In re Morgan

Citation742 A.2d 101,144 N.H. 44
Decision Date21 July 1999
Docket NumberNo. 97–522.,97–522.
CourtSupreme Court of New Hampshire
Parties Appeal of William H. MORGAN, R.PH. (New Hampshire Board of Pharmacy).

William R. Loftus, P.C., of Lebanon (William R. Loftus on the brief and orally), for the petitioner.

Philip T. McLaughlin, attorney general (Douglas N. Jones, assistant attorney general, on the brief and orally), for the State, as amicus curiae.


The petitioner, William H. Morgan, R.Ph., appeals a disciplinary order of the New Hampshire Board of Pharmacy (board) imposing a fine and prohibiting him from serving as a pharmacist-in-charge. See RSA 318:29, II(c), (d) (1995). On appeal, he alleges a myriad of legal and constitutional errors. We affirm.

The petitioner is a licensed New Hampshire pharmacist. In 1991, he purchased a pharmacy in Littleton and became the designated pharmacist-in-charge pursuant to RSA 318:38, I (1995). In July 1995, Peter Grasso, the board's chief compliance inspector, visited the pharmacy in the course of an investigation unrelated to the petitioner. During his visit, Grasso observed that a number of the pharmacy's records were inaccurate and disorganized and subsequently recommended an accountability audit. Investigators conducted an audit in October 1995. Based on the audit, Grasso recommended that the board initiate disciplinary proceedings against the petitioner.

The board commenced proceedings against the petitioner for engaging in repeated negligent misconduct, see RSA 318:29, II(c), or willful and repeated misconduct, see RSA 318:29, II(g). The board specifically alleged ten counts of failing to maintain accurate and complete controlled drug records, four counts of dispensing controlled drugs in unlawful quantities, and one count of dispensing incorrect medication. The board also questioned the petitioner's competence both as a pharmacist-in-charge and as a pharmacist under RSA 318:29, II(d). After a hearing in September 1996, the board found that the evidence sustained all of the charges and that the petitioner had demonstrated a lack of professional competence. Accordingly, in December 1996, the board suspended his license for twenty-four months, revoked his ability to serve as pharmacist-in-charge for the same period, imposed a $5,000 administrative fine, and ordered him to complete the New Hampshire pharmacy jurisprudence examination.

The petitioner moved for rehearing, which the board granted in January 1997, vacating its December decision and order. The board issued a new decision and order based on the existing record in April 1997. It found that the evidence sustained the charges related to recordkeeping and data entry, but was insufficient to prove willful misconduct in the prescription of controlled substances. The board restricted the petitioner's pharmacist license to preclude him from serving as pharmacist-in-charge indefinitely and imposed a $1,000 fine.

I. Inspection Regulations

We first address the petitioner's contention that the statutes governing the board's authority and procedure to inspect pharmacies are impermissibly vague because they do not adequately notify licensees of the standard for evaluating compliance with the law.

Although the petitioner cited the State and Federal Constitutions below, he failed to invoke specifically a provision of the State Constitution in his brief. Because he did not unambiguously and specifically raise the vagueness issue grounded in the due process provision of the New Hampshire Constitution, we address only his federal claim. See State v. Dellorfano, 128 N.H. 628, 632–33, 517 A.2d 1163, 1166 (1986).

Under federal law, the degree of vagueness constitutionally tolerated depends in part upon the nature of the regulation. Village of Hoffman Estates v. Flipside, Hoffman Estates, 455 U.S. 489, 498, 102 S.Ct. 1186, 71 L.Ed.2d 362 (1982). Statutes with criminal or quasi-criminal penalties are reviewed under a more stringent standard than those with civil penalties. Id. at 498–99, 102 S.Ct. 1186. We will assume for the purposes of this appeal that the relevant statutes here are at least quasi-criminal, cf. In re Ruffalo , 390 U.S. 544, 551, 88 S.Ct. 1222, 20 L.Ed.2d 117 (1968) (attorney disbarment proceeding is quasi-criminal), and thus the more stringent standard applies. A statute is impermissibly vague if it does not define an offense "with sufficient definiteness that ordinary people can understand what conduct is prohibited and in a manner that does not encourage arbitrary and discriminatory enforcement." United States v. Clinical Leasing Service, Inc., 925 F.2d 120, 122 (5th Cir.1991) (quotation omitted).

Chapter 318 requires, inter alia, that licensed pharmacies and pharmacists-in-charge comply "with all local, state, and federal pharmacy and drug laws." RSA 318:1, X (1995); see RSA 318:38. Upon a reasonable basis, RSA 318:30, III, "[t]he board may investigate possible misconduct by licensees ... and any other matters governed by the provisions of [RSA chapter 318] and RSA 318–B." RSA 318:30, I (1995). Charged with the duty to enforce the statute, the board is authorized to enter pharmacies to investigate possible violations. See RSA 318:8 (Supp.1998). Similarly, RSA 318–B:25 (Supp.1998) charges, inter alia, pharmacy board officials with the responsibility to enforce RSA chapter 318–B and authorizes on-site inspections to ensure compliance. Chapter 318–B governs the manufacture, possession, control, sale, purchase, prescription, administration, and transportation of controlled substances. See RSA 318–B:2 (1995). The language of chapters 318 and 318–B clearly notifies licensees that they have a duty to comply with all federal, State, and local pharmacy and drug laws and authorizes board inspections to enforce that duty.

The petitioner argues that since perfect compliance with the laws is impossible, express standards are necessary to inform licensees what degree of noncompliance will subject them to penalties under RSA chapters 318 and 318–B. We disagree. RSA chapters 318 and 318–B impose on licensees, whether pharmacists or pharmacies, an unequivocal duty to comply with pharmacy and drug law. Cf. Federal Crop Ins. Corp. v. Merrill, 332 U.S. 380, 384–85, 68 S.Ct. 1, 92 L.Ed. 10 (1947). Implicitly, therefore, any noncompliance with applicable law will potentially subject a licensee to investigation and prosecution.

It is because perfect compliance is rarely possible, as the board investigators conceded, that decisions to investigate and prosecute are committed to the sound discretion of the agency. See Lewis v. United States, 70 F.3d 597, 601 (Fed.Cir.1995). By virtue of its specialized knowledge and authority, the agency "alone is empowered to develop that enforcement policy best calculated to achieve the ends contemplated by [the legislature] and to allocate its available funds and personnel in such a way as to execute its policy efficiently and economically." Moog Industries, Inc. v. F.T.C., 355 U.S. 411, 413, 78 S.Ct. 377, 2 L.Ed.2d 370 (1958) (upholding agency decision to prosecute firm but not its competitors for violating antitrust law). Here, board inspectors testified that various factors informed the agency's decision whether to prosecute, including frequency and gravity of violations and efforts by the licensee to improve compliance. In such cases, we defer to the board's policy.

The petitioner argues that under Appeal of Global Moving & Storage of N.H., Inc., 122 N.H. 784, 451 A.2d 167 (1982), a party is entitled to rely on a long-standing administrative practice, namely, the board's alleged practice of excusing minor violations. Global Moving, 122 N.H. at 788, 451 A.2d at 170. In Global Moving , agency officials disclosed an agency practice to the parties and advised them to rely on it, whereupon this court held that reliance was reasonable. Id. at 788, 451 A.2d at 170. Here, the board noted that even if the violations could be considered "technical," "taken as a whole, and in light of [the petitioner's] failure to implement systematic procedures reasonably designed to prevent or correct the occurrence of such errors, they become evidence of a systematic failure by [the petitioner] which is neither trivial nor normative." There is no evidence in the record, nor does the petitioner assert any, that the board affirmatively disclosed to licensees that it had a policy of excusing violations of the nature and number involved in this case. Rather, the board expressly noted otherwise.

II. Illegal Search

The petitioner next argues that the October 1995 audit constituted an illegal administrative search under the Federal and State Constitutions. See U.S. CONST. amend. IV ; N.H. CONST. pt. I, art. 19. Because the Federal Constitution provides no greater protection in this area, see State v. Turmelle, 132 N.H. 148, 153, 562 A.2d 196, 198 (1989), we need not undertake a separate federal analysis. We will address the State constitutional claim and cite to federal law only as an aid in our analysis. See State v. Ball, 124 N.H. 226, 231, 471 A.2d 347, 351 (1983).

As a preliminary matter, we reject the petitioner's contention that the absence of promulgated administrative rules governing inspections invalidates the audit. He argues that the inspectors followed procedures contained in an audit form, handbook, and lawbook that were not properly enacted as rules. See RSA 541–A:22, I. The audit form is prepared for inspectors and instructs them to perform specific tasks during the course of an audit. Nothing on the form indicates a change in private rights or rules binding on the public contrary to existing laws or regulations. We conclude that the form is not subject to the statutory requirements for the promulgation of agency rules. See RSA 541–A:1, XV (1997). Likewise, evidence indicates that the inspector's handbook was an internal procedural manual, applicable only to agency employees, and thus not subject to statutory promulgation. See id. The record does not contain...

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