Banks v. Board of Pharmacy

• Decision Date: 08 November 1984
• Citation: 161 Cal.App.3d 708,207 Cal.Rptr. 835
• Parties: Charles J. BANKS and Intra World Wide of America dba Intra Drug, Plaintiffs and Appellants, v. BOARD OF PHARMACY, DEPARTMENT OF CONSUMER AFFAIRS, State of California, Defendants and Respondents. Civ. B 003693.
• Court: California Court of Appeals Court of Appeals

Page 835

207 Cal.Rptr. 835

161 Cal.App.3d 708

Charles J. BANKS and Intra World Wide of America dba Intra Drug, Plaintiffs and Appellants, v. BOARD OF PHARMACY, DEPARTMENT OF CONSUMER AFFAIRS, State of California, Defendants and Respondents.

Civ. B 003693.

Court of Appeal, Second District, Division 2, California.

Nov. 8, 1984.

Errol J. Gordon, Los Angeles, for plaintiffs and appellants.

John K. Van de Kamp, Atty. Gen., Robert McKim Bell, Deputy Atty. Gen., for defendants and respondents.

ROTH, Presiding Justice.

Appellants appeal from a Superior Court judgment denying their petition for a writ of mandate against the Board of Pharmacy, a state administrative and licensing agency (the Board). We affirm.

Appellants are comprised of a pharmacist (appellant), licensed by the Board and Intra World Wide of America, a pharmacy, also Board licensed, which pharmacist operates. On June 11 and 12, 1981, two Board of Pharmacy inspectors performed an audit of appellant's supply of four dangerous drugs: Quaalude, Ritalin, Preludin and Tuinal. The inspectors discovered that the inventory on hand did not match the records for any of the four drugs. When informed of this, appellant searched for and found several mislaid and misfiled prescriptions. Even after this adjustment, there was a shortage of 1,013 Quaalude pills, 3,725 Ritalin pills, 691 Preludin pills, and an overage of 210 Tuinal capsules.

During the period covered by the audit, on September 17, 1979, someone had burglarized the pharmacy. No inventory was performed at that time to determine whether any dangerous drugs had been taken, nor was the Board notified. Title 16, California Administrative Code section 1715.6 requires a pharmacist to notify the Board of any drug loss attributable to burglary. In addition, appellant's investigation subsequent to the Board audit which included the use of polygraph tests revealed that several of his employees had been stealing the subject drugs.

On October 13, 1982, the Board filed an accusation against appellant and his pharmacy. The hearing was held on February 23 and 24, 1983, before an administrative law judge. The judge refused to admit appellant's polygraph evidence concerning the thefts. He issued his proposed decision on April 12, which the Board adopted on May 13.

The decision included the following determination of issues:

"1. Respondent [pharmacist] and Intra Drug are subject to disciplinary action under Business and Professions Code Sections 4350, 4350.5, and 4359, in that both respondents have been guilty of unprofessional conduct within the meaning of Business and Professions Code Sections 4350.5 and 4363, by reason of violations of the provisions of Section 4232 of the Business and Professions Code, as interpreted by Title 16, California Administrative Code, Section 1718, subdivision (3), and violations of the provisions of Sections 11205 and 11206 of the California Health and Safety Code and violations of the provisions of Title 211, U.S.C. Section 827, subdivision (a)(3) and Title 21, C.F.R. Section 1304.21, in that they have failed to maintain complete and accurate records of each dangerous drug and controlled substance received, sold, delivered or otherwise disposed of by reason of the facts set forth in Finding V above.

"2. It is determined that respondents have committed no active misconduct, but were negligent in their failure to insure adequate security and inventory control of the Schedule II and III drugs which are the subject of this proceeding.

"3. In considering the penalty to be imposed in this matter, consideration has been given to the facts set forth in Finding VI. [Appellant's evidence of theft.]"

The Board disciplined appellant and his pharmacy as follows:

"Pharmacist's certificate number PH 21933 and pharmacy license number ZH 15308 heretofore issued by the Board to respondents [pharmacist] and Intra World Wide Drug of America are, and each is, hereby revoked; provided, however, the orders of revocation are stayed and respondents are placed on a three (3) year period of probation commencing on the effective date of this order. The terms and conditions of probation are as follows:

"A. Respondents shall obey all federal, state and local laws as relate to the exercise of the privileges and duties of their licenses, and the rules of regulations of the Board;

"B. Respondents shall furnish such periodic written or oral reports as may be directed by the Board;

"C. Respondents shall submit their inventory, books and records and licensed premises to peer review, as may be determined by the Board;

"D. Respondent [pharmacist] shall take and pass such courses in continuing education as may be ordered by the Board;

"E. Respondent [pharmacist] shall supervise no interns during the probationary period, nor shall any officer or remployee [sic] of respondent Intra Drug conduct such supervision;

"F. In the event respondent [pharmacist] shall leave California to reside or to practice outside the state, respondents shall notify the Board in writing of the dates of departure and of return. Periods of residency or practice outside of California will not apply to the reduction of the probationary period as to either respondent.

"G. If respondents violate probation in any respect, the Board, after giving respondents notice and opportunity to be heard, may revoke probation and carry out the disciplinary order that was stayed. If an accusation or petition to revoke probation is filed against respondents during probation, the Board shall have continuing jurisdiction until the matter is final, and the period of probation shall be extended until the matter is final."

On June 21, 1983 appellant petitioned the Superior Court for a writ of mandate, which was denied on September 2, 1983. Appellant appeals to this court with half a dozen assignments of error.

Appellant first contends that there is insufficient evidence to support the Board's judgment. Initially, we note that appellant views the judgment as stating two bases for discipline: One, failure to maintain complete and accurate records, and two, negligence in maintaining security and inventory control. Our reading of the decision is a bit different. It makes more sense to interpret the judgment as saying that negligent maintenance of security led to the inaccurate records. In other words, the Board found that the records were inaccurate (and hence the basis for discipline) not because of active misconduct, but because of negligent failure to maintain security.

Appellant asserts that there can be no negligence in this case, because an essential element, duty, was never established. He argues that "there is simply no evidence to establish a standard in the community regarding maintaining security and inventory control over the subject controlled substances." A community custom is merely evidence of the standard of care (Gyerman v. United States Lines Co. (1972) 7 Cal.3d 488, 501-502, 102 Cal.Rptr. 795, 498 P.2d 1043); the concept has no application to this case. At bench a duty arises from the laws which appellant was found to have violated.

There is substantial evidence of negligent failure of security, in the form of the outside theft in September 1979, and the repeated thefts by employees. The former should have been reported to the board. Appellant seeks to avoid responsibility for the latter. He may not. " 'The licensee, if he elects to operate his business through employees must be responsible to the licensing authority for their conduct in the exercise of his license ...' By virtue of the ownership of a ... license such owner has a responsibility to see to it that the license is not used in violation of the law. [Citations.]" (Ford Dealers Assn. v. Department of Motor Vehicles (1982) 32 Cal.3d 347, 360, 185 Cal.Rptr. 453, 650 P.2d 328.)

Aside from the thefts, appellant admits that after the audit he discovered some misfiled prescriptions which were considered and credited in the audit.

Appellant argues that the fact that there were shortages is legally and factually insufficient to conclude that the records were inaccurate. "Shortage" to us means "fewer drugs on the shelf than are reflected in the records." "Fewer drugs on the shelf than are reflected in the records" means "inaccurate records." Thus, "shortage" means "inaccurate records."...