Holiday Cvs, L.L.C. v. Holder
2012 WL 883123
D.D.C.2012Background
- CVS Pharmacy stores 219 and 5195 (Sanford, Florida) were registered to dispense Schedule II–V controlled substances and faced DEA immediate suspension orders on February 2, 2012.
- DEA investigation traced oxycodone inflows from Cardinal Health to CVS stores, with over 12.8 million dosage units sold to top customers from 2008–2011.
- DEA executed administrative warrants on October 18, 2011 and issued subpoenas on October 25, 2011, followed by interviews of CVS personnel and managers.
- CVS implemented remedial measures starting November 2011 (suspending certain prescriptions, revising dispensing guidelines, narrowing prescriber scope, engaging a consultant), reducing oxycodone dispensing by 86% since October 2011.
- Plaintiffs challenged the ISOs under the APA; the court held hearings, remanded for an administrative record, then denied a preliminary injunction on March 16, 2012.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the ISO is Arbitary and Capricious under the APA | CVS argues the ISO lacked sufficient, targeted findings. | DEA exercised proper discretion with imminent danger findings. | Yes; ISO upheld as not arbitrary or capricious. |
| Whether ISO findings satisfy the DEA regulations' notice requirements | ISOs do not provide a comprehensive, exhaustive rationale. | ISOs provide non-exhaustive, contemporaneous explanation consistent with law. | No reversible error; ISO findings deemed adequate. |
| Procedural Due Process challenge to ISO pre-deprivation action | Failure to provide pre-deprivation process violates CSA and due process. | Post-deprivation hearing available; emergency ISO permissible. | Not likely to succeed; due process arguments rejected. |
| Facial adequacy of ISOs | ISOs are facially deficient under 1301.36(e). | ISOs need not be fully comprehensive; contemporaneous explanation suffices. | Not likely to succeed; ISOs deemed facially adequate. |
Key Cases Cited
- State Farm Mut. Auto. Ins. Co. v. State Farm Mfrs. Ass’n, 463 U.S. 29 ((1983)) (arbitrary-and-capricious review requires rational connection between facts and action)
- Overton Park Express v. Volpe, 401 U.S. 402 ((1971)) (APA review based on full administrative record)
- Camp v. Pitts, 411 U.S. 138 ((1973)) (ex post supplementation of the record barred; contemporaneous explanation allowed)
- Universal City Studios, Inc. v. Reimer, 451 U.S. 390 ((1981)) (procedural due process principles in summary actions)