United States v. Howen, 1:21-cv-00106-DAD-SAB

CourtUnited States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
PartiesUNITED STATES OF AMERICA, Plaintiff, v. LAWRENCE A. HOWEN, et al., Defendants.
Docket Number1:21-cv-00106-DAD-SAB
Decision Date01 April 2022

UNITED STATES OF AMERICA, Plaintiff,
v.

LAWRENCE A. HOWEN, et al., Defendants.

No. 1:21-cv-00106-DAD-SAB

United States District Court, E.D. California

April 1, 2022


ORDER GRANTING DEFENDANTS' MOTION TO STAY (Doc. No. 18)

Before the court is defendants Lawrence A. Howen's and Nor-Cal Pharmacies, Inc. d/b/a Lockeford Drug's motion to stay these proceedings, which was filed on December 30, 2021. (Doc. No. 18.) Defendants' motion was taken under submission to be decided on the papers. (Doc. No. 19.) The government opposed defendants' motion on February 1, 2022 (Doc. No. 20), and the defendants filed their reply brief on February 8, 2022. (Doc. No. 21.) For the reasons discussed below, the court will grant defendants motion and stay the proceedings in this action.

BACKGROUND

On January 26, 2021, the government initiated a civil enforcement action against the defendants-a pharmacist and his pharmacy-for violations of the Comprehensive Drug Abuse Prevention and Control Act of 1970 (“Controlled Substances Act” or “CSA”), 21 U.S.C. §§ 801 et seq. (Doc. No. 1.) The government seeks civil penalties from defendants for alleged violations of the CSA's implementing regulations and an order permanently enjoining defendants from

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dispensing controlled substances. (Id. at ¶¶ 114-127.) Specifically, the complaint's four counts are for: (1) failure to exercise corresponding responsibility in violation of 21 C.F.R. § 1306.04(a); (2) failure to adhere to the usual course of professional practice in violation of 21 C.F.R. § 1306.06; (3) failure to maintain required records; and (4) a claim seeking injunctive relief under 21 U.S.C. § 843(f).

The statutory and regulatory framework relied on by the government provides as follows: 21 U.S.C. § 842(a)(1) makes it unlawful for any person “to distribute or dispense a controlled substance in violation of [21 U.S.C. § 829].” Id. In turn, § 829 generally provides that controlled substances that are deemed prescription drugs may not be dispensed without a written prescription. See 21 U.S.C. § 829. The more specific rules that govern the issuing and filling of prescriptions under § 829 are set forth in regulations 21 C.F.R. §§ 1306.01-1306.27. See 21 C.F.R. §§ 1306.01. The government's first two counts allege violations under two of these implementing regulations. (Doc. No. 1 at ¶¶ 115, 119.)

The government's first count relies on 21 C.F.R. § 1306.04, which provides, in part:

A prescription for a controlled substance to be effective must be issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice. The responsibility for the proper prescribing and dispensing of controlled substances is upon the prescribing practitioner, but a corresponding responsibility rests with the pharmacist who fills the prescription. An order purporting to be a prescription issued not in the usual course of professional treatment or in legitimate and authorized research is not a prescription within the meaning and intent of section 309 of the Act (21 U.S.C. 829) and the person knowingly filling such a purported prescription, as well as the person issuing it, shall be subject to the penalties provided for violations of the provisions of law relating to controlled substances

21 C.F.R. § 1306.04(a). In other words, the regulation provides that an “effective” prescription is one “issued for a legitimate medical purpose” by a prescriber “acting in the usual course of his professional practice.” Id. A prescriber is responsible for properly prescribing and dispensing of “effective” prescriptions, but pharmacists also have a “corresponding responsibility” when filling those prescriptions. Id. More specifically, a pharmacist must not “knowingly” fill prescriptions that purport to be a prescription that was not issued “in the usual course of professional treatment.” Id. In the government's complaint, the first count alleges that defendants violated

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this regulation by “knowingly dispensing controlled substances pursuant to prescriptions that were either not issued in the usual course of professional treatment, not issued for a legitimate medical purpose, or both.” (Doc. No. 1 at ¶ 115.)

The second count of the government's complaint relies on 21 C.F.R. § 1306.06, which provides, in part: “A prescription for a controlled substance may only be filled by a pharmacist, acting in the usual course of his professional practice . . ..” Id. As with prescribers in the first sentence of § 1306.04(a), § 1306.06 requires that a pharmacist must act within “the usual course of his professional practice” when filling prescriptions. Id. In the government's complaint, the second count alleges that defendants “fail[ed] to adhere to the usual course of the professional practice of pharmacy in filling prescriptions for controlled substances.” (Doc. No. 1 at ¶ 119.)

On March 12, 2021, defendants filed a motion to dismiss the government's complaint for failure to state a claim. (Doc. No. 7.) The government opposed the motion (Doc. No. 12) and defendants replied. (Doc. No. 13.)

On November 5, 2021, the Supreme Court granted certiorari in a pair of consolidated criminal cases involving both 21 U.S.C. § 841(a)(1) and 21 C.F.R. § 1306.04(a), including the proper construction of the phrase “the usual course of professional practice.”[1] See Kahn v. United States, 142 S.Ct. 457 (2021); Ruan v. United States, 142 S.Ct. 457 (2021). Oral argument before the Supreme Court was held in those cases on March 1, 2022. The questions before the Supreme Court in Ruan and Kahn are summarized, in part, as follows: (1) whether a physician accused of prescribing controlled substances acting outside the “usual course of professional practice” may be convicted for violating 21 U.S.C. § 841(a)(1) without regard to whether, in good faith, he or she “reasonably believed” or “subjectively intended” that the prescriptions fall within that course of professional practice; and (2) whether the phrases “usual course of professional practice” and “issued for a legitimate medical purpose” in the first sentence of 21 C.F.R. §§ 1306.04(a) should be read in the conjunctive or disjunctive. See Brief for Petitioner at i, Ruan v. United States, No.

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20-1410 (U.S. filed Dec. 20, 2021), 2021 WL 6138172 at *i; Brief for Petitioner at i, Kahn v. United States, No. 21-5261 (U.S. filed Dec. 20, 2021), 2021 WL 6118301 at *i.

On December 30, 2021, defendants filed a motion to stay the proceedings in this case pending the Supreme Court's rulings in Ruan and Kahn, which defendants contend “could significantly affect” the resolution of the first two counts of the government's complaint. (Doc. No. 18 at 3.) The government opposed the motion on February 1, 2022, based upon its belief that the Supreme Court will address only “the mens rea the government must establish to secure the [criminal] conviction of a licensed medical practitioner, ” in deciding Ruan and Kahn, as well as for other reasons. (Doc. No. 20 at 2.) Defendants filed their reply brief on February 8, 2022. (Doc. No. 21.)

LEGAL STANDARD

“[T]he power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants.” Landis v. N. Am. Co., 299 U.S. 248, 254 (1936); accord Stone v. INS, 514 U.S. 386, 411 (1995) (Breyer, J., dissenting) (“[W]e have long recognized that courts have inherent power to stay proceedings and ‘to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants.'”) (quoting Landis, 299 U.S. at 254). Deciding whether to grant a stay pending the outcome of other proceedings “calls for the exercise of judgment, which must weigh competing interests and maintain an even balance.” Landis, 299 U.S. at 254-55. The party seeking such a stay must “make out a clear case of hardship or inequity in being required to go forward, if there is even a fair possibility that the stay for which he prays will work damage to some one [sic] else.” Id. at 255.

In considering whether to grant a stay, this court must weigh several factors, including “[1] the possible damage which may result from the granting of a stay, [2] the hardship or inequity which a party may suffer in being required to go forward, and [3] the orderly course of justice measured in terms of the simplifying or complicating of issues, proof, and questions of law which could be expected to result from a stay.” CMAX, Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962) (citing Landis, 299 U.S. at 254-55). A stay may be granted regardless of whether the

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separate proceedings are “judicial, administrative, or...

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