Evergreen Pharmacy, Inc. v. Garland
| Docket Number | 22-cv-03912 |
| Decision Date | 11 August 2022 |
| Citation | 621 F.Supp.3d 861 |
| Parties | EVERGREEN PHARMACY, INC., Plaintiff, v. Merrick GARLAND, in his official capacity only as Attorney General, et al., Defendants. |
| Court | U.S. District Court — Northern District of Illinois |
Edward Donald Rickert, Mark W. Bina, Quarles & Brady LLP, Chicago, IL, Theresa Marie DeAngelis, Pro Hac Vice, Quarles & Brady LLP, Washington, DC, for Plaintiff.
AUSA, Ernest Yi Ling, United States Attorney's Office, Chicago, IL, for Defendants.
Plaintiff Evergreen Pharmacy, Inc. (Evergreen) filed suit against Merrick Garland in his official capacity as the Attorney General of the United States, Ann Milgram, in her official capacity as Administrator of the Drug Enforcement Administration, and the United States Drug Enforcement Administration (DEA), (collectively, Defendants), asserting several causes of action stemming from Defendants' Immediate Suspension Order (ISO) suspending Evergreen's DEA Registration. R. 1., Compl.1 Evergreen now moves the Court pursuant to 21 U.S.C. § 824(d) for an order dissolving the DEA's ISO filed against Evergreen, or, in the alternative, for a temporary restraining order (TRO) against Defendants enjoining the ISO's enforcement pending a final decision on the merits in the ongoing administrative proceedings. For the reasons stated below, the Court denies Evergreen's motion.
The Controlled Substances Act (CSA) and its implementing regulations create restrictions on the distribution of controlled substances. 21 U.S.C. §§ 801, et seq.; 21 C.F.R. §§ 1300, et seq. The CSA requires all persons who dispense controlled substances to obtain a registration from the Attorney General. See 21 U.S.C. § 822(a). The Attorney General has delegated this registration authority to the DEA. See 28 C.F.R. § 0.100.
These regulations provide that "[a] prescription for a controlled substance may only be filled by a pharmacist, acting in the usual course of his professional practice and either registered individually or employed in a registered pharmacy, a registered central fill pharmacy, or registered institutional practitioner." See 21 C.F.R. § 1306.06. In addition, the regulations provide that a pharmacist who fills a prescription for a controlled substance has a "corresponding responsibility" to ensure that the prescription was "issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice." See 21 C.F.R. § 1306.04.
The DEA "closely observes [registrants] to ensure that their operations are 'consistent with the public interest.' " Virtus Pharmaceuticals, LLC v. Garland, 2021 WL 4306165, at *2 (D.D.C. Sept. 22, 2021) (internal citations omitted). For example, in the case of registered distributors, the DEA determines whether the registrant maintains "effective control[s] against diversion of particular controlled substances." 21 U.S.C. § 823(a)(1), (b)(1). The DEA also considers whether the registrant complies with state and local laws or has any prior criminal convictions related to the possession of controlled substances. Id. § 823(a)(2)-(4), (b)(2)-(3). More generally, the CSA directs the DEA to take into account "such other factors as may be relevant to and consistent with the public health and safety." Id. § 823(a)(6), (b)(5).
The CSA provides that a registration to dispense a controlled substance may be suspended or revoked upon a finding that the registrant, inter alia, "has committed such acts as would render his registration . . . inconsistent with the public interest . . . ." See 21 U.S.C. § 824(a)(4). Before suspending a registration, the DEA must serve upon the registrant an Order to Show Cause (OSC) why the registration "should not be denied, revoked, or suspended." 21 U.S.C. § 824(c)(1)-(2). The registrant is entitled to an administrative hearing before the DEA, conducted pursuant to the Administrative Procedure Act (APA), 5 U.S.C. §§ 551-559, where the Government has the burden of proving that registration is inconsistent with the public interest. Id.; see 21 C.F.R. §§ 1301.36(d), 13.01.42, 1301.44(e). Following the hearing, the presiding DEA Administrative Law Judge (ALJ) issues a recommendation to the Administrator as to whether the respondent's registration should be revoked, and the Administrator enters the DEA's final ruling on the ALJ's recommendation. 5 U.S.C. §§ 556(c)(10), 557; 21 C.F.R. § 1301.46.
However, if a registrant poses an "imminent danger to the public health or safety," the CSA authorizes the immediate suspension of the entity's registration. 21 U.S.C. § 824(d)(1). The CSA defines "imminent danger to the public health or safety" to mean "a substantial likelihood of an immediate threat that death, serious bodily harm, or abuse of a controlled substance will occur in the absence of an immediate suspension of the registration." 21 U.S.C. § 824(d). The DEA must meet this statutory standard in order to issue an ISO and immediately suspend a registration on an ex parte basis. See 21 U.S.C. § 824(d)(1).
Evergreen is a small family-owned pharmacy which has served the community in Evergreen Park, Illinois since 2008. Compl. ¶ 15.; R. 6-2, Abdallah Aff. ¶¶ 3, 22. Since it opened, Evergreen had been registered with the DEA as a pharmacy to handle controlled substances in Schedules II through V under DEA Certificate of Registration No. FE1057822. Compl. ¶¶ 15-16. Evergreen meets with and builds personal relationships with its patients, as well as provides complimentary home delivery services. Id. ¶ 26; Abdallah Aff. ¶¶ 44, 45. Before the issuance of the ISO, approximately 88% of Evergreen's prescription volume was for non-controlled prescription medication, meaning approximately 12% of its volume was for controlled substances. Compl. ¶ 25; Abdallah Aff. ¶ 33.2
On November 18, 2020, pursuant to an administrative inspection warrant, Defendants conducted an on-site inspection of Evergreen. Compl. ¶ 38; Abdallah Aff. ¶ 10. Defendants obtained and reviewed Evergreen's records and logs of prescriptions dispensed, performed an inventory count of Evergreen's medications in stock, and also performed an inventory reconciliation (meaning Defendants compared Evergreen's records and logs of prescriptions dispensed with the inventory counts of the medications in stock). Compl. ¶ 38; Abdallah Aff. ¶ 10. Included in these logs were records of three patients of interest to the DEA: Patients 1, 2, and 3. Compl. ¶ 39; Abdallah Aff. ¶ 12. Evergreen cooperated and complied with the investigation. Compl. ¶ 40; Abdallah Aff. ¶ 11. On November 20, 2020, a DEA investigator visited Patient 2 and interviewed Patient 2's parents, confirming that the patient was not selling medication and was taking it as prescribed. Abdallah Aff. ¶ 13.
In January 2021, DEA agents interviewed Evergreen's owner and several employees about controlled substance prescriptions dispensed to Patients 1, 2, and 3. Compl. ¶ 41; Abdallah Aff. ¶ 16. Specifically, agents questioned Evergreen's owner about the high quantities of Dilaudid (used to treat pain) dispensed to Patient 2, and the drug combinations dispensed to pharmacy patients, including the controlled substances dispensed to Patients 1 and 3. Abdallah Aff. ¶¶ 16, 17; see R. 6-5, Anselmo Aff. ¶ 16. Evergreen's owner's review of pharmacy records show that he spoke to Patient 1, 2, and 3's respective physicians about their diagnoses and/or their prescriptions, and in his professional opinion, each patient had a legitimate medical need for the medications. Abdallah Aff. ¶¶ 16-17.
On May 20, 2021, DEA agents met with Evergreen's owner and provided a report of their concerns related to Evergreen's recordkeeping based on discrepancies identified through the inventory reconciliation performed by the agents. Compl. ¶ 42; Abdallah Aff. ¶ 19. Additionally, the agents had concerns about whether Evergreen was complying with its corresponding responsibility to ensure the controlled substance prescriptions were issued for a legitimate medical purpose, by prescribers who were acting in the ordinary course of medical practice. Abdallah Aff. ¶ 19. After learning of these concerns, Evergreen's owner conducted an inventory reconciliation and provided the DEA with acquisition and dispensing records. Compl ¶ 43; Abdallah Aff. ¶ 20.
On December 17, 2021, the DEA formally began requesting information from Evergreen regarding prescriptions it had filled for twelve patients, including Patients 1, 2 and 3. Compl. ¶ 44; Abdallah Aff. ¶ 21. Subpoenas were issued to Evergreen on December 17, 2021, January 21, 2022, February 14, 2022, and March 4, 2022. Compl. ¶ 44; see also Abdallah Aff. ¶ 21. In mid-April 2022, a DEA investigator notified Evergreen's counsel that he was nearing the end of his investigation and once completed he would discuss the next steps with Evergreen and its counsel. R. 6-1, TRO Memo. at 10.
On April 25, 2022, the DEA simultaneously issued the ISO and OSC to Evergreen. R. 1-1, Compl. Exh. A, ISO. The ISO suspended Evergreen's DEA registration after determining that over the course of a two-year period, Evergreen dispensed more than 175 prescriptions to Patients 1, 2, 3, which exhibited "red flags of abuse or diversion." Compl. ¶ 47; ISO at 2. The ISO included allegations regarding the pharmacy's filling of prescription to three patients. For example, with respect to Patient 1, the ISO alleges:
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