Stephen McCarthy, a physician assistant, held a DEA Certificate of Registration allowing him to prescribe Schedule II through V controlled substances. However, he issued approximately seventeen prescriptions for these substances between August and November 2022 without the required written supervision agreement with a physician, as mandated by Pennsylvania law. McCarthy claimed he believed a previous agreement with a supervising physician was still active, but the DEA presented evidence that the agreement had been terminated in 2019 and that McCarthy had not listed the physician on his prescriptions. Following a hearing, an Administrative Law Judge recommended revoking McCarthy's registration, a decision adopted by the DEA Administrator. McCarthy petitioned the Third Circuit, arguing the ALJ was unconstitutionally insulated from removal and that the revocation was arbitrary and capricious.
The court addressed two primary challenges. First, regarding the removal protections, the court acknowledged that the multi-level protection for DEA ALJs might be unconstitutional under recent precedents like Free Enterprise Fund. However, the court ruled that McCarthy could not bring this challenge because he failed to show a causal link between the alleged constitutional infirmity and his injury. The court explained that to succeed, a litigant must demonstrate that the constitutional flaw actually caused harm, noting that McCarthy did not argue his injury would have been lessened if the ALJ had different removal protections. Second, on the arbitrary and capricious claim, the court scrutinized McCarthy's reliance on eight case summaries to argue the DEA's decision was a 'flagrant departure' from past practice. The court noted that McCarthy's counsel admitted seven summaries were inaccurate, one decision did not exist, and the summaries were generated by Artificial Intelligence without verification. Consequently, the court refused to consider this portion of the brief. The court found that the DEA's decision was supported by substantial evidence, noting that McCarthy only partially accepted responsibility for his conduct and that his belief that he was supervised was not reasonable given a lack of due diligence. The court further clarified that the DEA can revoke a registration even without proof of actual drug diversion or patient harm, and that the Administrator had considered and rejected all mitigation arguments, including the availability of lesser sanctions.
The DEA's order revoking Stephen McCarthy's Certificate of Registration stands, and any pending applications to modify or renew the registration are denied. The decision reinforces the requirement that petitioners challenging agency actions based on structural constitutional flaws must prove a direct causal link to their specific injury. It also signals that courts will not rely on legal arguments supported by unverified or AI-generated case summaries, and it affirms the DEA's broad discretion to revoke registrations for public interest violations even absent proof of actual patient harm.
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