Business Law

Bradley v. CVS Pharmacy, Inc. (May 28, 2021, B308040) __ Cal.App.5th __ [2021 WL 2176797]

Doctrine of primary jurisdiction, not exhaustion of remedies, warrants staying litigation to obtain a decision on issues within an agency’s expertise.

CVS Pharmacy stopped filling controlled substance prescriptions for Dr. Kenneth Bradley, a pain management specialist, citing concerns about his prescription patterns. Dr. Bradley sued CVS, seeking an injunction compelling it to fill his prescriptions. The trial court denied the injunction and stayed the litigation, ruling that Dr. Bradley had to exhaust his administrative remedies before the California State Board of Pharmacy. The trial court reasoned that “an order requiring CVS to honor particular prescriptions would involve judgments concerning the statutory obligations of pharmacists that the Board is both expected and equipped to resolve.” Dr. Bradley appealed the denial of injunctive relief and sought review of the exhaustion rationale.

The Court of Appeal affirmed on the “alternative but closely related ground” of primary jurisdiction. The court explained that the exhaustion doctrine applies when a claim is cognizable in the first instance by an administrative agency alone, while the primary jurisdiction doctrine applies when a claim originally cognizable in the courts involves issues within the special competence of an administrative body. The exhaustion doctrine thus applies in any of three situations: (1) a statutory scheme establishes a quasi-judicial administrative tribunal to adjudicate remedies; (2) a private or public organization offers an internal remedy procedure; or (3) a public agency possesses specialized and specific expertise that particularly equips it to resolve the dispute. If the exhaustion doctrine applies, a lawsuit before a court should be dismissed. In contrast, the doctrine of primary jurisdiction permits, but does not require, courts to take advantage of administrative expertise by staying a lawsuit pending an administrative decision. Here, the exhaustion doctrine did not apply because the Pharmacy Board’s governing statutes did not task it with responsibility to adjudicate individual claims for relief against pharmacists—thus it was not the exclusive forum for resolving Dr. Bradley’s claims. However, his claims did implicate the primary jurisdiction doctrine because they presented issues within the Board’s particular expertise, there is a need for regulatory uniformity regarding the adjudication of such claims, and monetary damages would provide Dr. Bradley with an adequate remedy should he eventually prevail. Therefore, the trial court properly exercised its discretion to deny the injunction and stay the litigation until the Board weighed in on the merits of Dr. Bradley’s claims.

The bulletin describing this appellate decision was originally prepared for the California Society for Healthcare Attorneys (CSHA) by H. Thomas Watson and Peder K. Batalden, Horvitz & Levy LLP, and is republished with permission.

For more information regarding this bulletin, please contact H. Thomas Watson, Horvitz & Levy LLP, at 818-995-0800 or htwatson@horvitzlevy.com.

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