                            STATE OF MICHIGAN

                            COURT OF APPEALS



In re COLLEGE PHARMACY.


BUREAU OF PROFESSIONAL LICENSING,                                   UNPUBLISHED
                                                                    February 7, 2017
               Petitioner-Appellee,

v                                                                   No. 328828
                                                                    Department of Licensing and
                                                                    Regulatory Affairs
COLLEGE PHARMACY,                                                   LC No. 14-028072

               Respondent-Appellant.


Before: BOONSTRA, P.J., and SHAPIRO and GADOLA, JJ.

SHAPIRO, J. (dissenting).

       I respectfully dissent.

       Respondent appeals from a decision of the Board of Pharmacy Disciplinary
Subcommittee of the Bureau of Professional Licensing revoking respondent’s license to practice
in Michigan. I would conclude, given the record before us, that the Board’s imposition of the
sanction of license revocation was not supported by competent, material, and substantial
evidence. Accordingly, I would vacate the Board’s order and remand for further proceedings
pursuant to MCL 333.16226.

      Petitioner issued an administrative complaint against respondent pharmacy on the
grounds that it had been subject to administrative penalties in another state, Colorado. MCL
333.17768(2)(d) provides:

       [I]n a manner consistent with part 161 [MCL333.16101 et seq], the board may
       fine, reprimand, or place on probation, a person licensed under this part, or deny,
       limit, suspend, or revoke a license issued under this part or may order restitution
       or community service if the board finds that . . . [t]he applicant . . . has had its
       license or federal registration limited, suspended, or revoked or been subject to
       any other criminal, civil, or has been subject to any other criminal, civil or
       administrative penalty.



                                               -1-
       A hearing was conducted by a hearing examiner (ALJ) who issued a Proposal for
Decision on April 10, 2015. The Proposal for Decision, as will be set forth below, contained
extensive findings of fact and law none of which are challenged by either party. The hearing
examiner did not recommend a specific penalty as such an action is beyond her authority. MCL
333.16231a provides:

               (2) The hearing examiner shall determine if there are grounds for
       disciplinary action . . . . The hearings examiner shall prepare recommended
       findings of fact and conclusions of law for transmittal to the appropriate
       disciplinary subcommittee. The hearings examiner shall not recommend or
       impose penalties. [Emphasis added.]

       The ALJ’s conclusions of law read:

       The above Findings of Fact establish that Respondent College Pharmacy had
       administrative penalties imposed against it through Final Orders of the Colorado
       Board of Pharmacy. Pursuant to the Public Health Code Section 17768(2)(d), this
       constitutes grounds for action by the Michigan Board of Pharmacy. The
       Michigan Board of Pharmacy may consider, as mitigation, the above Findings of
       Fact establishing that the current pharmacy manager of Respondent was
       specifically approved by the Colorado Board to take over from a previous
       owner/manager who was in charge when the acts leading to sanctions occurred.
       Further, the new pharmacy manager has instituted policies and procedures to
       prevent reoccurrence of problems.

       Respondent filed an exception to the ALJ’s proposal for decision arguing that no
sanctions of any kind were warranted in this case in light of the mitigating factors noted by the
ALJ.

        The Board of Pharmacy Disciplinary Subcommittee considered the matter at its June 10,
2015 meeting, and its resulting order stated that it “accepted the administrative law judge’s
Findings of Fact and Conclusions of Law in the Proposal for Decision.”1 The substantive portion
of the subcommittee’s July 24, 2015 order reads in full:

              The Disciplinary Subcommittee of the Michigan Board of Pharmacy
       (Disciplinary Subcommittee), having reviewed the administrative record,
       considered this matter at a regularly scheduled meeting held in Lansing, Michigan
       on June 10, 2015 and accepted the administrative law judge’s Findings of Fact
       and Conclusions of Law in the Proposal for Decision. Therefore,

                     IT IS ORDERED that for violating section 17768(2)(d) of the
       Public Health Code, supra, Respondent Pharmacy’s license to practice as a


1
 The subcommittee’s proceedings are not recorded. Minutes are maintained but as to the instant
matter state only that a motion to revoke respondent’s license was made and adopted.


                                               -2-
       pharmacy in the state of      Michigan is REVOKED, commencing on the
       effective date of this Order.

        Respondent argues that the decision to impose license revocation as opposed to any of the
other available sanctions2 should be reversed. We review final orders of disciplinary
subcommittees to determine whether they are authorized by law and are supported by competent,
material, and substantial evidence on the whole record. Dep’t of Community Health v Risch, 274
Mich App 365, 370-371; 733 NW2d 403 (2007), and Const 1963, art 6 § 28. Respondent
suggests that the subcommittee’s decision should be reviewed under an abuse of discretion
standard. However, in Risch, we considered this issue and concluded that “judicial review of the
disciplinary subcommittee’s orders is limited to that set forth in Const. 1963, Art. 6 Sec 28,
which provides in relevant part:

       “All final decisions, findings, rulings and orders of any administrative officer or
       agency existing under the constitution or by law, which are judicial or quasi-
       judicial and affect private rights or licenses, shall be subject to direct review by
       the courts as provided by law. This review shall include, as a minimum, the
       determination whether such final decisions, findings, rulings and orders are
       authorized by law; and, in cases in which a hearing is required, whether the same
       are supported by competent, material and substantial evidence on the whole
       record.” [274 Mich App at 371, quoting Const. 1963, Art. 6 Sec 28.]

       The relevant standard of review thus consists of two different determinations. First, was
the decision authorized by law and second was it “supported by competent, material, and
substantial evidence on the whole record.” The first of these is straightforward; the decision is
authorized by law. As to the second, it is necessary to review the ALJ’s findings of fact, which
as noted above, neither party takes exception to:

       FINDINGS OF FACT

           1. Jerry Gillick R.Ph., has been licensed as a pharmacist in the United States
              since 1997. In 2005 he moved to Colorado and began working for College
              Pharmacy. College Pharmacy is licensed in 47 states. In 2009, Mr.
              Gillick became President and CEO of College Pharmacy[.]

           2. On December 18, 2007, Colorado’s Board of Pharmacy issued a
              Stipulation and Final Order. The charges leading to the Final Order
              involved Board allegations that College Pharmacy had introduced or
              delivered into interstate commerce a human growth hormone (i.e.
              “somatropin”) that was not approved by the FDA, and offered it for sale
              through interstate commerce for uses and conditions other than those
              approved by the FDA for authorized human growth hormones. The


2
  These include: probation, fine, reprimand, limitation or suspension of license, restitution or
community service. MCL 333.17768(2)(d).


                                               -3-
   Colorado Board also alleged inaccurate or inappropriate reprocessing and
   repackaging of the somatropin. At the time Thomas Bader was owner of
   College Pharmacy. The Colorado charging document asserts that Mr.
   Bader, as the pharmacist manager, was responsible for all operations
   violations charged against College Pharmacy. As a result of the Final
   Order, Mr. Bader was directed to transfer all of his shares to an employee
   stock ownership plan. College Pharmacy was required to submit quarterly
   reports assuring that any dispensing of human growth hormone was only
   for FDA approved uses and that dispensing was based on patient-specific
   orders. The Order also required that the Board approve any pharmacy
   manager appointed to run College Pharmacy for seven years from the date
   of the Final Order. (Exhibit 1)

3. Mr. Gillick became the pharmacist in charge (i.e. pharmacy manager) after
   Mr. Bader relinquished ownership of College Pharmacy. Mr. Gillick has
   assured compliance with all reporting requirements imposed on College
   Pharmacy as a result of the 2007 Final Order.

4. Prior to Mr. Gillick taking over as pharmacy manager, a routine audit in
   May 2008 found that College Pharmacy had purchased and received
   human growth hormone from a wholesaler that was not registered in
   Colorado. Further the audit found that an Illinois veterinarian had ordered
   the human growth hormone listing herself as both the prescribing
   practitioner and the patient. These two acts were found to be violations of
   Colorado pharmacy regulations and a violation of the 2007 Stipulation and
   Final Order that prohibited any further violations of state or federal
   regulations. (Exhibit 2)

5. When Mr. Gillick took over pharmacy manager responsibilities in 2009,
   he was not aware that Mr. Bader had entered an agreement to purchase
   human growth hormone from an unlicensed wholesaler and filled a
   prescription indicating that a veterinarian was self- prescribing [sic]
   human growth hormone, because prior to Mr. Gillick assuming managerial
   responsibilities, there was no system in place to track whether wholesalers
   were registered in Colorado. Although Mr. Gillick was not involved in the
   violations found in the May 2008 audit, he assumed responsibility for
   correcting the College Pharmacy violations, and complying with all
   conditions of the Colorado Board’s disciplinary Orders, when he took over
   as manager.

6. As a result of the 2008 audit findings, the Colorado Board issued a second
   Stipulation and Final Order dated April 10, 2009, placing College
   Pharmacy’s registration as a prescription drug outlet in Colorado on
   probation for seven years, prohibiting the purchase, sale and dispensing of
   any human growth hormone during probation and requiring more
   quarterly reports to the Board. (Exhibit 2)


                                   -4-
           7. In or around December 2012, College Pharmacy entered into an
              agreement to compound an injectable used in cosmetic procedures called
              “Tozzi Solution”. [sic] The inventor of the solution filed a complaint
              against College Pharmacy with the Colorado Board. The Board’s
              investigation found that a trial batch of the solution compounded by
              College Pharmacy was dispensed with a “7-months beyond use”
              expiration date instead of “365 days beyond-use date” the manufacturer’s
              formula called for. Stability testing by College Pharmacy indicated that
              the solution had a minimum 2 year stability. The mistaken expiration date
              assigned to the trial batch did not affect the safety of the batch, rather the
              expiration period was shorter than it needed to be. Although the Board did
              not find that College Pharmacy had violated a specific statutory provision
              or rule, it issued a “letter of admonition” on July 22, 2013, and noted it as
              a “disciplinary action” in College Pharmacy’s permanent record. (Exhibit
              3) The July 2013 Colorado letter of admonishment was reported to each
              of the 47 states where College Pharmacy is licensed, and there has been no
              disciplinary action in states other than Michigan as a result of the
              admonishment.

           8. After taking over College Pharmacy, and with knowledge of the 2007 and
              2009 Colorado Board actions, Mr. Gillick instituted a system to document
              whether a wholesaler involved in a purchase is licensed in a specific state.
              In addition there is now a system to track the type of practitioner ordering
              or prescribing controlled substances. College Pharmacy only fills patient
              specific prescriptions and no bulk distribution occurs. There have been no
              product safety allegations filed against College Pharmacy.

        Given the statutory limitations on its authority, the ALJ did not make a recommendation
as to the proper sanction other than to note that given the violation the Board had “grounds for
action” against respondent and that in imposing any sanction, the Board “may consider as
mitigation, the above Findings of Fact establishing that the current pharmacy manager of
Respondent was specifically approved by the Colorado Board to take over from the previous
owner/manager who was in charge when the acts leading to sanctions occurred. Further, the new
pharmacy manager has instituted policies and procedures to prevent reoccurrence of problems.”

        In light of these Conclusions of Law, I find no grounds in the ALJ’s report to impose the
ultimate penalty of license revocation. Given that the Board adopted and relied upon that report,
the Board did not have “substantial evidence” to support the sanction imposed. The serious
violations of 2006 and 2008 occurred while respondent was under different ownership and
management. The new management was specifically approved by the Colorado Board of
Pharmacy, and respondent was placed on probation for a period of seven years. The only
violation that occurred thereafter was the 2012 error, which, as found by the ALJ, “did not affect
the safety of the [medicine], rather the expiration period was shorter than it needed to be.” The
Colorado Board of Pharmacy admonished respondent for this violation but took no other action.
Respondent reported this discipline to the other 47 states in which it is licensed, and none, other
than Michigan, took disciplinary action.


                                                -5-
         When asked at oral argument why substantial evidence supported the sanction, counsel
for the Board took the position that the Board is not required to offer any justification for
selecting one sanction over any other and that its sanction decisions are unreviewable except for
whether the sanction may be imposed at all. I recognize that the Board has broad discretion and
it is not our role to second-guess its choice of sanction where any of several are supported by the
evidence. Nevertheless, while the standard of review is very deferential, the Board’s actions are,
and to comply with due process must be, reviewable by this Court, and, I would not conclude
that because the sanction is authorized by law that it is necessarily supported by substantial
evidence. Given the Board’s position that its choice of sanctions is unreviewable, it has not
made an argument why the facts of this case, as found by the ALJ and accepted by the Board,
justify the most severe sanction available. Moreover, having accepted the ALJ’s findings, it
must consider the mitigating factors set forth therein. See Marrs v Board of Medicine, 422 Mich
688, 694; 375 NW2d 321 (1985).

        Given the record before us I would conclude that the Board did not consider the
mitigating circumstances in determining the appropriate sanction. I would vacate the
disciplinary subcommittee’s final order and remand to that body for further consideration
pursuant to MCL 333.16226(2).3



                                                            /s/ Douglas B. Shapiro




3
  Respondent’s counsel filed an affidavit with this Court attesting that at the Disciplinary
Subcommittee meeting there was no discussion regarding the specific facts of this case and that
one of the subcommittee’s members “commented that Michigan does not need any additional
out-of-state compounding pharmacies.” This affidavit is not part of the administrative record,
and I do not rely upon it. I reference it however, to suggest that where the most severe sanction
is being imposed despite significant mitigating evidence, it would facilitate our review if the
Board provided some of its reasoning in its order.


                                                -6-
