FARMACY, LLC v. KIRKPATRICK
394 P.3d 1256
| 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.
- The Vet Board opened an investigation after a complaint alleging Farmacy sold prescription drugs without proper prescriptions; the Vet Board demanded Farmacy produce business records.
- Farmacy submitted a petition for declaratory ruling; the Vet Board declared Farmacy properly registered but nonetheless ordered production/inspection of records and set a deadline.
- The Pharmacy Board inspected Farmacy and found compliance; Farmacy did not permit the Vet Board to inspect records outside Farmacy’s business hours and later sued seeking injunctive/declaratory relief.
- The Vet Board held an administrative hearing, found Farmacy violated its order, and assessed a $25,000 fine; the district court reversed and enjoined further Vet Board action.
- The Supreme Court of Oklahoma affirmed, holding the Vet Board lacked statutory authority to investigate and penalize a Pharmacy Board–licensed wholesaler, although it may inspect records during regular business hours to the extent necessary to verify a veterinarian-client-patient relationship (VCPR).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Vet Board may investigate and sanction a wholesaler licensed by the Pharmacy Board | Farmacy: Vet Board lacks authority over pharmacy-licensed wholesalers; only Pharmacy Board may regulate and penalize them | Vet Board: Rules enacted under 59 O.S. § 353.13(G) permit inspection and enforcement; Vet Board may investigate to protect VCPR compliance | Held: Vet Board may inspect records during regular business hours to verify VCPRs, but lacks statutory authority to investigate and punish Pharmacy Board–licensed wholesalers; Pharmacy Board has exclusive authority to enforce Pharmacy Act violations |
| Whether Farmacy had to exhaust administrative remedies before seeking judicial relief | Farmacy: No exhaustion required when challenging an agency’s authority to act at all | Vet Board: Farmacy should exhaust administrative remedies | Held: No exhaustion required because Farmacy challenged the Vet Board’s power to act under the statutory scheme |
| Whether Vet Board complied with its own inspection rules in demanding records | Farmacy: Vet Board never inspected records during Farmacy’s business hours and could have subpoenaed records | Vet Board: Made arrangements to inspect; Farmacy refused cooperation | Held: Vet Board’s only on-site attempt occurred when business was closed; inspection rights are limited to reasonable business hours and could have been enforced via subpoena |
| Whether the $25,000 fine was lawful | Farmacy: Fine unlawful because Vet Board lacked authority to sanction a Pharmacy-licensed wholesaler | Vet Board: Fine appropriate for failing to cooperate and comply with Board order | Held: Fine invalid because Vet Board exceeded its statutory authority to penalize wholesalers regulated by the Pharmacy Board |
Key Cases Cited
- Marley v. Cannon, 618 P.2d 401 (1980 OK 147) (agency powers limited to those granted by statute; only implied powers necessary to exercise express powers)
- World Publishing Co. v. Miller, 32 P.3d 829 (2001 OK 49) (statutory interpretation guided by plain language and legislative intent)
- State ex rel. Dept. of Transportation v. Little, 100 P.3d 707 (2004 OK 74) (de novo review for questions of statutory interpretation)
- Waste Connections, Inc. v. Oklahoma Dept. of Environmental Quality, 61 P.3d 219 (2002 OK 94) (general rule requiring exhaustion of administrative remedies)
- Johnson v. Ward, 541 P.2d 182 (1975 OK 129) (standard of review for injunctive relief)