Opinion
No. WD 62214
April 30, 2004
Appeal from the Circuit Court of Buchanan County, Missouri, Honorable Weldon C. Judah, Judge.
Daryl R. Hylton, Esq., Attorney for Appellant — Jefferson City, MO.
R. Dan Boulware, Esq., Attorney for Respondent — St. Joseph, MO.
Before Ellis, C.J., Lowenstein and Howard, JJ.
An overview of this appeal is first in order. The respondent, United Pharmacal Company of Missouri ("Pharmacal"), filed this declaratory judgment suit pursuant to Section 536.050, RSMo. 2000, against the Missouri Board of Pharmacy ("the Board") after the Board sent Pharmacal a cease-and-desist letter demanding that Pharmacal quit selling veterinary legend drugs without a pharmacy license. Pharmacal is a St. Joseph, Missouri retail store selling animal feed and other animal products. As pertinent to this case, Pharmacal sells federal "veterinary legend" drugs to owners of animals who present a veterinarian's prescription. These legend drugs are approved by the FDA for animal use where a veterinarian's prescription is presented. The trial court granted Pharmacal's motion for summary judgment, holding that the Board had misinterpreted Section 338.210(1) (set out infra, which defines the practice of pharmacy), among other statutes that the Board had charged Pharmacal with violating, and that a question-and-answer posted on the Board's website was indeed a rule, but was void because it was not promulgated in compliance with Section 536.021. The central issues of the Board's appeal are: (1) whether Pharmacal's case constituted a justiciable controversy; (2) whether the jurisdictional requirement of finality was not met because the trial court failed to consider and declare the new relevant pharmacy law adopted after the filing of this suit, but prior to judgment; and (3) whether a question-and-answer on the Board's website, which stated that veterinary legend drugs could not be sold to a consumer who had a prescription unless the seller (Pharmacal) "was licensed as a pharmacy," could be deemed an invalid attempt at rulemaking, and, therefore, properly challenged under Section 536.050.
All statutory references are to RSMo. (2000) unless indicated otherwise.
FACTS
On June 21, 2001, the Board sent Pharmacal a cease-and-desist letter. (A copy of the letter appears in the Appendix to this opinion.) The letter informed Pharmacal that the Board had concluded that Pharmacal was illegally selling federal veterinary legend drugs to consumers "without holding appropriate licensure as a pharmacy." According to that letter, pursuant to a veterinarian's order, Pharmacal sold a Board inspector 1000 tablets of Prednisone, a federal legendary drug, without having a licensed pharmacist on site. This, the letter continued, was a violation of the Pharmacy Practice Act and, in particular, of the following "laws and/or rules," Sections 338.010(1), 338.220, and 338.195. Consequently, Pharmacal was ordered "to immediately CEASE AND DESIST the unlicensed practice of pharmacy. No dispensing of prescription drugs or prescription devices directly to consumers should take place without complying with all appropriate licensure and regulatory requirements as a licensed pharmacy." (emphasis in the original) Enclosed with this letter was an application for a new permit to operate a pharmacy and an instruction packet. The letter concluded: "Please respond within ten (10) days of the date of this letter as to what corrective actions you are taking or have taken to stop your unlicensed practice of pharmacy in Missouri." No formal action was, or has been, taken by the Board against Pharmacal.
Around six months after receiving the cease-and-desist letter, Pharmacal filed this declaratory judgment suit in Buchanan County Circuit Court, where it has its registered office. The suit was brought under Section 536.050.1, a part of the Administrative Procedure Act not under the general Declaratory Judgment Act, Sections 527.010-.290. (Section 536.050, supra, allows declaratory and judgment actions "respecting the validity of rules, or of threatened applications thereof," and allows the plaintiff to file suit where it has its registered office.) The Board first moved to dismiss, and then moved for summary judgment, contending that Section 536.050 only applies to challenges to the validity or application of rules, whereas the Board's cease and desist letter only mentioned statutory violations. In its subsequent motion for summary judgment, the Board also argued that the General Assembly's amendment of Section 338.210.1, in August 2001, mooted Pharmacal's claim.
Section 536.050.1 provides:
1. The power of the courts of this state to render declaratory judgments shall extend to declaratory judgments respecting the validity of rules, or of threatened applications thereof, and such suits may be maintained against agencies whether or not the plaintiff has first requested the agency to pass upon the question presented. The venue of such suits against agencies shall, at the option of the plaintiff, be in the circuit court of Cole County, or in the county of the plaintiff's residence, or if the plaintiff is a corporation, domestic or foreign, having a registered office or business office in this state, in the county of such registered office or business office. Nothing herein contained shall be construed as a limitation on the declaratory or other relief which the courts might grant in the absence of this section.
2. Any person bringing an action under subsection 1 of this section shall not be required to exhaust any administrative remedy if the court determines that:
(1) The administrative agency has no authority to grant the relief sought or the administrative remedy is otherwise inadequate; or
(2) The only issue presented for adjudication is a constitutional issue or other question of law; or
(3) Requiring the person to exhaust any administrative remedy would result in undue prejudice because the person may suffer irreparable harm if unable to secure immediate judicial consideration of the claim. Provided, however, that the provisions of this subsection shall not apply to any matter covered by chapters 288, 302, and 303, RSMo.
HOUSE BILL 567 is set out below. The initial portion within [brackets] was the law when the FAQ was posted and when the cease and desist letter was conveyed. The portion below the brackets became law in August 2001, prior to the filing of this action.
338.210. PHARMACY DEFINED — PRACTICE OF PHARMACY TO BE CONDUCTED AT PHARMACY LOCATION — RULEMAKING AUTHORITY. — [As used in sections 338.210 to 338.300 "pharmacy" shall mean any pharmacy, drug, chemical store, or apothecary shop, conducted for the purpose of compounding, and dispensing or retailing of any drug, medicine, chemical or poison when used in the compounding of a physician's prescription.]
1. Pharmacy refers to any location where the practice of pharmacy occurs or such activities are offered or provided by a pharmacist or another acting under the supervision and authority of a pharmacist, including every premises or other place:
(1) Where the practice of pharmacy is offered or conducted;
(2) Where drugs, chemicals, medicines, prescriptions, or poisons are compounded, prepared, dispensed or sold or offered for sale at retail;
(3) Where the words "pharmacist", "apothecary", "drugstore", "drugs", and any other symbols, words or phrases of similar meaning or understanding are used in any form to advertise retail products or services;
(4) Where patient records or other information is maintained for the purpose of engaging or offering to engage in the practice of pharmacy or to comply with any relevant laws regulating the acquisition, possession, handling, transfer, sale or destruction of drugs, chemicals, medicines, prescriptions or poisons.
2. All activity or conduct involving the practice of pharmacy as it relates to an identifiable prescription or drug order shall occur at the pharmacy location where such identifiable prescription or drug order is first presented by the patient or the patient's authorized agent for preparing or dispensing, unless otherwise expressly authorized by the board.
3. The requirements set forth in subsection 2 of this section shall not be construed to bar the complete transfer of an identifiable prescription or drug order pursuant to a verbal request by or the written consent of the patient or the patient's authorized agent.
4. The board is hereby authorized to enact rules waiving the requirements of subsection 2 of this section and establishing such terms and conditions as it deems necessary, whereby any activities related to the preparation, dispensing or recording of an identifiable prescription or drug order may be shared between separately licensed facilities.
5. If a violation of this chapter or other relevant law occurs in connection with or adjunct to the preparation or dispensing of a prescription or drug order, any permit holder or pharmacist-in-charge at any facility participating in the preparation, dispensing, or distribution of a prescription or drug order may be deemed liable for such violation.
6. Nothing in this section shall be construed to supersede the provisions of section 197.100, RSMo.
* * *
HB567 also amended Section 338.220 by adding to the classes of pharmacy licenses the category of "Shared Services." MO LAWS 2001, at pp. 625-26.
In opposition to the Board's motion and in support of its separate motion for summary judgment, Pharmacal argued that it was challenging an unpromulgated rule, and not a statute. The alleged unpromulgated rule was the following question-and-answer ("FAQ 8"), which had earlier appeared (January 2001) on the Board's website in a section titled, "FREQUENTLY ASKED QUESTIONS — GENERAL PHARMACY LAW":
8. Does an entity have to be licensed as a pharmacy to sell veterinary legend drugs to the consumer/owner of the animal(s)? Yes. Veterinary legend drugs may only be sold based on the order/prescription of a veterinarian. An entity may not sell veterinary legend drugs directly to the consumer (owner of animal) based on a prescription without being licensed as a pharmacy.
FAQ 8, according to Pharmacal, was modeled on a permanent injunction against another company, Chariton Veterinary Supply, Inc. The Chariton permanent injunction, entered in a different circuit, was part of a March 2001 consent decree, which barred Chariton from practicing pharmacy as defined by Section 338.210. Before the consent decree, Pharmacal claimed the Board had a longstanding policy of allowing entities like Chariton and Pharmacal to sell federal veterinary legend drugs to consumers without having a pharmacy license. After the consent decree, Pharmacal claimed the Board, using the Chariton decree as "precedent," reversed its longstanding policy and investigated at least eleven other Missouri businesses for engaging in the formerly acceptable practice. Since FAQ 8 was, in reality, a rule, Pharmacal argued that it was subject to the notification requirements of Section 536.021. The full text of the statutory definition of a rule is set out in footnote 4, infra, but as applicable here, refers to an "agency statement of general applicability that . . . interprets or prescribes law or policy. . . ." § 536.010(4) Because the Board did not follow the strictures of Section 536.021 by, for instance, giving the Secretary of State notice of the proposed rule, see Section 536.021.1, Pharmacal claimed the Board's rule was void since it was not properly promulgated. A timeline of relevant events, beginning in 1994 and going through the date this suit was filed, appears in the Appendix.
Pharmacal argued that its suit was properly before the trial court. Pharmacal requested that the trial court should declare that the Board's new policy, as reflected in its cease-and-desist letter sent to Pharmacal, misconstrued the regulatory statutes in Chapter 338, in particular Sections 338.210 and 338.010.
The trial court granted Pharmacal's motion for summary judgment. The trial court concluded that FAQ 8 was designed to act as a rule, but because it had not been promulgated in accord with Section 536.021, it was invalid. It also held that that the Board had misconstrued Chapter 338, as allowing the Pharmacy Board to regulate drugs to be used by animals because Chapter 338 only applied to drugs to be used by "patients"; i.e., human beings. The Board filed this appeal.
STANDARD OF REVIEW
Where the only issues raised in the appeal from the grant of summary judgment in a declaratory judgment action are legal, as in this case, review is de novo. Carroll v. Mo. Bd. of Prob. Parole , 113 S.W.3d 654, 656 (Mo.App. 2003). Summary judgment is only appropriate where there is no material dispute of fact and one party is entitled to judgment as a matter of law. Harjoe v. Herz Fin. , 108 S.W.3d 653, 654 (Mo. banc 2003). In reviewing the trial court's grant of summary judgment, this court gives the non-movant, here the Board, the benefit of all reasonable inferences contained in the record. Id.
I. WAS THE FAQ A RULE?
The Board contends the FAQ was not a rule, nor intended to act as a rule, but was merely the staff's (not the Board's) attempt to answer questions "frequently asked of staff." Since the FAQ did not rise to the level of a rule, continues the Board, there was no requirement it be promulgated under the requirements or procedures prescribed in Sections 536.021 and 536.025. The Board readily admits the statutory procedures for adopting agency rules were not followed. The Board further buttresses this argument, that the website merely provided information rather than disguised rulemaking, by pointing out the Board itself did not adopt nor did it approve of the FAQ prior to it being posted. However, despite language in its brief that "[T]he FAQ does not purport to bind any individual or entity[,] the record reflects the Board believed entities had an obligation to comply with the statement in the FAQ."
Section 536.010(4), defines a rule as an agency statement of general applicability that implements, interprets, or prescribes law or policy or practice requirements of the agency. It should be noted that not every generally applicable statement or "'announcement' of intent" by a state agency is henceforth a rule. Because implicit in the definition of a rule is the requirement it must contain some declaration which, "has a potential, however slight, of impacting the substantive or procedural rights" of a member of the public. Baugus v. Dir. of Revenue , 878 S.W.2d 39, 42 (Mo. banc 1994).
536.010. Definitions
(4) "Rule" means each agency statement of general applicability that implements, interprets, or prescribes law or policy, or that describes the organization, procedure, or practice requirements of any agency. The term includes the amendment or repeal of an existing rule, but does not include;
(a) A statement concerning only the internal management of an agency and which does not substantially affect the legal rights of, or procedures available to, the public or any segment thereof;
(b) A declaratory ruling issued pursuant to section 536.050, or an interpretation issued by an agency with respect to a specific set of facts and intended to apply only to that specific set of facts;
(c) An intergovernmental, interagency, or intraagency memorandum, directive, manual or other communication which does not substantially affect the legal rights of, or procedures available to, the public or any segment thereof;
(d) A determination, decision, or order in a contested case;
(e) An opinion of the attorney general;
(f) Those portions of staff manuals, instructions or other statements issued by an agency which set forth criteria or guidelines to be used by its staff in auditing, in making inspections, in settling commercial disputes or negotiating commercial arrangements, or in the selection or handling of cases, such as operational tactics or allowable tolerances or criteria for the defense, prosecution, or settlement of cases, when the disclosure of such statements would enable law violators to avoid detection, facilitate disregard of requirements imposed by law, or give a clearly improper advantage to persons who are in an adverse position to the state;
(g) A specification of the prices to be charged for goods or services sold by an agency as distinguished from a license fee, or other fees;
(h) A statement concerning only the physical servicing, maintenance or care of publicly owned or operated facilities or property;
(i) A statement relating to the use of a particular publicly owned facility or property, the substance of which is indicated to the public by means of signs or signals;
(j) A decision by an agency not to exercise a discretionary power;
(k) A statement concerning only inmates of an institution under the control of the department of corrections and human resources or the division of youth services, students enrolled in an educational institution, or clients of a health care facility, when issued by such an agency;
(l) Statements or requirements establishing the conditions under which persons may participate in exhibitions, fairs or similar activities, managed by the state or an agency of the state;
(m) Income tax or sales forms, returns and instruction booklets prepared by the state department of revenue for distribution to taxpayers for use in preparing tax returns.
If the FAQ was indeed not a rule nor intended to act as a rule, then this action by Pharmacal for declaratory judgment pursuant to Section 536.050 did not invest the trial court with subject matter jurisdiction. Golden Rule Ins. Co. v. Mo. Dep't. of Ins. , 56 S.W.3d 471, 473-74 (Mo.App. 2001). Quoting Section 536.050, this court in Golden Rule , stated that the "validity of rules, or of threatened applications thereof," may be brought under the statute without first exhausting administrative remedies. Id. However, if the agency's policy or action was not based on a rule, then the trial court could not attain subject matter jurisdiction under this statute to grant declaratory relief. Id. at 474-75. If the FAQ was not a rule, then the matter ends and the trial court was incorrect in declaring it as such, and entertaining a suit under Section 536.050, and allowing venue to be in Buchanan County. Therefore, this court must determine whether the FAQ was a rule.
The Board, in asserting the trial court erred in declaring that the FAQ was a rule, but neither properly nor formally adopted, relies on Missouri Soybean Ass'n v. Missouri Clean Water Commission , 102 S.W.3d 10 (Mo. banc 2003), and Missouri National Education Ass'n. v. Missouri. State Board of Education , 34 S.W.3d 266 (Mo.App. 2000).
The Board's interpretation of Missouri Soybean is incorrect. Substantive rules and general policy statements do not exhaust the field of agency pronouncements — and Missouri Soybean did not hold otherwise. There are also procedural and interpretive rules. Section 536.010(4) defines "rule" as including an "agency statement of general applicability . . . that describes the procedure . . . of any agency" and "that . . . interprets . . . law[.]" Missouri caselaw has long recognized the distinction between substantive (a.k.a., legislative) and interpretive rules, see Ketring v. Sturges , 372 S.W.2d 104, 111 (Mo. 1963) (distinguishing between interpretive and legislative rules); Pollock v. Wetterau Food Distribution Group , 11 S.W.3d 754, 766 (Mo.App. 1999); State v. Polley , 2 S.W.3d 887, 890-91 (Mo.App. 1999), as has the Court of Appeals for the District of Columbia, from which Missouri Soybean extracted its definition of a substantive rule. See Kelley v. EPA , 15 F.3d 1100, 1108 (D.C. Cir. 1994); Sec'y of Labor, Mine, Safety, Health Admin. v. W. Fuels-Utah, Inc. , 900 F.2d 318, 326 n. 6 (D.C. Cir. 1990); Joseph v. U.S. Civil Serv. Comm'n , 554 F.2d 1140, 1154 n. 26 (D.C. Cir. 1977). In fact, after Missouri Soybean was handed down, the Court invalidated an interpretive regulation because it was inconsistent with two statutes. Levinson v. State , 104 S.W.3d 409, 412 (Mo. banc 2003).
The Board cites Missouri National Education Ass'n v. Missouri State Board of Education , 34 S.W.2d at 286-87 ( MNEA ), as authority for determining the FAQ did not rise to the level of a rule. In MNEA , the State Board had set out general "Guidelines" for granting exemptions or revisions on school funding. These guidelines were "not a guide for future decision making but simply a compilation of the reasons school districts had advanced in the past in support of their requests. . . . No evidence was presented that the State Board followed or applied the so-called "Guidelines" in deciding. . . ." Id. at 287. This court ruled the guidelines did not qualify as rules. MNEA cited to Branson R-IV School District v. Labor Industrial Relations Commission , 888 S.W.2d 717, 720 (Mo.App. 1994), where the Southern District said a rule is an "agency statement of policy or interpretation of law of future effect which acts on unnamed and unspecified persons or facts." This interpretation of Section 536.010(4) and the definition of a rule is exactly what the FAQ did here. The case for this being a rule is strengthened by language in NME Hospital, Inc. v. Department of Social Services , 850 S.W.3d 71, 74 (Mo. banc 1993), where Judge Covington said, "Changes in statewide policy are rules." As the timeline of events here illustrates, the FAQ and the cease and desist letter to the respondent, and similar pronouncements to other veterinary legend medicine sellers, evidenced a change in policy of the Board. In holding the agency should have gone through the prescribed process of adopting a rule for a statement as to how certain charges would be determined, the court held that failure to properly comply with the rulemaking procedures in making a change rendered any amendment void.
The Board's assertion the FAQ was meant to be merely informative and not impact on individual rights is not persuasive. The fact that this pronouncement was in a question and answer format does not mean it is not a rule. Univ. of Iowa Hosp. Clinics v. Shalala , 180 F.3d 943, 951 (8th Cir. 1999). The FAQ was, and had the effect of, a rule but was admittedly not promulgated according to statute. This point is denied.
II. WAS THIS ACTION FOR DECLARATORY JUDGMENT AUTHORIZED UNDER SECTION 536.050?
Having determined the respondent was seeking to invalidate the Board's pronouncement in FAQ 8 as an attempt to make a rule, the court is now presented with the question intermingled in the first point. Could the respondent avail itself of the Administrative Procedure Act's declaratory judgment provisions or was it constrained to follow the general provisions of the general Declaratory Judgment Act?
As alluded to in the preceding point, the Board argues the controversy here did not turn on the validity or threatened application of a rule, "but rather, on statutory provision." In other words, the Board asserts its warning did not allege Pharmacal had violated any rules, but only addressed statutory references to the Pharmacy Law in chapter 338, nor did the Pharmacal petition in this case "allege the Board was threatening to apply a specifically cited rule." The Board concludes there is no authority cited by the trial court, or by Pharmacal, that allows a suit to be filed under Section 536.050 to challenge an unpromulgated rule. If the Board is correct, the trial court never acquired jurisdiction, and any suit would have to be brought under the general declaratory judgment provisions of chapter 527, with venue in Cole County.
Pharmacal's suit here sought to declare the FAQ invalid. The FAQ was, as earlier discussed, in reality, a rule. Under Section 536.010, it was an agency statement of general applicability that interpreted the Pharmacy Law, and stated who had to have such a license. The fact that the FAQ was not cited as such in the cease and desist letter is no justification to defeat any business in the respondent's position, having received such a letter which evidenced a change in longstanding agency policy, to be able to file under Section 536.050 to declare the invalidity of such a rule or the threatened application of such. To rule otherwise, would encourage an agency to threaten a new policy or interpretation of a statute without having properly promulgated the policy in rule form, without citing to the purported rule, and thwart the obvious legislative intent in Section 536.050 to allow relief.
Not well taken is the appellant Board's pronouncement that the trial court and the respondent failed to cite authority for the contention that Section 536.050's reference to rules, includes unpromulgated rules. It is the burden of the appellant to show that the trial court misconstrued the statue. See Morse v. Morse , 80 S.W.3d 898, 903 (Mo.App. 2002). That the Board cites no authority to sustain this point would warrant finding the point abandoned. Eagle ex rel. Estate of Eagle v. Redmond , 80 S.W.3d 920, 926 (Mo.App. 2002). In any event, Branson R-IV School District v. Labor Industrial Relations Commission , 888 S.W.2d 717, 722 n. 10 (Mo.App. 1994), allows a challenge under Section 536.050 to an unpromulgated rule.
Golden Rule Insurance Co. v. Missouri Department of Insurance , 56 S.W.3d at 471, does not aid the Board on this point. There the insurance company brought suit under Section 536.050 (validity of rules or threatened application thereof), where the agency application was specifically pursuant to statute, and where the agency did not resort to any of its rules in making the determination. Id. at 474-75. There was no mention in the Golden Rule opinion that there was even a promulgated or unpromulgated agency rule covering the issue contained in the suit; that of the definitions of a managed care plan and of a health indemnity plan. Both those dispositive terms were defined in the statutes, but not by agency rules. Id. at 474. Since there were no agency rules, this court properly held Golden Rule's declaratory suit could not be brought under the auspices of Section 536.050, which gives limited means to file a declaratory action in the fact of a threatened application of an agency rule without having to have the agency pass on the question presented. Id. at 474-75. In the case at bar, there was a recent, but not discussed or debated, unpromulgated agency rule, which interpreted a key statute in a totally different way from prior agency policy that was now congruent with a cease and desist letter threatening criminal sanctions sent to a business.
NME Hospital Inc. v. Department of Social Services , 850 S.W.2d at 71, is closest to the facts here. There, the basis for the agency's change was a policy statement in its manual. In neither NME or in this case, was there a clear statutory directive to support the new agency policy. Here the policy change was contained in a website. In neither case was the policy change (in effect a rule) properly promulgated. The policy change here was embedded in the cease and desist letter. Since the policy change was in effect an attempted rule, this allowed the party faced with penalties to file suit to invalidate the unpromulgated rule.
III. FINALITY, MOOTNESS, LIVE ISSUE
The Board's remaining point asserts error because the trial court did "not resolve a presently existing controversy" regarding Pharmacal's rights under the new or amended law (effective date August 2001), which became effective after the cease and desist letter. The Board asserts that the trial court only viewed the controversy under the language of Section 338.210.1, which was in effect at the time of the cease and desist letter. It is somewhat difficult to discern whether the Board in this point argues: (a) the matter is not final and, therefore, not appealable; or (b) the court's alleged oversight negated the requirement in a declaratory judgment action of the existence of a justiciable controversy, which presents a real and presently existing controversy for which specific relief is prayed, Northgate Apartments, L.P., v. City of North Kansas City , 45 SW.3d 475, 479 (Mo.App. 2001); or (c) that the effect of the new law completely changed the definition of the practice of pharmacy, and any reasonable interpretation would now clearly encompass the compounding of chemical activities of Pharmacal as being subject to the jurisdiction of the Pharmacy Board thus, as the Board contends, rendering the conclusions and judgment under the prior law "largely moot."
The logic and purpose, or potential remedy available to the appellant, under any of the above interpretations, is subject to question. Despite any difficulty in determining whether this point passes muster under Rule 84.04(d), the court concludes there was no reversible error committed. As has already been discussed, the FAQ had all the attributes of a statutorily defined rule. The trial court found the rule was not properly promulgated, nor was it a correct interpretation of chapter 338, thereby not providing a valid underpinning for the reasoning behind the June 2001 cease and desist letter. Through the efforts of the Board in the dueling motions and cross-motions for summary judgment, this issue of the effect of new statutory language emerging after the cease and desist letter, but before the trial court's decision on Pharmacal's declaratory judgment action was presented to the court. It further appears that the respondent fully assented to the trial court deciding if the new version of the law would support a renewed effort by the Pharmacy Board to license entities similar to Pharmacal, which are dispensing veterinary legend drugs for animal use.
Contrary to the Board's premise that the trial court did not rule on the new law, is language in the judgment in which the judge specifically noted that the Board ". . . asserts that the revisions of Section 338.210 resulting from the 2001 amendments . . . serve to clear up any confusion as to the conduct of [Pharmacal]. * * * From its review of the provisions of Chapter 338 RSMo, this Court fails to discern any express legislative intent therein to extend the powers of the [Board] to encompass the regulation of drugs to other than patients (humans), upon the prescription by physicians and other human health-care professionals."
No matter the scenario under which this point is presented, there is no reversible error. The trial judge in the transcript, and in the judgment, indicated neither the prior or present law extended the Board's jurisdiction to requiring a pharmacy license for dispensing animal legend drugs. The Board has, by this point, insisted on a ruling affirming the effect of the later enacted statutory change, and the ruling of no change for Pharmacal's practice. The controversy was not rendered moot by the passage of the 2001 amendment of the Pharmacy Law. The trial court had a live controversy before it: nor did the prior law or the amended law negate the Board's interpretation that it could require Pharmacal to obtain a pharmacy license? State ex. rel. Nixon v. Russell , No. SC 85725, slip op. at 5-6 (Mo. banc Mar. 30, 2004). The trial court decided the issue correctly. If the legislature does intend to extend the pharmacy law to include the business practice of Pharmacal, it may do so, taking into consideration existing statutes pertaining to veterinarians, Sections 340.200 to 340.330, and particularly, Section 340.216.
In summary, it would appear that the first interpretation of the then-existing law to support an attempt by the Pharmacy Board to insist that the dispensers of veterinary legend drugs are licensed, came in the form of the 2001 question-and-answer presentation on its website. The letter to, and the 2000 injunction filed against Chariton, and the earlier investigations of Pharmacal, showed a nascent Board intention to include veterinary legend drugs within the statutory framework of the "practice of pharmacy" (Section 338.010) or the definition of "pharmacy" (Section 338.210). However, the 2001 website clearly expressed a new and definite agency announcement to include veterinary drugs in chapter 338's purview. Though not denominated as a rule, this new policy of the Board, under these facts, amounted to an attempt, without proper legal underpinning and fulfillment of necessary requirements to obtain comment and hearing on the new rule, to attain rule status for the Board's interpretation. The cease and desist letter, which clearly warned of felony criminal charges for not obtaining a license, left little for the respondent to do other than to file for declaratory relief. This court refuses to follow the Board's second line of defense which, in essence, amounts to now determining the August 2001 legislative changes ipso facto rendered any right to relief by the respondent moot. Just as the trial court indicated in its judgment, there has been no legislative action, which would show an intent post-August 2001, to now allow the Board to require that dispensers of veterinary legend drugs be licensed. One final observation is presented: the general assembly is invited to reexamine the entire statutory scheme of chapter 338, so that those who must abide by licensure are clearly and fully aware of what types of conduct and business practices are expected.
The judgment is affirmed.
All concur.
DATE 1994 1997 1998 2000 2001 338.010 338.220 338.195 338.210 338.220 2002 536.050
ADDENDUM TIMELINE Description Acting on a complaint, Board investigates Parmacal for dispensing veterinary legend drugs without a pharmacy license. It concludes: "Based upon the information received, the Board determines that there did not appear to be a violation of the Pharmacy Practice Act, and it was the Board's decision that no further action could be taken." After an investigation of Pharmacal, similar to the one in 1994, Board takes no action under Pharmacy Act for Pharmacal's selling vet legend drugs directly to consumers. Board sends Cease and Desist Warning letter to Chariton, a veterinary supply store. Board files for injunction vs. Chariton. Nov. Board begins another investigation of Pharmacal by placing a vet legend drug prescription with Pharmacal. Early in the year, probably in January, the Board posts on its web site question and answer series which includes number 8, which states a vet legend drug may not be sold to the consumer, even with a prescription, without seller "being licensed as a pharmacy. . . ." March Board and Chariton agree to the entry of a consent judgment in Randolph County that Chariton will cease to sell legend vet medicine without being licensed as a pharmacy. May Inspector reports to the Board of the Nov. 2000 incident of the sale by Pharmacal of a vet legend drug. Board inspector tells Pharmacal, "based on a recent case the Board believes that the sale of any veterinary legend drug, based on a veterinarian's order, would be considered the practice of pharmacy." June Via certified mail, a "Cease and Desist Warning" letter was sent to Pharmacal, stating the Board had determined that "the following laws and/or rules are being violated. . . ." Section .1 which defined the practice of pharmacy, and pursuant to that any entity operating under what was defined as a pharmacy have a pharmacy license, and finally, than an unlicensed violator under shall "be adjudged guilty of a class C felony." Enclosed was an application for a permit — Pharmacal was told to immediately stop "dispensing . . . prescription drugs . . . directly to consumers," which conduct was deemed the unlicensed practice of pharmacy. July Board transmits to West Plains, a vet supply store in Springfield, a cease and desist letter based on operating without pharmacy license. Later in July, the general assembly passed Conference Committee Substitute for HB 567, which in part significantly amends Section (defining pharmacy), and (operating pharmacy without a license). HB 567, which shows the old law and the enactment of the new section is set out in footnote 3. Aug. The new law became effective August 28, 2001. Jan. Pharmacal files this suit under § for declaratory judgment and injunctive relief. Nov. Trial court enters summary judgment in this case.ADDENDUM
MISSOURI
DEPARTMENT OF ECONOMIC DEVELOPMENT Bob Holden Division of Professional Registration Joseph L Driskill Governor Marilyn Taylor Williams, Director Director
BOARD OF PHARMACY Kevin E. Kinkade, R.Ph. 3605 Missouri Boulevard Executive Director P.O. Box 625 Jefferson City, MO 65102-0625 573-751-0091 513-526-3464 FAX CERTIFIED MAIL 800-735-2966 TDD RETURN RECEIPT REQUESTED 7106 4575 1294 1553 7532
CEASE AND DESIST WARNING
June 21, 2001
Frank Evans United Pharmacal Co., Inc. P.O. Box 969 St. Joseph, MO 64502
Dear Mr. Evans:
The Missouri Board of Pharmacy is in receipt of an investigation report involving United Pharmacal Co., Inc. (IJPCO), located at 3705 Pear, St. Joseph, Missouri. Specifically, a Board inspector placed an order and received 1000 Prednisone 5mg tablets based on an order by a veterinarian. The bottle bears the federal veterinary legend; however, UPCO is not licensed to operate as a pharmacy in Missouri. It has been determined this facility is dispensing legend medications directly to consumers without holding appropriate licensure as a pharmacy.
United Pharmacal Co., Inc., 3705 Pear, P.O. Box 969, St. Joseph, Missouri, is in violation of the Pharmacy Practice Act. Specifically, it is the Board's determination that the following Laws and/or rules are being violated:
1. Section 338.010.1 The "practice of pharmacy" shall mean the interpretation and evaluation of prescription orders; the compounding, dispensing and labeling of drugs and devices pursuant to prescription orders; the participation in drug selection according to state law and participation in drug utilization reviews; the proper and safe storage of drugs and devices and the maintenance of proper records thereof; consultation with patients and other health care practitioners about the safe and effective use of drugs and devices; and the offering or performing of those acts, services, operations, or transactions necessary in the conduct, operation, management and control of a pharmacy. No person shall engage in the practice of pharmacy unless he is licensed under the provisions of this chapter. This chapter shall not be construed to prohibit the use of auxiliary personnel under the direct supervision of a pharmacist from assisting the pharmacist in any of his duties. This assistance in no way is intended to relieve the pharmacist from his responsibilities for compliance with this chapter and he will be responsible for the actions of the auxiliary personnel acting in his assistance. This chapter shall also not be construed to prohibit or interfere with any legally registered practitioner of medicine, dentistry, podiatry, or veterinary medicine, or the practice of optometry in accordance with and as provided in sections 195.070 and 336.220, RSMo, in the compounding or dispensing of his own prescriptions.
2. Section 338.220, RSMo., states in part:
1. It shall be unlawful for any person, copartnership, association, corporation or any other business entity to open, establish, operate or maintain any pharmacy, as defined by statute without first obtaining a permit to do so from the Missouri board of pharmacy. The following classes of pharmacy permits or licenses are hereby established:
(1) Class A: Community/ambulatory; (2) Class B: Hospital outpatient pharmacy; (3) Class C: Long-term care; (4) Class D: Home health care; (5) Class E: Radiopharmaceutical; (6) Class F: Renal dialysis; (7) Class G: Medical gas; (8) Class H: Sterile Product Compounding: (9) Class I: Consultant Services.
2. Application for such permit or license shall be made upon a form furnished to the applicant; shall contain a statement that it is made under oath or affirmation and that its representations are true and correct to the best knowledge and belief of the person signing same, subject to the penalties of making a false affidavit or declaration; and shall be accompanied by a permit or license fee. The permit or licensee issued shall be renewable upon payment of a renewal fee. Separate applications shall be made and separate permits or licenses required for each pharmacy opened, established, operated or maintained by the same owner.
3. Section 338.195. Any person, who is not licensed under this chapter, who violates any provision of sections 338.010 to 338.315 shall, upon conviction, be adjudged guilty of a class C felony.
You are hereby ordered to immediately CEASE AND DESIST the unlicensed practice of pharmacy. No dispensing of prescription drugs or prescription devices directly to consumers should take place without complying with all appropriate licensure and regulatory requirements as a licensed pharmacy.
Enclosed is an Application for New Permit to Operate a Pharmacy and a complete instruction packet. If you have any questions about the application process, please contact Deanna Allen at 573-526-6985.
Please respond within ten (10) days of the date of this letter as to what corrective actions you are taking or have taken in order to stop your unlicensed practice of pharmacy in Missouri.