Farmacy, LLC v. Kirkpatrick, Case Number: 114417

Decision Date09 May 2017
Docket NumberCase Number: 114417
Parties FARMACY, LLC, Petitioner/Appellee, v. Cathy KIRKPATRICK, in Her Official Capacity as the Executive Director of the Oklahoma Veterinary Board, and the State of Oklahoma, ex rel. the Oklahoma Board of Veterinary Medical Examiners, Defendants/Appellants.
CourtOklahoma Supreme Court

Christian S. Huckaby, Hall, Estill, Hardwick, Gable, Golden & Nelson, P.C., Oklahoma City, Oklahoma, for Petitioner/Appellee.

Justin P. Grose, Charles A. Dickson, III, and James V. Barwick, Office of the Attorney General, Oklahoma City, Oklahoma, for Defendants/Appellants.

WINCHESTER, J.

FACTS AND PROCEDURAL BACKGROUND

¶ 1 Appellee, Farmacy, LLC, filed as a domestic limited liability company with the Oklahoma Secretary of State's office on September 3, 2013. On September 13, 2013, the Oklahoma State Board of Pharmacy (Pharmacy Board) issued a wholesaler license to Farmacy to allow it to conduct business as a wholesale distributor of veterinary prescription drugs. Farmacy timely registered its wholesaler license with Appellant, the Oklahoma Board of Veterinary Medical Examiners (Vet Board), as required by 59 O.S.2011, 353.13(G)(4) and OAC 775-26-1-1(g).

¶ 2 In November 2013, Farmacy received a drug order from a customer seeking medicine for his livestock operation. Farmacy explained to the customer that, pursuant to 59 O.S.2011, 353.13(G), he would need a prescription from his veterinarian in order for Farmacy to fill the order.1 The customer instructed Farmacy to contact the veterinarian directly to obtain the prescription but when Farmacy contacted the veterinarian, he refused to provide the prescription. Farmacy sent the veterinarian, via overnight mail, a copy of its duly issued wholesaler license and a formal request to provide the prescription. The veterinarian did not respond to Farmacy's request.

¶ 3 In mid-December 2013, Farmacy learned from a manufacturer with which it does business that Farmacy was under investigation by the Vet Board.2 On January 14, 2014, Farmacy received a letter from Cathy Kirkpatrick, head of the Vet Board, ordering Farmacy to produce a complete copy of all of its records from the date of its licensure by the Pharmacy Board to the Vet Board no later than January 28, 2014. The letter stated that the Vet Board had "received specific information that Farmacy, LLC purchased and resold prescription medications to the end user prior to its registration with" the Vet Board. The letter further stated that the Vet Board was "currently investigating" Farmacy under the authority of the Oklahoma Veterinary Practice Act (Vet Act), 59 O.S.2011, 698.1 -689.30, and that failure to produce the records would be sanctionable under 59. O.S. 2011, 698.14a (E)(22).

¶ 4 In response to the letter, Farmacy filed a Petition for Declaratory Ruling with the Vet Board on January 24, 2014.3 Farmacy sought rulings from the Vet Board regarding its duties and obligations to register with the Vet Board and referenced its license granted by the Pharmacy Board as well as its timely December registration with the Vet Board. On February 21, 2014, the Vet Board conducted a hearing regarding Farmacy's petition wherein the Board found that Farmacy had timely complied with the registration of its wholesaler's license and issued an order declaring such. The Vet Board Order, however, still required Farmacy to comply with the January 14, 2014, letter to produce its records and ordered Farmacy to allow inspection of the requested records by March 7, 2014.

¶ 5 The Vet Board maintains that arrangements were made with Farmacy's counsel for the Vet Board to come to Farmacy's place of business to inspect the records during business hours on March 12, 2014. These arrangements were later postponed to accommodate the schedule of Farmacy's owners' cattle operation. In the meantime, on March 14, 2014, the Pharmacy Board made a full inspection of Farmacy's facility and business records, and found Farmacy and its records to be in compliance with the Pharmacy Act. The Pharmacy Board provided the letter of compliance to the Vet Board yet the Vet Board still demanded inspection of Farmacy's records.

¶ 6 On March 17, 2014, Farmacy filed an action against the Vet Board in Latimer County claiming the Vet Board had exceeded its statutory authority with an improper investigation of Farmacy. Farmacy alleged that, as a wholesaler of veterinary prescription drugs, it was to be solely regulated by the Pharmacy Board. Farmacy sought and received an ex parte Temporary Restraining Order (TRO) prohibiting the Vet Board from further investigation of Farmacy. Farmacy voluntarily dismissed this suit on April 14, 2014, to re-file in Oklahoma County.4 The dismissal resulted in the expiration of the Temporary Restraining Order.

¶ 7 Ten days later, on April 24, 2014, the Vet Board filed an administrative proceeding against Farmacy. The Vet Board Complaint contained allegations of violations of the Vet Act and Vet Board rules by "failing to furnish the Vet Board, its staff or its agents, information requested or failure to cooperate with a lawful investigation conducted by or on behalf of the Board." The Vet Board also alleged Farmacy acted in an unprofessional manner in violation of OAC 775:10-5-30 and OAC 775:26-1-1. Farmacy denied the allegations that it had refused to produce records for inspection. The matter was set for hearing in August.

¶ 8 Prior to the August hearing, on July 3, 2014, an investigator from the Vet Board, Dale Fullerton, appeared at Farmacy's business to inspect the records. However, when Fullerton arrived, Farmacy's business was closed and he was not allowed to inspect the documents. Pursuant to the Vet Board's rules, the Vet Board's inspection of a wholesaler's records must occur during "reasonable business hours." OAC 775:26-1-1(e). This is the sole visit by the Vet Board to Farmacy's place of business to inspect the records.5

¶ 9 On August 29, 2014, the Vet Board conducted a hearing and issued a written order on September 23, 2014, finding that Farmacy "violated the Board's Order issued on February 21, 2014, by not timely allowing inspection of Farmacy's records and by failing to cooperate in the Board's investigation." The Vet Board assessed a $25,000 fine against Farmacy, payable within thirty days from receipt of the Order, as well as costs and expenses incurred by the Vet Board in the investigation and prosecution of the administrative proceeding.

¶ 10 On September 14, 2014, Farmacy filed a Petition for Declaratory Relief and Request for Injunction in the District Court of Oklahoma County. Farmacy sought a ruling that the Vet Board exceeded its authority by ordering Farmacy to produce the requested documents and subsequently fining the failure to so produce. The parties filed briefs and oral argument was heard on October 1, 2015, after which the trial court reversed the ruling of the Vet Board. The Vet Board appealed this ruling and we retained the matter.

STANDARD OF REVIEW

¶ 11 The Oklahoma Administrative Procedures Act (OAPA), 75 O.S.2011, 250 et seq ., as amended, governs our review. Under the OAPA, appellate courts apply the same review standards as the trial court to the administrative record. City of Tulsa v. State ex rel. Public Employees Relations Bd. , 1998 OK 92, ¶ 12, 967 P.2d 1214, 1219.

¶ 12 Whether to grant injunctive relief is generally within the sound discretion of the trial court and its judgment will not be disturbed on appeal unless the lower court has abused its discretion or its decision is clearly against the weight of the evidence. Johnson v. Ward , 1975 OK 129, ¶ 42, 541 P.2d 182, 188. An action for an injunction is one of equitable cognizance and this Court will consider all of the evidence on appeal. Bd. of Regents of University of Oklahoma v. National Collegiate Athletic Ass'n , 1977 OK 17, 561 P.2d 499, 502.

¶ 13 The interpretation to be given to a statute is a question of law, subject to our plenary, independent and non-deferential examination using a de novo standard of review.

State ex rel. Dept. of Transportation v. Little , 2004 OK 74, ¶ 10, 100 P.3d 707, 711. Legislative intent governs statutory interpretation and is generally ascertained from a statute's plain language. The Pentagon Academy, Inc. v. Independent Sch. Dist. No. 1 of Tulsa County, 2003 OK 98, ¶ 19, 82 P.3d 587, 591. However, where a strict, literal interpretation of the statute would lead to inconsistent or incongruent results between the enactment's different parts, judicial interpretation becomes necessary to reconcile the discord. McNeill v. City of Tulsa , 1998 OK 2, 11, 953 P.2d 329, 332. To ascertain legislative intent, we construe together the various provisions of an act, in light of their underlying general purpose and objective, not limiting our consideration to a single word or phrase. World Publishing Co. v. Miller , 2001 OK 49, 32 P.3d 829, 832 ; McNeill, supra, 1998 OK 2 at 11, 953 P.2d at 332.

DISCUSSION

¶ 14 In this matter of first impression, we must determine whether the Vet Board has authority to investigate, demand production of records and subsequently fine the failure to produce said records of a wholesaler of veterinary medicine who is licensed and regulated by the Oklahoma State Pharmacy Board. We find that while the Vet Board may have the right to inspect, in the regular course of the wholesaler's business, certain documents kept by the wholesaler pertaining to its sale and/or distribution of veterinary prescription drugs, the Pharmacy Board has the sole authority to investigate and penalize its licensee for any alleged violations of the Pharmacy Act.

I. APPLICATION OF VET BOARD RULES TO FARMACY

¶ 15 Farmacy is a licensed wholesaler6 of veterinary prescription drugs regulated by the Oklahoma State Pharmacy Board as set forth in the Oklahoma Pharmacy Act, 59 O.S.2011, 353 et seq . The Oklahoma Legislature gave the Pharmacy Board the authority to: (1) regulate the sales of drugs, medicines,...

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