River Forest Pharmacy, Inc. v. Drug Enforcement Administration
| Decision Date | 12 August 1974 |
| Docket Number | No. 73-1899,73-1899 |
| Parties | RIVER FOREST PHARMACY, INC., Petitioner, v. DRUG ENFORCEMENT ADMINISTRATION, Respondent. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Gerald M. Werksman, Chicago, Ill., for petitioner.
Allyn Myle Carnman, Chief Counsel Drug Enfc. Admin., Henry E. Petersen, Asst. Atty. Gen., Allan P. Mackinnon, Atty., U.S. Dept. of Justice, Washington, D.C., James R. Thompson, U.S. Atty., Chicago, Ill., for respondent.
Before CUMMINGS, PELL and SPRECHER, Circuit Judges.
This petition for review questions the propriety of an order of the federal Drug Enforcement Administration which increased the sanction recommended by an administrative law judge (law judge) from a six-month suspension of petitioner pharmacy's Certificate of Registration to a two-year suspension. The order assertedly is 'arbitrary, capricious, (and) an abuse of discretion,' 5 U.S.C. 706(2)(A). 1
River Forest Pharmacy, Inc., is wholly owned by Norman Tankel, a pharmacist who operates the drugstore with the assistance of his family. In January 1973, Tankel pleaded guilty to four counts of distributing controlled substances in violation of 21 U.S.C. 841(a), a felony. The charges arose out of two sales of secobarbital and two sales of codeine cough syrup to a man who frequented the River Forest Pharmacy and ran errands for Tankel. Tankel received three years' probation.
In April 1973, on the basis of Tankel's guilty pleas, the Acting Administrator of the Bureau of Narcotics and Dangerous Drugs (the BNDD was a predecessor of the Drug Enforcement Administration) issued an order to show cause why the pharmacy's Certificate of Registration should not be revoked. Pending disposition of the matter, he ordered an immediate suspension of the Registration. 2
At a hearing before the law judge, a compliance investigator for the BNDD testified, as did Tankel. The investigator stated that he had conducted an audit after Tankel's arrest, the audit consisting of an inventory of the controlled substances in the pharmacy and an examination of the records kept by Tankel.
Tankel, age 46, whose father had been a pharmacist, has worked in drugstores all his life. He is present in the store every day of the week it is open except one, when another pharmacist is there. He realized that his records were inadequate but explained this as the result of the long hours he works, although he also admitted to being a poor record-keeper. He blamed some of the discrepancies on the fact that when prescriptions were telephoned to him, he neglected to follow up and secure the physicians' written prescription forms. He attributed this omission to forgetfulness and the pressure of business. His failure to keep proper records in the past was also due to ignorance and unfamiliarity with the regulations. Tankel had not made any extra profit on the sales which had resulted in the prosecution. He submitted four letters attesting to his good character.
On the basis of the testimony of these two witnesses and documentary evidence, the law judge made findings of fact and conclusions of law. He recommended that the pharmacy's Certificate of Registration be suspended for six months. Such a measure, he suggested, would be sufficiently severe to serve both as a deterrent to others and as an extremely costly lesson to Tankel as to the seriousness of his actions and to remind him of his bookkeeping duties. The judge also noted that the probationary period imposed by the federal court in the section 841(a) prosecution would deter Tankel from repeating his mistakes.
The Acting Administrator accepted the findings of the administrative law judge but rejected his recommended sanction.
'In short, due to (1) the seriousness of the nature of Mr. Tankel's conviction for the unlawful distribution of controlled substances, (2) the Respondent's inability to comply with certain recordkeeping, report-making, order form, and prescription requirements of the Controlled Substances Act and implementing Administrative Regulations, and (3) the obvious misconstruction of the requirements of section 304 (21 U.S.C. 824) of the Controlled Substances Act, by the . . . Judge; and after reviewing (the record, including the findings of fact and conclusions of law proposed by counsel for the Government) . . ., the Administrator hereby adopts the recommended decision . . ., provided the suspension of the subject Certificate of Registration be for a period of two years . . ..' 38 Fed.Reg. 27420.
Counsel, in behalf of the pharmacy, asserts that there is an inadequate statement of reasons for overruling the recommendation of the law judge and that this inadequacy is tantamount to arbitrary and capricious action on the Administrator's part. In particular, petitioner complains that the increased sanction rests on a misinterpretation of the law judge's discussion.
This claim is twofold: (1) the Administrator was mistaken in saying that, in evaluating the evidence, the law judge used as his standard of review a requirement of knowledge and intent; and (2) the Administrator incorrectly concluded that the law judge used the standard announced in section 304 (21 U.S.C. 824(d)), that of 'imminent danger to the public health or safety,' in deciding the ultimate issue of suspension or revocation, which standard, under section 824(d), is a guideline only for immediate pendente lite suspension.
It appears to us that a fair reading of the law judge's statements challenged by the Administrator would indicate that the law judge was merely citing absence of knowledge, intent, and imminent danger as factors supportive of a minimal suspension. At least, we will assume so arguendo. It does not follow, however, that the agency action therefore 'lack(ed) a stated rational basis' and must be overturned.
It is evident from the first two reasons given by the Acting Administrator and his citation of the Government's proposed findings of fact and conclusions of law that he viewed petitioner's violations of the drug laws as substantial and not 'merely technical.' The Government's proposed findings and conclusions set out the legislative history of the Controlled Substances Act. The materials reveal that Congress and the President were concerned, in part, with ensuring the establishment of safeguards by pharmacists, among others, to protect against the diversion of dangerous drugs into illicit channels. Accurate record-keeping was deemed one of the essential safeguards. 3
Although the law judge and not the Administrator was in the best position to evaluate Tankel's credibility and demeanor, those factors are irrelevant to an assessment of the seriousness of petitioner's violations and of the sanction most appropriate for the promotion of agency policy regarding them. In a case analogous to the present one, the...
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