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Oak Hill Hometown Pharmacy v. Dhillon

United States District Court, S.D. West Virginia, Charleston Division

October 30, 2019

UTTAM DHILLON, et al., Respondents.



         The question before the court is whether a sufficient factual basis existed to justify the United States Drug Enforcement Administration (“DEA”) issuance of an ex parte emergency order immediately suspending the petitioner's, Oak Hill Hometown Pharmacy (“the Pharmacy”), registration to distribute controlled substances. I find that the DEA did not provide such a factual basis and therefore DISSOLVE the Order of Immediate Suspension of Registration (“ISO”).

         I. Factual Background

         The opiate crisis has had a devastating effect on West Virginia. Addiction is a “fundamental neurological disorder, ” characterized by the American Society of Addiction Medicine, as a “bio-psycho-social-spiritual illness.” Pet'r's Ex. 1-7, American Society of Addiction Medicine, National Practice Guideline, 4 (June 1, 2015) [ECF No. 12]. Because of the effect of opiate addiction on the body and brain, medical consensus recommends medication assisted treatment (“MAT”) over “abrupt cessation of opioids.” See e.g., id. at 7. Access to effective treatment is of course essential. Yet in West Virginia-as well as many other parts of the country-access is limited. Many clinics in West Virginia have reached patient capacity, forcing prospective patients seeking treatment onto long waitlists. Additionally, many West Virginian pharmacies refuse to participate in MAT therapy because of the stigma of addiction or their fear of wholesalers declining to engage in business with them. I am personally familiar with the effect of opioids on this community from my decades of work with defendants on supervised release who desperately need treatment.

         MAT therapy carries its own set of legal barriers to access. MAT therapy frequently involves the legal prescription of buprenorphine-based medications. There are two types of buprenorphine-based medications. The first type is Subutex, which is a single entity buprenorphine product (also known as a “buprenorphine-mono-product”). The second type is Suboxone, which is a combination product containing buprenorphine and naloxone. In 2002, the FDA approved both Subutex and Suboxone for treatment of Opioid Use Disorder. Buprenorphine is itself an opioid medication, susceptible to abuse and diversion. It is listed as a Schedule III controlled substance. That said, I find it important to keep in mind that Suboxone and Subutex are to be used to treat addiction.

         Given the controlled substance status, Subutex and Suboxone require registration for prescription and distribution under the Controlled Substances Act. The registration requires a distributor to monitor for suspicious orders of controlled substances, including orders of “unusual size, orders deviating substantially from a normal pattern, and orders of unusual frequency.” 21 C.F.R. § 1301.74(b). Congress vested the DEA with the power to “suspend or revoke a license on various grounds, including a finding that the registrant… has committed such acts as would render his registration under section 823 of this title inconsistent with the public interest as determined under such section.” 21 U.S.C. § 824(a)(4). Typically, before revoking a registration the DEA must issue an Order to Show Cause, describing the grounds for revocation, and conduct a hearing in accordance with the APA. § 824(c); 21 C.F.R. § 1301.37(c). Following the hearing, the presiding administrative law judge (“ALJ”) makes a recommendation to the DEA administrator, who issues a final ruling on that recommendation. Id.

         The statute also authorizes an ex parte emergency suspension procedure, which immediately suspends registration-without a pre-deprivation hearing-simultaneously with the institution of the administrative proceedings. 21 U.S.C. § 824(d)(1). To justify an ISO, the DEA administrator must show that the continued registration of the registrant poses an “imminent danger to the public health or safety.” Id. In 2016, Congress amended the statute, imposing an even higher threshold for issuing this emergency suspension procedure. See Ensuring Patient Access and Effective Drug Enforcement Act of 2016, Pub. L. No. 114-145, § 2, 130 Stat. 353 (codified as amended at 21 U.S.C. § 824(d)(2)). That amendment defined “imminent danger to the public health or safety” as requiring a showing of “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.” Id. This statutory requirement means that “apart from the onerous task of demonstrating a link between a registrant's alleged transgressions and an impending death, serious bodily harm, or abuse, the Agency now must shoulder the burden of showing that the ‘likelihood' of those evils, based on the purported transgressions, is ‘substantial.'” John J. Mulrooney, II & Katherine E. Legel, Current Navigation Points in Drug Diversion Law: Hidden Rocks in Shallow, Murky, Drug-Infested Waters, 101 Marq. L. Rev. 333, 346 (2017).

         An ISO is not a final agency order but rather an emergency suspension that remains in effect until the conclusion of the administrative proceeding, “unless sooner withdrawn by the Attorney General or dissolved by a court of competent jurisdiction.” 21 U.S.C. § 824(d). Case law has interpreted the “court[s] of competent jurisdiction” to mean the United States District Courts. See e.g., Novelty Distributors, Inc. v. Leonhart, 562 F.Supp.2d 20, 28 (D.D.C. 2008); Norman Bridge Drug Co. v. Banner, 529 F.2d 822, 823 (5th Cir. 1976). Oddly enough, the ISO is not reviewable by the administrative law tribunal. See Barry M. Schultz, M.D.; Decision and Order, 76 Fed. Reg. 78, 695 (Dec. 19, 2011). And the administrative proceeding has no effect on the ISO. See id.

         On August 6, 2019, the DEA issued an ISO of the petitioner's registration. The Pharmacy is a locally owned pharmacy in Oak Hill, West Virginia, founded in 2012. Pet'r Ex. 1-1, U.S. DOJ DEA, Order to Show Cause and Immediate Suspension of Registration, 2 (Aug. 6, 2019) [ECF No. 12]. The Pharmacy is registered with the DEA to handle controlled substances in Schedule II through V. Id. The Pharmacy's registration expires by its own terms on December 31, 2021. Id. The DEA originally served an administrative warrant against the Pharmacy on November 28, 2018, initiating an open investigation into the Pharmacy's practices. Since the suspension of its registration on August 6, 2019, the Pharmacy's business has struggled. See TRO Hr'g Tr. 48:10- 14, Oct. 24, 2019 [ECF No. 16]. The suspension affected the Pharmacy substantially because wholesalers terminated their agreements to fill the Pharmacy's medication orders due to the ISO. Pet'r Ex. 2 [ECF No. 12-2]. On October 21, 2019, the Pharmacy filed a motion for Temporary Restraining Order (“TRO”) against the ISO [ECF No. 4]. The matter is ripe for adjudication.

         The petitioner requests a dissolution of the ISO. Pet'r Mem. in Supp. of Mot. For TRO, 3 [ECF No. 4]. The enabling statute grants this court the specific power to dissolve the extraordinary action by a government agency of suspending registration without due process. See 21 U.S.C. § 824(d). Although the Pharmacy characterizes this request for dissolution as a motion for TRO under Rule 65, that rule is meant to provide temporary relief before a matter can be decided on the merits. See Fed. R. Civ. Pro. 65. Because I do not find a sufficient factual basis for the DEA's ISO, I find that it is more appropriate-given the statutory grant-to deal with this case as a motion to dissolve the ISO rather than as a TRO.

         II. Standard of Review

         Congress vests this court with the power to dissolve, not review, the ISO. See 21 U.S.C. § 824(d). The court owes deference to the DEA's findings of fact. But this court has original jurisdiction to dissolve the DEA's determination to issue an ISO based on those facts. See Norman Bridge Drug Co. v. Banner, 529 F.2d 822, 824 (5th Cir. 1976) (“[t]he plain language of this section [21 U.S.C. 824(d)] means that one faced with becoming the victim of the harsh expedient of suspension without prior notice may resort to the appropriate district court in search of appropriate relief.”).

         Neither the Supreme Court nor Fourth Circuit has addressed what standard of review to apply when reviewing an ISO. The Supreme Court has, however, explained that “de novo review [of an agency decision] is appropriate only where there are inadequate factfinding procedures in an adjudicatory proceeding, or where judicial proceedings are brought to enforce certain administrative actions.” Camp v. Pitts, 411 U.S. 138, 142 (1973), citing Citizens to Pres. Overton Park, Inc. v. Volpe, 401 U.S. 402, 415 (1971). The emergency context of issuing an ISO does not provide any factfinding procedure or due process to a registrant-except for the vehicle of challenging the decision in a U.S. District Court. Moreover, the administrative proceeding does not provide any “factfinding procedures” regarding the ex parte ISO. Due to this lack of administrative process and because of my statutory authority, I find a de novo review of the DEA's conclusions drawn from its findings of fact is appropriate.[1]

         III. The ...

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