Recently, I have represented a pharmacist whose reapplication for his controlled substances registration was denied by the Texas Department of Public Safety when he voluntarily acknowledged that he had previously been convicted of a felony. He was one of several defendants on trial for the same set of criminal transactions and his own share of the guilt was slight. It was essentially a case of bad judgment and naivety on the part of my client. He had entered into a business relationship with the wrong people and was now paying for their misdeeds. The Federal Drug Enforcement Agency had essentially agreed and declined to take action against his controlled substances registration. In addition the Texas Pharmacy Board has so far chosen not to seek any disciplinary sanction.
In contrast, the Texas Department of Public Safety pursuant to the Texas Controlled Substances Act § 481.063(e)(2)(A) summarily denied his reapplication on the basis of his voluntary admission of his felony conviction. This section of the Health and Safety Code provides for such denial when an applicant has been convicted or placed on community supervision or probation for a felony. Fortunately, the Texas Legislature has also inserted into this chapter a provision allowing the Director of the DPS to probate a denial under § 481.063(e)(2)(A) upon a showing of good cause. The Act and the Department of Public Safety’s own administrative rules also generally allow an applicant to request a hearing wherein they may present evidence and argument in their favor.
As a hearing would almost certainly be necessary to present evidence establishing good cause for a probated order, I requested one as part of my client’s response to the DPS’s decision to deny his reapplication. In reply, the DPS sent a letter reiterating their denial and pointing to § 481.063(h). This Section holds that in the case of a denial based on a felony conviction, the provisions of the Texas Administrative Procedure Act do not apply. This is significant in that this bars access to the normal administrative process, most importantly, a licensee’s right to a full evidentiary hearing before an Administrative Law Judge.
As an attorney with extensive experience in this field, I must say that to my knowledge this is unique among Texas professional licensing law. A professional’s right to an administrative hearing following an initial decision by a licensing board is generally considered sacrosanct because of due process concerns. This is rightly so, as denial of a pharmacist’s controlled substances registration is a significant government taking, essentially the removal of a pharmacist’s ability to make a living. The Administrative Procedure Act’s hearing provisions are meant to safeguard the due process guarantees of the Texas and Federal Constitution.
The removal of APA protections in this case would be less troublesome if the DPS instead provided some adequate alternative. They could for instance, as is common among state and federal agencies, simply adopt rules providing for a hearing before a hearing examiner at the Board. They have not chosen to do so. When we sent in a remedial packet of documents outlining his limited culpability for the underlying offense, the DPS sent a terse response that they remained firm in their decision and were still not going to allow my client a hearing.
This is all the more strange given that one would think it impossible to make an informed decision as to whether good cause is applicable in a specific case unless the subject party and their attorney are given an opportunity to argue this point. As is, the current state of the Texas Controlled Substances Act and DPS practice places unlimited and unchallengeable discretion with the DPS Director as to whether or not grant a probated order. This is a clear denial of due process as a licensee is given no meaningful opportunity to contest the DPS’s findings.
What is more, given the current state of the law it is not clear whether a pharmacist denied under § 481.063(e)(2)(A) has any opportunity for judicial review either. It is basic Texas law that a party may not judicially appeal an adverse administration decision without first submitting the administrative record in evidence. As it stands there is no administrative record; no findings of fact or findings of law, nor any testimony or set of evidentiary documents. Even if the handful of short letters between the DPS and my client were found to be a sufficient administrative record, it is unclear as to what the reviewing court could use as a basis for its holding. There is simply no record that can serve as the basis for a meaningful review of the Department of Public Safety’s decision.
The DPS needs to either provide an adequate alternative hearing procedure or ask the state legislature to bring § 481.063(e)(2)(A) back within the purview of the APA. If they don’t, one can only hope that the legislature decides to fill this legal loophole on their own initiative.