae argued that his debarment
was ``retroactive punishment'' in violation of the Ex Post Facto Clause
of the U.S. Constitution, the Seventh Circuit found that Bae's
debarment was remedial, not punitive, and therefore did not violate the
Ex Post Facto Clause. (Bae, 44 F. 3d at 493, 495-96). The Seventh
Circuit recognized that, to achieve its remedial goal of restoring
consumer confidence in the generic drug industry, Congress
appropriately determined that it could prohibit felons such as Bae from
future activity in the industry. (Id. at 496.) (See also DiCola v. FDA,
77 F. 3d 504 (D.C. Cir. 1996 (debarment of a convicted felon did not
violate Ex Post Facto Clause); Manocchio v. Kusserow, 961 F. 2d 1539,
1542 (11th Cir. 1992) (exclusion of physician from participation in
Medicare programs because of criminal conviction is remedial, not
punitive and therefore did not violate the Ex Post Facto Clause).)
The Supreme Court has long held that statutes that deny future
privileges to convicted offenders because of their previous criminal
activities to insure against corruption in specified areas do not
impose penalties for past conduct and, therefore, do not violate the ex
post facto prohibitions. (See, e.g., Hawker v. New York, 170 U.S. 189,
190 (1898) (physician barred from practicing medicine for a prior
felony conviction); De Veau v. Braisted, 363 U.S. 144 (1960) (convicted
felon's exclusion from employment as officer of waterfront union is not
a violation of the Ex Post Facto Clause).) In De Veau, the court upheld
a law that prohibited a convicted felon from employment as an officer
in a waterfront union. The purpose of the law was to remedy the past
corruption and to insure against future corruption in the waterfront
unions. The court in De Veau, 363 U.S. at 160, stated:
The question in each case where unpleasant consequences are
brought to bear upon an individual for prior conduct, is whether the
legislative aim was to punish that individual for past activity, or
whether the restriction of the individual comes about as a relevant
incident to a regulation of a present situation, such as the proper
qualifications for a profession * * *.
As in De Veau, the legislative purpose of section 306(a)(2) of the
act is to ensure that fraud and corruption are eliminated from the drug
industry. The restrictions placed on individuals convicted of a felony
under Federal law are not intended as punishment but are ``incident to
a regulation of a present situation'' (De Veau, 363 U.S. at 160) and
are necessary to remedy the past fraud and corruption in the industry.
Because the intent of the GDEA is remedial rather than punitive, Mr.
Bhutani's argument that the GDEA violates the Ex Post Facto Clause must
fail.
C. Scope of Debarment Authority
Mr. Bhutani asserts that the proposal to debar him and the
debarment provisions themselves (section 306(a)(2)(B) of the act) are
too broad and not specific, so he is entitled to a hearing. This
argument is without merit.
Neither the proposal to debar nor the act's debarment provisions,
on which the proposal to debar was based, are broad or unspecific. The
debarment proposal set forth expressly the conduct on which the
proposal is based, the findings of FDA, the agency's proposed
[[Page 70151]]
action, and the procedure for requesting a hearing. Section
306(a)(2)(B) of the act clearly mandates the debarment of an individual
who has been convicted of a Federal felony for conduct relating to the
regulation of any drug product. The act defines the conduct and felony
conviction that lead to debarment. The period of debarment is also in
section 306(c)(2) of the act, which states that the debarment is
permanent.
In fact, the debarment provisions are narrowly drawn to accomplish
the legitimate government purposes of ensuring the integrity of the
drug regulatory process and protecting the public health. The debarment
provisions further the compelling governmental interest of
``restor[ing] consumer confidence in generic drugs by eradicating the
widespread corruption in the generic drug approval process.'' (Bae v.
Shalala, 44 F. 3d 489, 493 (7th Cir. 1995).)
D. Double Jeopardy
Mr. Bhutani asserts that as he has already been convicted and
sentenced for his actions, further punishment in the form of a
permanent debarment violates the Double Jeopardy Clause of the Fifth
Amendment to the U.S. Constitution. The Double Jeopardy Clause states
that no person shall ``be subject for the same offense to be twice put
in jeopardy of life or limb.'' Mr. Bhutani relies on U.S. v. Halper,
490 U.S. 435 (1989), which held that a civil sanction can constitute a
multiple punishment of the sort prohibited by the Double Jeopardy
Clause, to argue that permanent debarment is not rationally related to
any remedial purpose and is disproportionate to damages resulting from
his violative acts.
Mr. Bhutani's arguments are unpersuasive. First, ``jeopardy''
cannot attach because the effect of section 306(a)(2) of the act is
remedial, not punitive. As previously stated, the legislative goal of
this section of the act is to restore and ensure the integrity of the
drug approval process and to protect the public health by eradicating
fraud and corruption from the drug industry. This is plainly a remedial
rather than punitive goal.
Second, the Supreme Court in Hudson v. United States, 522 U.S. 93
(1997), in large part disavowed the method of analysis used in Halper
to determine whether a sanction violates the Double Jeopardy Clause.
The Court in Hudson stated that the Double Jeopardy Clause protects
only against the imposition of multiple criminal punishments for the
same offense in successive proceedings. (Hudson, 522 U.S. at 98-99). It
does not prohibit the imposition of any additional sanction that could,
``in common parlance,'' be described as punishment. (Id.) (Internal
quotation marks and citations omitted).
The Court added that whether a particular punishment is considered
criminal or civil is first a matter of statutory construction. (Id.)
That is, a court first must ask whether the legislature, ``in
establishing the penalizing mechanism, indicated either expressly or
impliedly a preference for one label or the other.'' (Id. at 99
(quoting United States v. Ward, 448 U.S. 242, 248 (1980)).) Moreover,
where the legislature has indicated an intention to establish a civil
penalty, a court must inquire further whether the statutory scheme is
``so punitive either in purpose or effect'' as to ``transform what was
clearly intended as a civil remedy into a criminal penalty.'' (Id. at
99 (quoting Rex Trailer Co. v.United States, 350 U.S. 148, 154
(1956)).)
The debarment of Mr. Bhutani is not a criminal penalty under
Hudson. In enacting the GDEA, Congress clearly intended that debarment
serve as a civil penalty. In Hudson, the Court found ``it significant
that the authority to issue debarment orders is conferred [by statute]
upon the `appropriate Federal banking agencies','' holding ``[t]hat
such [debarment] authority was conferred upon administrative agencies
is prima facie evidence that Congress intended to provide for a civil
sanction.'' (Id. at 103 (citations omitted).)
The GDEA explicitly provides FDA with the authority to permanently
debar individuals convicted of certain felonies, such as Mr. Bhutani,
from ``providing services in any capacity to a person that has an
approved or pending drug product application'' (section 306(a)(2) of
the act). Thus, under Hudson, the terms of the GDEA are prima facie
evidence that Congress intended the debarment provisions to be civil in
nature.
Under the second prong of Hudson, the debarment authorized by the
GDEA is not so punitive either in purpose or effect as to transform
this civil remedy into a criminal penalty. In Hudson, the Court
considered whether a permanent debarment sanction prohibiting
participation in any banking activities had such a punitive purpose or
effect. The Court concluded that there was no evidence to establish
that the debarment sanction at issue was ``so punitive in form and
effect as to render [it] criminal despite Congress' intent to the
contrary.'' (Hudson v. United States, 522 U.S. at 104 (quoting United
States v. Ursery, 518 U.S. 267, 290 (1996)).) The Court in Hudson
relied on the analysis of Kennedy v. Mendoza-Martinez, 372 U.S. 144,
168-169 (1963), in reaching this holding.
The Hudson court further noted that debarment proceedings have not
historically been viewed as punishment. (Hudson, 552 U.S. at 104). The
Court found that ``the [debarment] sanctions imposed do not involve an
`affirmative disability or restraint, ' as that term is normally
understood.'' (Id. (quoting Flemming v. Nestor, 363 U.S. 603, 617
(1960)).) The Court also found that the debarment sanction in the
banking statute at issue in the Hudson case does not ``come into play
`only ' on a finding of scienter,'' because willfulness is not a
prerequisite to the imposition of the debarment sanction. (Id. (quoting
Kennedy, 372 U.S. at 169).) Likewise, the GDEA does not require a
finding of willfulness as a prerequisite to imposing debarment. In
addition, the Court explained that the fact that the conduct for which
the debarment is imposed may also be criminal is insufficient to render
the debarment sanctions criminally punitive. (Id.) Finally, and
significantly, the Court explained that the general deterrence of the
conduct at issue resulting from an individual debarment is insufficient
to render the debarment criminal. (Id.) These factors apply as much to
debarment under the GDEA.
Furthermore, the GDEA's permanent prohibition on services in any
capacity to a person with an approved or pending drug product
application is not excessive in relation to the statute's remedial
purpose. The Supreme Court has upheld similar statutes which, for
remedial purposes, impose permanent prohibitions. (See Hudson v.United
States, 522 U.S. 93 (1997); Hawker v. New York, 170 U.S. 189, 190
(1898); De Veau v. Braisted, 363 U.S. 144 (1960).)
The preclusion of Mr. Bhutani from providing any type of service to
holders of pending or approved drug product applications is not
excessive in relation to the remedial goals of the GDEA. The D.C.
Circuit has held that the GDEA's prohibition on services in any
capacity serves the statute's remedial purpose. (FDA v. DiCola, 77 F.
3d 504 (D.C. Cir. 1996).) Congress prohibited all services to avoid the
serious administrative difficulties involved in distinguishing between
those positions clearly related to drug regulation and those not
clearly related. (Id. at 507; see also Siegel v. Lyng, 851 F. 2d 412,
416 (D.C. Cir. 1988).) Furthermore, the GDEA's prohibition ensures that
the purposes underlying the debarment provisions are not circumvented
or undermined. (DiCola, 77 F. 3d at 507; see also Farley and Calfee,
Inc. v. USDA, 941 F. 2d 964, 968 (9th Cir. 1991).) Finally, as
[[Page 70152]]
previously noted, the Supreme Court in Hudson upheld a similar statute
that, for remedial purposes, imposes a prohibition on participation in
any banking activity. (See also DiCola, 77 F. 3d at 506-507 (debarment
of a convicted felon does not violate the Double Jeopardy Clause);
Manocchio v. Kusserow, 961 F. 2d 1539, 1542 (11th Cir. 1992) (exclusion
of a physician from the Medicaid program because of a criminal
conviction does not violate the Double Jeopardy Clause).)
Under Hudson, debarment under the GDEA is not so punitive either in
purpose or effect as to render the penalty criminal. Thus, Mr.
Bhutani's argument that debarment under the GDEA violates the Double
Jeopardy Clause is unpersuasive.
E. Waiver of Further Remedial, Civil, or Criminal Actions
Mr. Bhutani maintains that FDA is estopped from seeking to debar
him because the agency waived additional remedial, civil, or criminal
actions against him by entering into ``agreements'' with him concerning
his cooperation in bringing Alra's operations in compliance with FDA
regulations. Mr. Bhutani also asserts that the proposal to debar is
punitive rather than remedial. These arguments are also unpersuasive.
As discussed in section II.D of this document, a debarment is a
remedial, not punitive, action. Furthermore, Mr. Bhutani's argument
that FDA is estopped from pursuing further administrative action by
virtue of prior ``agreements'' is unpersuasive. Mr. Bhutani cites no
legal authority, and we are unaware of any such authority, that would
bar FDA from pursuing this appropriate remedial action as mandated by
the GDEA.
F. ``Clean Hands'' Doctrine
Mr. Bhutani maintains that he and Alra entered into two agreements
(a consent agreement and a voluntary agreement) with FDA that he and
Alra complied with and that FDA was satisfied with. He asserts that
under Congressional pressure, FDA initiated a seizure action and a
criminal proceeding against Alra. Mr. Bhutani contends that FDA has
acted in bad faith and, under the ``clean hands'' doctrine, should not
be allowed to seek additional remedies and relief. This argument is
also without merit.
Under the ``clean hands'' doctrine, a party seeking a judgment is
not entitled to relief in equity if the person has done anything unfair
or illegal in relation to the subject of the lawsuit. Precision
Instrument Mfg. Co. v. Automotive Maintenance Machinery Co., 324 U.S.
806, 814 (1945). FDA has not acted in bad faith with respect to any
agreements with Mr. Bhutani or Alra. Furthermore, FDA is not seeking
any judgment or relief in equity against Mr. Bhutani. FDA is applying
to Mr. Bhutani the statutory requirement regarding mandatory debarment
of individuals convicted of a felony under Federal law for conduct
related to the regulation of a drug product under the act. Therefore,
Mr. Bhutani's argument regarding the ``clean hands'' doctrine is
without merit.
G. Estoppel by Laches
Mr. Bhutani maintains that FDA is estopped from taking this
regulatory action due to an ``unreasonable amount of time that has
elapsed.'' He cites Costello v. U.S., 365 U.S. 265 (1961), in support
of his contention. Costello involved an individual whose U.S.
naturalization was revoked 27 years after his application. The Costello
case is not in any way relevant or analogous to the circumstances at
issue here, but even if it were, the Court's holding that the
petitioner's rights were not violated by a 27-year delay in initiating
citizenship revocation undermines, as opposed to supports, Mr.
Bhutani's argument. The Court cited, as is the case here, the
availability of accurate records and documents attesting to the
petitioner's misdeeds (Id. at 282-283).
FDA initiated administrative action to debar Mr. Bhutani in a
timely fashion. Section 306(l)(2) of the act provides a 5-year window
from the date of conviction for the agency to initiate the debarment
process. Mr. Bhutani's conviction was reinstated on April 29, 1999. The
agency issued a proposal to debar on February 6, 2003, within the 5-
year statutory window. Therefore, Mr. Bhutani's assertion is
unpersuasive.
H. Other Arguments
Finally, Mr. Bhutani argues that FDA must consider a number of
factors in this debarment proceeding, including the nature and
seriousness of the offense; management participation in the offense;
voluntary steps taken to minimize the impact of the offense on the
public; changes in ownership, management, or operations that have
corrected the cause of the offense and decreased the likelihood of a
recurrence; evidence that current production of drugs subject to
abbreviated drug applications and all pending abbreviated drug
applications are free of fraud or material false statements; and prior
convictions. Again, the only relevant fact under section 306(a)(2) of
the act is whether Mr. Bhutani was convicted of a felony under Federal
law for conduct related to the regulation of a drug product. Therefore,
Mr. Bhutani's argument that FDA must consider other factors is without
merit.
III. Denial of Hearing
In his requests for a hearing, Mr. Bhutani does not present any
information showing there is a genuine and substantial issue of fact
requiring a hearing. Mr. Bhutani does not dispute that he pled guilty
to one count of wire fraud and that he was found guilty of seven other
counts, all felonies under Federal law. Nor does he dispute that he was
convicted of felonies that were clearly related to the regulation of a
drug product under the act. The facts underlying Mr. Bhutani's
convictions have been established by his convictions and, therefore,
are not at issue. Thus, FDA finds that Mr. Bhutani has failed to
identify any genuine and substantial issue of fact requiring a hearing.
In addition, Mr. Bhutani's legal arguments do not create a basis for a
hearing and, in any event, are unpersuasive. Accordingly, FDA denies
Mr. Bhutani's request for a hearing.
IV. Findings and Order
Therefore, the Associate Commissioner for Regulatory Affairs, under
section 306(a) of the act and under authority delegated to him, finds
that Mr. Baldev Bhutani has been convicted of a felony under Federal
law for conduct relating to the regulation of a drug product under the
act (Section 306(a)(2)(B)) of the act).
As a result of the foregoing findings, Mr. Baldev Raj Bhutani is
permanently debarred from providing services in any capacity to a
person with an approved or pending drug product application under
sections 505, 512, or 802 of the act (21 U.S.C. 355, 360b, or 382), or
under section 351 of the Public Health Service Act (42 U.S.C. 262),
effective (see DATES) (sections 306(c)(1)(B) and (c)(2)(A)(iii) and
201(dd) of the act (21 U.S.C. 321(dd))). Any person with an approved or
pending drug product application who knowingly uses the services of Mr.
Bhutani in any capacity, during his period of debarment, will be
subject to civil money penalties (section 307(a)(6) of the act (21
U.S.C. 335b(a)(6)). If Mr. Bhutani, during the period of his debarment,
provides services in any capacity to a person with an approved or
pending drug product application, he will be subject to civil money
penalties (section 307(a)(7) of the act). In addition, FDA will not
accept or review any ANDAs submitted by or with the assistance of Mr.
Bhutani during the period of his debarment.
[[Page 70153]]
We note that Mr. Bhutani has petitioned the U.S. Supreme Court for
writ of certiorari of the Seventh Circuit's decision in his case.
Should the outcome of further judicial proceeding result in Mr.
Bhutani's conviction being reversed, under section 306(d)(3)(B)(i) of
the act, the order of debarment will be withdrawn. Mr. Bhutani may file
an application to terminate his debarment, under section 306(d)(4)(A)
of the act. Any such application would be reviewed under the criteria
and processes set forth in section 306(d)(4)(C) and (d)(4)(D) of the
act. Such an application should be identified with Docket No. 2002N-
0291 and sent to the Division of Dockets Management (see ADDRESSES).
All such submissions are to be filed in four copies. The public
availability of information in these submissions is governed by 21 CFR
10.20(f). Publicly available submissions may be seen in the Division of
Dockets Management between 9 a.m. and 4 p.m., Monday through Friday.
Dated: November 24, 2004.
John M. Taylor,
Associate Commissioner for Regulatory Affairs.
[FR Doc. 04-26532 Filed 12-1-04; 8:45 am]
BILLING CODE 4160-01-S