FARMACY, LLC v. KIRKPATRICK
2017 OK 37
| Okla. | 2017Background
- Farmacy, LLC is a licensed wholesaler of veterinary prescription drugs under the Oklahoma Pharmacy Board; it registered with the Oklahoma Board of Veterinary Medical Examiners (Vet Board) as required.
- Vet Board sent a letter demanding Farmacy produce business records, alleging Farmacy sold/resold prescription drugs before registration and opening an investigation under the Veterinary Practice Act.
- Farmacy filed a petition for declaratory ruling; Vet Board found Farmacy had registered but still ordered production and inspection of records.
- Pharmacy Board inspected Farmacy and found compliance; Vet Board nonetheless sought inspection (only one in-person attempt occurred outside Farmacy’s business hours).
- Vet Board held an administrative hearing, fined Farmacy $25,000 for failing to allow timely inspection and for not cooperating; Farmacy sued in district court seeking relief that Vet Board exceeded its authority.
- The trial court enjoined the Vet Board; the Oklahoma Supreme Court affirmed, holding Vet Board lacked authority to investigate and penalize Pharmacy Board licensees though it could inspect certain records during regular business hours.
Issues
| Issue | Plaintiff's Argument (Farmacy) | Defendant's Argument (Vet Board) | Held |
|---|---|---|---|
| Whether Vet Board has authority to investigate and sanction a wholesaler licensed by the Pharmacy Board | Vet Board lacks statutory authority over Pharmacy-licensed wholesalers; only Pharmacy Board may investigate/discipline them | Vet Board claims power under Vet Act rules (Inspection/Registration Rules) to demand records and sanction noncompliance | Vet Board may inspect relevant records during regular business hours, but lacks authority to investigate/penalize Pharmacy Board licensees; Pharmacy Board has sole regulatory/disciplinary authority |
| Whether Vet Board’s demand for records and $25,000 fine was lawful | Demand and fine exceeded Vet Board’s authority; inspection attempts were not done during business hours; Pharmacy Board already inspected | Vet Board relied on its rules and investigatory powers to compel production and sanction noncompliance | Fine and administrative enforcement against Farmacy were improper; writ of prohibition enjoining Vet Board was affirmed |
| Whether Farmacy was required to exhaust administrative remedies before seeking court relief | No—Farmacy challenged Vet Board’s authority to act at all, so exhaustion was not required | Vet Board contended Farmacy should exhaust remedies | Court held exhaustion not required when agency’s power to act at all is challenged |
| Proper mechanism for obtaining records if wholesaler refuses inspection | Vet Board could have inspected during business hours or subpoenaed records/used court enforcement | Vet Board argued its rules allowed inspection and sanctions for noncompliance | Court emphasized inspection during business hours or subpoena/court enforcement; Vet Board could not unilaterally fine beyond its statutory scope |
Key Cases Cited
- Marley v. Cannon, 618 P.2d 401 (Okla. 1980) (agencies may only exercise powers granted by statute; implied powers limited)
- Waste Connections, Inc. v. Oklahoma Dep’t of Environmental Quality, 61 P.3d 219 (Okla. 2002) (ordinary rule requiring exhaustion of administrative remedies)
- World Publ’g Co. v. Miller, 32 P.3d 829 (Okla. 2001) (statutory interpretation requires construing provisions together to ascertain legislative intent)
- McNeill v. City of Tulsa, 953 P.2d 329 (Okla. 1998) (judicial interpretation to reconcile inconsistent statutory provisions)
- State ex rel. Dep’t of Transp. v. Little, 100 P.3d 707 (Okla. 2004) (statutory interpretation is a question of law reviewed de novo)
- City of Tulsa v. State ex rel. Public Employees Relations Bd., 967 P.2d 1214 (Okla. 1998) (appellate review of administrative record uses same standards as trial court)
- Pentagon Academy, Inc. v. Indep. Sch. Dist. No. 1 of Tulsa County, 82 P.3d 587 (Okla. 2003) (legislative intent and plain language govern statutory interpretation)
- Johnson v. Ward, 541 P.2d 182 (Okla. 1975) (injunctive relief reviewed for abuse of discretion)
- Bd. of Regents v. NCAA, 561 P.2d 499 (Okla. 1977) (equitable actions considered on all evidence on appeal)