Could Arkansas amend a physician drug-dispensing law after a court struck down the old version?

Plain-English summary

A Pulaski County circuit court had struck down Arkansas’s physician drug-dispensing law after finding that it gave the State Medical Board unregulated discretion to decide whether a doctor had shown a “need” to dispense prescription drugs. Lawmakers then passed Act 1169 of 2013, which retained Board approval but listed considerations for the need decision. Representative Andy Davis asked whether the Legislature could amend a statute declared unconstitutional and whether the new act repeated the defect or violated the court’s injunction.

The AG drew a time line. The Legislature could not retroactively annul the court’s judgment. It could, however, change the law for future cases. The opinion therefore answered the first two questions generally yes, including where the old law had been called unconstitutional special legislation.

The AG also answered no to the challenges to Act 1169. The amendment directed the Board to consider specified information, including the requested drug, patients’ access through other professionals, travel distance and hours, prescribing investigations, potential manufacturer conflicts, cost containment, and safeguards for storage and drug interactions. The AG concluded those standards guided the Board enough to answer the claim of unbridled discretion. He treated the amended act as prospective and presumed constitutional unless a court later ruled otherwise. That was the AG’s legal opinion, not a new court judgment on Act 1169.

Currency note

This opinion was issued in 2013. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Can Arkansas lawmakers rewrite a statute a court struck down? The AG said they could change the law for future application. They could not undo or reverse a judgment already entered by a court.

Did Act 1169 let the Medical Board decide “need” without standards? The AG concluded it did not. The act added a list of factors to guide the Board’s decision on a physician’s application to dispense a particular legend drug.

Did the old injunction prevent the new law from requiring a showing of need? The AG answered no. The injunction followed a ruling about the earlier statute; Act 1169 amended it prospectively. The opinion noted that a challenger would need an express court ruling to establish that the amended law was unconstitutional.

Did every doctor have to apply under the amended rule?
The opinion said Act 1169 exempted licensed physicians who had dispensed before its effective date from the new approval requirement and exempted topical medication prescriptions from the “need” requirement. It did not analyze other factual applications.

Background and statutory framework

Under A.C.A. § 17-95-102(d), as discussed in the opinion, physicians needed Medical Board approval to dispense legend drugs for patients’ use outside the physician’s office. The earlier statute required a showing of need but left the Board with too little guidance, according to the circuit court ruling described by the AG. Act 1169 kept the approval framework and added detailed decision factors.

The separation of powers issue was the boundary between unlawful delegation of legislative authority and lawful delegation of fact finding under statutory guidelines. The AG concluded that the amended factors supplied the needed guidance. His answer about the injunction depended on the act’s prospective effect and the presumption of constitutionality pending any later court ruling.

Citations

• A.C.A. § 17-95-102(d), physician dispensing approval
• A.C.A. § 17-95-102(d)(2), existing-physician provision
• A.C.A. § 17-95-102(d)(4), topical medication exception
• Act 1169 of 2013, amendment discussed in the opinion
• Federal Express Corp. v. Skelton, 265 Ark. 187, 196, 578 S.W.2d 1 (1979), cited on retroactive annulment of judgments
• Venhaus v. State, 285 Ark. 23, 684 S.W.2d 252 (1985), cited on delegation of discretion

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

STATE OF ARKANSAS

THE ATTORNEY GENERAL
Dustin McDANIEL

Opinion No. 2013-037

May 13, 2013

The Honorable Andy Davis

State Representative

Post Office Box 30248

Little Rock, Arkansas 72260-0005

Dear Representative Davis:

You have requested my opinion on Senate Bill 968 of the 89" General Assembly, which is now Act 1169 (approved April 12, 2013). As you note, this legislation is designed to regulate physician dispensing of legend drugs. You have asked the following questions in this regard:

1. Does the legislature have the authority to amend a statute that a
   Circuit Court has declared unconstitutional and void?

2. Does the legislature have the authority to amend a statute that has
   been declared special legislation and therefore unconstitutional and void?

3. Does [Act 1169 of 2013], an amendment of a statute that has
   been declared unconstitutional and void, repose unregulated
   and/or undefined authority in the State Medical Board to use
   unbridled discretion to determine need for physician dispensing?

4. Does [Act 1169 of 2013] violate Judge Piazza’s injunction that
   states the board can’t require doctors to “show a need” to obtain the permit to sell medications?

323 CENTER STREET, SUITE 200 * LiTTLE Rock, ARKANSAS 72201
TELEPHONE (501) 682-2007 * Fax (501) 682-8084
INTERNET WEBSITE * http://www.ag.state.ar.us/

The Honorable Andy Davis
State Representative
Opinion No. 2013-037
Page 2

RESPONSE

In response to your first two questions, the General Assembly plainly has general authority to modify, for the future, the laws as declared by decisions of the courts. The answer to your third and fourth questions is “no,” in my opinion.

Question I - Does the legislature have the authority to amend a statute that a Circuit Court has declared unconstitutional and void?

The General Assembly cannot annul a court decision.’ But it may modify, for the future, the law as declared by decisions of the courts.” The answer to this question is, therefore, generally “yes.”

Question 2 - Does the legislature have the authority to amend a statute that has been declared special legislation and therefore unconstitutional and void?

Generally yes. See response to Question 1 above. The General Assembly plainly cannot retroactively annul a court decision. But it can enact legislation to prospectively remedy an act that has been declared unconstitutional.

Question 3 - Does [Act 1169 of 2013], an amendment of a statute that has been declared unconstitutional and void, repose unregulated and/or undefined authority in the State Medical Board to use unbridled discretion to determine need for physician dispensing?

The answer to this question is “no,” in my opinion.

Under A.C.A. § 17-95-102(d), physicians may not dispense legend drugs until they have obtained approval by the Arkansas State Medical Board after

"Tt has been stated in this regard that “[wJhere litigation has proceeded to a judgment which determines the controversy on its merits, it is beyond the power of legislation to alter or control such judgment. In other words, legislative action cannot be made to retroact on past controversies which the courts in the exercise of their undoubted authority have determined, and the legislature may not abrogate or reverse a judicial decision.” 16 C.J.S. Constitutional Law § 128 (emphasis added). The exercise of such power by the legislature is unconstitutional under the separation of powers doctrine, embodied in Ark. Const. art. 4, §§ 1 and 2, See also Federal Express Corp. v. Skelton, 265 Ark. 187, 196, 578 S.W.2d 1 (1979) (finding no provision authorizing the legislature to retroactively annul a decision of the court).

? Id. at § 115.

The Honorable Andy Davis
State Representative
Opinion No, 2013-037
Page 3

application to the Board upon a “showing of need.’ As amended by Act 1169 of 2013, the statute exempts those licensed physicians who were dispensing before the act’s effective date. Most significantly, however, Act 1169 added a new subsection (3) to section 17-95-102(d) that guides the Board’s determination whether such a “need” exists:

The board shall determine whether need exists for a physician to dispense a specific legend drug to the physician’s patient for a patient’s personal use and administration outside of the physician’s office based on such information as is necessary for the board to determine:

(A) The legend drug or drugs that the physician requests to dispense;

(B) The ability of a physician’s patient to obtain the legend drug from other medical professionals;

(C) The availability of the legend drug to be prescribed by the physician;

(D) The hours at which the legend drug may be obtained from other medical professionals;

(E) The distance the physician’s patient must travel to obtain the legend drug from other medical professionals;

(F) Whether the physician has been investigated by the board
concerning the improper prescribing or use of a legend drug;

(G) Whether the physician has a financial relationship with the manufacturer of a legend drug that would create the appearance of a conflict of interest;

> Act 1169 of 2013 did not alter this basic Board approval requirement, but only amended slightly some of
its wording and placed it under new subsection (d)(1). Prior to its amendment, the first sentence of section 17-95-102(d) stated: “No [licensed] physician ... shall dispense legend drugs without prior approval by the Arkansas State Medical Board after application to the board and on the showing of need.” Act 1169 amended this language slightly to replace “No” with “A” and to add “not,” so that it now states: “A
[licensed] physician ... shall not dispense legend drugs without prior approval by the Arkansas State Medical Board after application to the board and on the showing of need.” Acts 2013, No. 1169, § 1.

“ Id; A.C.A. § 17-95-102(d)(2). Act 1169 contains an emergency clause and therefore became effective on April 12, 2013, the date of its approval, Acts 2013, No. 1169, § 2.

The Honorable Andy Davis
State Representative
Opinion No, 2013-037
Page 4

(H) Whether the physician dispensing a legend drug will foster cost containment through improved efficiency and productivity; and

(J) The procedures the physician has implemented to:

(i) Assure compliance with the requirements of
subsection (c) of this section;

(ii) Monitor and guard against potential drug
interactions;

(iii) Store and safeguard the legend drugs; and

(iv) Comply with § 20-7-601 et seq. concerning the
reporting requirements to the Prescription Drug
Monitoring Program.°

Prior to this amendment, the statute contained the “showing of need” requirement and directed the Board to “adopt regulations to carry out [the statute’s] purpose.” As indicated by your question, a court declared the statute unconstitutional.’ On January 17, 2013, in Abraham y. Pierce, the Circuit Court of Pulaski County granted the plaintiff's motion for summary judgment, finding in part that the Board regulation “exceeds the Arkansas State Medical Board’s authority in that the Legislature reposed absolute, unregulated or undefined authority in the Board to use unbridled discretion to determine need for issuance of a permit....”°

It is of course well-established under constitutional “separation of powers” principles’ that the legislature is not permitted to delegate its legislative authority,

° The act also added a new subsection to exempt from the “need” requirement “[a] prescription for a topical medication.” A.C.A. § 17-95-102(d)(4); Acts 2013, No. 1169, § 1.

° A.C.A. § 17-95-102(e) (Repl. 2010).

’ Abraham vy. Pierce, Pulaski County Circuit Court Case No. 60CV 2010-7400 (2013) (order granting motion for summary judgment, finding in part that the Board regulation “exceeds the Arkansas State Medical Board’s authority in that the Legislature reposed absolute, unregulated or undefined authority in the Board to use unbridled discretion to determine need for issuance of a permit....”)

• Pulaski County Circuit Court, Second Division, Case No. 60CV 2010-7400 (2013) (order granting motion
  for summary judgment).

° Ark. Const. art. 4, §§ 2 and 3.

The Honorable Andy Davis
State Representative
Opinion No. 2013-037
Page 5

and therefore may not vest administrative boards with “unbridled discretion.”"°

It is equally clear, however, that the legislature can delegate to an agency the power to determine the facts and circumstances upon which a law may operate." But such delegation must include appropriate guidelines for those who are to act under the law’s general provisions:

While the General Assembly may not delegate its legislative
authority, it may by providing guidelines, delegate ‘the power to determine certain facts, or the happening of a certain contingency, on which the operation of the statute is by its terms made to depend.’!”

The Pulaski County Circuit Court order striking A.C.A. § 17-95-102(d) echoes the Arkansas Supreme Court’s pronouncement that a statute will not be upheld if it “reposes absolute, unregulated or undefined discretion in an administrative body....”'° It thus appears that the statute was held unconstitutional for lack of adequate standards to guide the determination whether a physician had made the requisite “showing of need” to dispense legend drugs.

The General Assembly subsequently amended the statute to include the language set out above. These new provisions (subsection (d)(3)(A) through (1)) outline the matters to be determined by the Board as it assesses whether a physician has made the necessary “showing of need.” In my opinion, they provide the necessary guidance to the Board to withstand an allegation of an unconstitutional delegation of legislative authority.

In response to your specific question, therefore, it is my opinion that Act 1169 of 2013 does not repose unregulated and/or undefined authority in the Board.

© Venhaus v. State, 285 Ark. 23, 684 S.W.2d 252 (1985); Kettell v. Johnson & Johnson, 337 F. Supp. 892 (E.D, Ark, 1972); Walden y. Hart, 243 Ark. 650, 420 S.W.2d 868 (1967). As stated in Walden, supra, “a statute or ordinance which ‘reposes absolute, unregulated or undefined discretion in an administrative body will not be upheld.’” 243 Ark. at 654 (quoting City of Florence v. George, 127 8.E.2d 210 (S.C. 1962) and citing 12 ALR p. 1435 and 92 ALR p. 400).

" Hooker v. Parkin, 235 Ark. 218, 357 S.W.2d 534 (1962); Campbell v. Arkansas State Hospital, 228 Ark. 205, 306 S.W.2d 313 (1957); McArthur v. Smallwood, 225 Ark. 328, 331, 281 S.W.2d 428 (1955); Hogue v. Housing Authority of North Little Rock, 201 Ark. 263, 144 S.W.2d 49 (1940).

" Venhaus, 285 Ark. at 27, quoting Walden v. Hart, 243 Ark. at 652 (in turn quoting State v. Davis, 178 Ark, 153, 10 S.W.2d 513 (1928)).

8 Walden, supra.

The Honorable Andy Davis
State Representative
Opinion No, 2013-037
Page 6

Question 4 - Does SB968 violate Judge Piazza’s injunction that states the board can’t require doctors to “show a need” to obtain the permit to sell medications?

No. The injunction was issued following the circuit court’s conclusion that A.C.A. § 17-19-102(d) (Repl. 2010) was unconstitutional. The statute was amended by Act 1169 of 2013, as explained above. This act is prospective and is presumed constitutional.'* In the event of a challenge, the burden of proving otherwise will rest on the challenger.’> The presumption of constitutionality will continue to attach to A.C.A. § 17-19-102(d), as amended by Act 1169 of 2013, unless and until a litigant obtains an express ruling by a court declaring the amended statute unconstitutional.

Deputy Attorney General Elisabeth A. Walker prepared the foregoing opinion, which I hereby approve.

Sincerely,

USTIN MCDANIEL
Attorney General

DM/EAW:cyh

'* See generally Bunch v., State, 344 Ark. 730, 43 S.W.3d 132 (2001).

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