Bd. of Pharmacy v. Rules Review Com'n, No. COA04-929.

• Docket Nº: No. COA04-929.
• Citation: 620 S.E.2d 893
• Case Date: November 01, 2005
• Court: United States State Supreme Court of North Carolina

620 S.E.2d 893 NORTH CAROLINA BOARD OF PHARMACY, Plaintiff,
v.
The RULES REVIEW COMMISSION, et al., Defendant. No. COA04-929. Court of Appeals of North Carolina. November 1, 2005.

Page 894

Appeal by plaintiff from orders entered 6 February 2004 and 5 April 2004 by Judge Evelyn W. Hill in Wake County Superior Court. Heard in the Court of Appeals 19 April 2005.

Bailey & Dixon, L.L.P., by Carson Carmichael, III, M. Denise Stanford, and Warren T. Savage, Raleigh, for plaintiff-appellant.

McMillan, Smith & Plyler, by William W. Plyler and Stephen T. Smith, Raleigh, for defendant-appellee.

Attorney General Roy Cooper, by Solicitor General Christopher G. Browning, Jr., and Special Deputy Attorney General Gary R. Govert, for defendant-intervenor-appellee.

Kennedy Covington Lobdell & Hickman, L.L.P., by Stanford D. Baird, William G. Scoggin, Ann M. Anderson, and Daniel J. Palmieri, for North Carolina Citizens for Business & Industry, North Carolina Home Builders Association, North Carolina Pork Council, Inc., North Carolina Retail Merchants Association, North Carolina Association of Realtors, Inc., and North Carolina Forestry Association, Raleigh, amici curiae.

Southern Environmental Law Center, by Donnell Van Noppen, III and Amy E. Pickle, for North Carolina Coastal Federation, North Carolina Shellfish Growers Association, Environmental Defense, and North Carolina Trout Unlimited, Chapel Hill, amici curiae.

Broughton Wilkins Sugg & Thompson, P.L.L.C., by Benjamin E. Thompson, III, for North Carolina Retail Merchants Association, Raleigh, amici curiae.

BRYANT, Judge.

The North Carolina Board of Pharmacy (plaintiff — Board of Pharmacy) appeals from two orders: (1) an order entered 6 February 2004, affirming the Rules Review Commission's¹ (defendant — RRC) objection to adopting

Page 895

the proposed 21 NCAC 46.2506 (Rule .2506)² and denying plaintiff's claims seeking validation of Rule .2506; and (2) an order entered 5 April 2004, denying plaintiff's Motion to Alter or Amend Judgment.

On 15 June 1998, plaintiff published Notice of Rule-Making Proceedings in the North Carolina Register giving notice that it was considering adopting rules addressing pharmacist working hours. On 14 August 1998, plaintiff published proposed Rule.2506 in the North Carolina Register and scheduled a public hearing. Following the hearing, plaintiff adopted the final language and submitted proposed Rule .2506 to RRC for consideration at its December 1998 meeting.

On 17 December 1998, the RRC objected to proposed Rule .2506 because it found that plaintiff lacked statutory authorization to enact this rule³. Plaintiff responded that it would not change proposed Rule .2506, and at its February 1999 meeting, the RRC decided not to remove its objection and returned proposed Rule .2506 to the Board of Pharmacy.

On 22 March 1999, plaintiff filed a Petition for Declaratory Ruling with the RRC, pursuant to section 150B-4 of the North Carolina General Statutes, seeking a declaration as to the validity of proposed Rule .2506. The RRC failed to issue any ruling or response to the Board of Pharmacy's Petition for Declaratory Ruling within sixty days, thereby resulting in a denial of the petition.

On 18 June 1999, plaintiff filed a complaint against the RRC and its members in their official capacities seeking a declaratory judgment that the RRC's actions were unconstitutional and that plaintiff had statutory authority to enact proposed Rule.2506. Also, plaintiff sought injunctive relief requiring the RRC to remove its objection and allow enactment of proposed Rule .2506. Plaintiff appeals.

Plaintiff's issues on appeal are whether the trial court erred: (1) by concluding plaintiff lacked the statutory authority to adopt proposed Rule .2506; and (2) by refusing to rule on its constitutional challenge to the authority of the RRC to veto the implementation of agency rules. We conclude the trial court did not err and affirm the judgment of the trial court.

Standard of Review

N.C. Gen.Stat. § 150B-1 et seq. governs both superior court and appellate court review of administrative agency decisions. CVS Pharm., Inc. v. N.C. Bd. of Pharm., 162 N.C.App. 495, 498-99, 591 S.E.2d 567, 569 (2004). Our Supreme Court has recently reiterated the standard of judicial review of final agency decisions:

On judicial review of an administrative agency's final decision, the substantive nature of each assignment of error dictates the standard of review. Under the APA, an agency's final decision may be reversed or modified only if the reviewing court determines that the petitioner's substantial rights may have been prejudiced because the agency's findings, inferences, conclusions, or decisions are:

(1) In violation of constitutional provisions;

(2) In excess of the statutory authority or jurisdiction of the agency;

(3) Made upon unlawful procedure;

(4) Affected by other error of law;

Page 896

(5) Unsupported by substantial evidence admissible . . . in view of the entire record as submitted; or

(6) Arbitrary or capricious.

N.C. Dep't of Env't & Natural Res. v. Carroll, 358 N.C. 649, 658-59, 599 S.E.2d 888, 894 (2004) (citations omitted). "Questions of law receive de novo review," whereas fact-intensive issues "such as sufficiency of the evidence to support [an agency's] decision are reviewed under the whole-record test." Id. Thus where a party alleges that an agency's decision is based upon an error of law, is in excess of the agency's statutory authority, was made upon unlawful procedure, or is in violation of constitutional provisions, pursuant to N.C. Gen.Stat. § 150B-51(b)(1)-(4), the court must undertake de novo review. Id. "Under the de novo standard of review, the trial court `consider[s] the matter anew [ ] and freely substitutes its own judgment for the agency's." Id. at 660, 599 S.E.2d at 895.

I

Plaintiff first alleges the trial court erred by concluding plaintiff lacked the statutory authority to adopt proposed Rule .2506. We disagree.

In examining whether an agency erred in interpreting a statute it administers, an appellate court employs a de novo review. County of Durham v. North Carolina Dep't of Envtl. & Natural Resources, 131 N.C.App. 395, 396, 507 S.E.2d 310, 311 (1998) (citation omitted). Legislative intent controls the meaning of statutes. Francine Delany New Sch. for Children, Inc. v. Asheville City Bd. of Educ., 150 N.C.App. 338, 345, 563 S.E.2d 92, 97 (2002) (citation omitted). "To determine legislative intent, a court must analyze the statute as a whole, considering the chosen words themselves, the spirit of the act, and the objectives the statute seeks to accomplish." Brown v. Flowe, 349 N.C. 520, 522, 507 S.E.2d 894, 895 (1998). When interpreting a statute, the court first looks to the statute's plain meaning. Frye Reg'l Med. Ctr., Inc. v. Hunt, 350 N.C. 39, 510 S.E.2d 159 (1999).

Plaintiff, N.C. Board of Pharmacy, is the occupational licensing board for North Carolina pharmacists and the executive branch agency responsible for the enforcement of the North Carolina Pharmacy Practice Act. N.C. Gen.Stat. § 90-85.2 et seq. (2003). The General Assembly created the Board of Pharmacy for a defined purpose and conferred upon it specific duties:

Creation. — The responsibility for enforcing the provisions of this Article and the laws pertaining to the distribution and use of drugs is vested in the Board. The Board shall adopt reasonable rules for the performance of its duties. The Board shall have all of the duties, powers and authorities specifically granted by and necessary for the enforcement of this Article, as well as any other duties, powers and authorities that may be granted from time to time by other appropriate statutes.

N.C. Gen.Stat. § 90-85.6(a) (2003). Proposed Rule .2506 states:

A permit holder shall not require a pharmacist to work longer than 12 continuous hours per work day. A pharmacist working longer than six continuous hours per work day shall be allowed during that time period to take a 30 minute meal break and one additional 15 minute break.

Plaintiff argues it has the duty to regulate pharmacies, and, therefore, has the authority to adopt proposed Rule .2506. Plaintiff cites its statutory rule making authority under N.C.G.S. §§ 90-85.6, 90-85.21 and 90-85.32. As the trial court concluded, and upon our review of these statutes, any regulation of pharmacies does not extend to regulating working hours as set out in proposed Rule .2506. According to N.C.G.S. § 90-85.6(a), the Board shall have "all of the duties, powers and...