Blue Mint Pharmco, LLC v. Tex. State Bd. of Pharmacy

667 F.Supp.3d 473

BLUE MINT PHARMCO, LLC, et al., Plaintiffs, v. TEXAS STATE BOARD OF PHARMACY, et al., Defendants.

CIVIL ACTION NO. 4:22-CV-561

United States District Court, S.D. Texas, Houston Division

Signed March 30, 2023

Michael Tran, Michael J. Khouri, Khouri Law Firm, APC, Irvine, CA, for Plaintiffs.

Allison Marie Collins, Office of the Texas Attorney General, Austin, TX, for Defendants.

MEMORANDUM OPINION AND ORDER

GEORGE C. HANKS, JR., UNITED STATES DISTRICT JUDGE

Pending before the Court is a motion to dismiss filed by Defendants. The motion (Dkt. 20) is GRANTED. Plaintiffs' claims for injunctive and declaratory relief are DISMISSED WITHOUT PREJUDICE. Plaintiffs' claims for money damages against the individual members of the Texas State Board of Pharmacy in their individual capacities are DISMISSED WITH PREJUDICE. Plaintiffs' claims for money damages against the Texas State Board of Pharmacy and against the individual members of the Texas State Board of Pharmacy in their official capacities are DISMISSED WITHOUT PREJUDICE.

FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff Blue Mint Pharmco, LLC owns Blue Mint Pharmacy, for which Plaintiff Jona Rushin is the pharmacist-in-charge. (Dkt. 1 at p. 3; Dkt. 22-2 at p. 1).¹ Blue Mint, which "is an African American owned business[,]" has sued the Texas State Board of Pharmacy as well as its members in both their individual and official capacities, alleging that the defendants violated Blue Mint's rights under the Due Process and Equal Protection clauses of the Fourteenth Amendment to the United States Constitution by bringing an unlawful disciplinary proceeding against Blue Mint. (Dkt. 1 at pp. 3-4, 13-16).² Blue Mint also brings a claim under 42 U.S.C. § 1981 ("Section 1981"). (Dkt. 1 at p. 15).

—Disciplinary proceedings for pharmacists

Texas regulates the pharmacy profession through the Texas Pharmacy Act ("the Act"), which provides that the Board "shall adopt rules consistent with [the Act] for the administration and enforcement of [the Act]." Tex. Occ. Code § 554.051(a); see also Garrett v. Texas State Board of Pharmacy, No. 03-21-00039-CV, 2023 WL 376900, at *1 (Tex. App.—Austin Jan. 25, 2023, no pet. h.). A person must hold a license issued by the Board to practice pharmacy in Texas, and a person may not operate a pharmacy unless the pharmacy itself holds a license issued by the Board. Tex. Occ. Code §§ 558.001, 560.001.

Under the Act, "[t]he [B]oard may discipline an applicant for or the holder of a current or expired license to practice pharmacy if the [B]oard finds that the applicant or license holder has" engaged in any of several behaviors enumerated in the Act, including violating the Act; violating a rule adopted by the Board; violating "any pharmacy or drug statute or rule of this state, another state, or the United States;" practicing pharmacy negligently; and dispensing "a prescription drug while acting outside the usual course and scope of professional practice[.]" Tex. Occ. Code § 565.001(a). Disciplinary sanctions can include, among other things, monetary penalties and the suspension or revocation of a pharmacy license. Tex. Occ. Code §§ 565.051, 566.002. A pharmacist or pharmacy made the object of a disciplinary action by the Board (generally called the "respondent") is statutorily entitled to a contested case hearing before an administrative law judge (or a panel of administrative law judges) at the Texas State Office of Administrative Hearings ("SOAH"). Tex. Occ. Code § 565.061; Tex. Gov't Code § 2001.051.

In a contested case hearing before SOAH, "the [B]oard has the burden to prove that grounds to discipline [the] respondent exist" by a preponderance of the evidence. 22 Tex. Admin. Code § 281.31. The respondent may have counsel at the hearing, and the hearing is generally governed by "[t]he rules of evidence as applied in a nonjury civil case in a district court of [Texas.]" Tex. Gov't Code §§ 2001.053, 2001.081. The respondent may call witnesses (including expert witnesses), depose witnesses, cross-examine witnesses, conduct discovery, present evidence, and object to the Board's evidence. Tex. Gov't Code §§ 2001.081, 2001.084, 2001.087, 2001.091, 2001.092, 2001.094. After the SOAH hearing, the SOAH judge makes a recommendation to the Board in the form of a written "proposal for decision" that includes findings of fact and conclusions of law. Tex. Gov't Code §§ 2001.058, 2003.051; 1 Tex. Admin. Code § 155.507. The parties may file exceptions to the SOAH proposal, and the SOAH judge may amend the proposal in response to the exception briefing. 1 Tex. Admin. Code § 155.507.

Once SOAH has finalized its written proposal, the matter is returned to the Board. Tex. Gov't Code § 2003.051; 1 Tex. Admin. Code § 155.507. The Board may change a finding of fact or a conclusion of law contained within SOAH's proposal, but only on limited grounds and only if it states its "specific reason and legal basis for [the] change" in writing. Tex. Gov't Code § 2001.058(e). The Board must send a copy of its final decision to SOAH. Tex. Gov't Code § 2003.051(b). Once the Board makes its final decision, a "person . . . who is aggrieved" by the decision may seek judicial review in Texas state court. Tex. Gov't Code § 2001.171; Tex. Occ. Code § 565.061(b).

—The disciplinary proceeding against Blue Mint

The disciplinary proceeding against Blue Mint from which this lawsuit stems is ongoing and has thus far followed the procedure outlined above.³ The Board filed a complaint with SOAH alleging that, during a 15-month period between April of 2019 and July of 2020, Blue Mint essentially became a pill mill at which people obtained two highly addictive controlled substances—hydrocodone, which is an opioid pain medication, and carisoprodol, which is a muscle relaxant—by presenting prescriptions that were "not issued for a legitimate therapeutic purpose or medical need in the regular course of professional practice[.]" (Dkt. 21-1 at pp. 4-6). According to the Board's complaint, Blue Mint "knew or should have known that the majority of the controlled substance prescriptions [for hydrocodone and carisoprodol] referenced [in the Board's complaint] were invalid . . . due to . . . discernable patterns or red flag factors that a reasonable pharmacist should have recognized[.]" (Dkt. 21-1 at pp. 4-6). The "red flag factors" listed by the Board in its complaint were:

"A. Prescriptions for hydrocodone and carisoprodol were purportedly authorized exclusively at the highest strength available in tablet form, with no variance;

B. Large quantities were prescribed, including:

i. An average of 113 hydrocodone /APAP⁴ 10-325 mg tablets per patient; and

ii. An average of 85 carisoprodol 350 mg tablets per patient;

C. Controlled substance prescriptions were routinely prescribed as combinations, with patients receiving more than one controlled substance on the same date;

D. The prescriptions indicated a discernible lack of individualized treatment in that patients were receiving the same controlled substances, in the same combinations, at the same maximum strength, from the same prescriber;

E. In addition to prescriptions for large quantities of high strengths of controlled substances, patients were also prescribed dangerous drugs and/or over-the-counter products in discernible patterns; and

F. Opioids such as hydrocodone and muscle relaxants such as carisoprodol are commonly known drugs of abuse—especially in combination.

Dkt. 21-1 at p. 5.

The red flag factors cited by the Board in its complaint against Blue Mint were drawn from a larger list of 19 dispensing patterns that the Board has deemed "relevant to preventing the non-therapeutic dispensing of controlled substances" and that is contained in the Texas Administrative Code ("the red flag factors"). See 22 Tex. Admin. Code § 291.29(f). The Texas Administrative Code provides that the red flag factors "shall be considered by evaluating the totality of the circumstances rather than any single factor[.]" Id.

Blue Mint received a contested case hearing before a panel of SOAH administrative law judges. Blue Mint had counsel present, presented evidence, and called three witnesses, including an expert witness. The SOAH panel issued a 62-page proposal for decision that included extensive findings of fact and conclusions of law and, ultimately, "recommend[ed] that the pharmacist license of Ms. [Jona] Rushin and the pharmacy license of Blue Mint Pharmacy be revoked." Neither Blue Mint nor the Board filed any exceptions to the SOAH panel's proposal for decision, and the SOAH panel returned Blue Mint's case to the Board. The SOAH panel returned the case to the Board very recently—on February 13, 2023—and the Board has not yet taken any action on the SOAH panel's proposal for decision.

—Blue Mint's allegations in this lawsuit

In its complaint, Blue Mint brings claims against the Board under 42 U.S.C. § 1983 for violations of the Due Process and Equal Protection clauses of the Fourteenth Amendment to the United States Constitution. (Dkt. 1 at pp. 13-16). Blue Mint also brings a claim against the Board under 42 U.S.C. § 1981. (Dkt. 1 at p. 15). Blue Mint's claims are rooted in two complaints about the Board's conduct, which are summarized below.

i. Blue Mint's first expert witness

First, Blue Mint alleges that the Board deliberately intimidated the first expert witness that Blue Mint designated and that the expert, as a result, refused to testify at the SOAH hearing. (Dkt. 1 at pp. 10-12).

When it received notice from the Board that it was under investigation, Blue Mint retained a pharmacist named Hussam Hamoush ("Hamoush") to serve as an expert witness. (Dkt. 1 at pp. 10-12; Dkt. 27-1 at p. 1). Blue Mint and the Board held an informal settlement conference in an attempt to resolve the matter prior to the initiation of formal SOAH proceedings, and Hamoush offered his expert testimony at that informal settlement conference. (Dkt. 1 at pp. 10-11). According to Blue...