Court overturns attorney fees award in case between ex-pharmacist, Pharmacy Board

A pharmacist convicted of producing and distributing adulterated drugs was not entitled to attorney fees in his case against the Indiana Board of Pharmacy, which was entitled to immunity, the Court of Appeals of Indiana has ruled.

The Court of Appeals on Thursday reversed the Marion Superior Court’s entry of judgment against the Indiana Board of Pharmacy and its members and an award of attorney fees, remanding with instructions to enter judgment in favor of the appellants and to vacate the award of attorney fees to appellee Paul Elmer.

Elmer, who owned and operated Pharmakon Pharmaceuticals in Noblesville, was a practicing pharmacist when he distributed and produced adulterated drugs that led to the lives and well-being of multiple patients, including several infants in neonatal intensive care units, being jeopardized.

One infant received a dose of morphine “25 times” stronger than the dose on the label. Doctors were able to save the baby by administering three different doses of Narcan.

The United States Food and Drug Administration launched an investigation, during which Elmer told his pharmacists to lie for him.

Elmer’s attempt to cover up his production and distribution of adulterated drugs brought a federal grand jury to a 10-count indictment. He was convicted in April 2019, according to the Indianapolis Business Journal, and was sentenced to more than two years in federal prison.

The 7^th Circuit Court of Appeals upheld that sentence in November 2020.

Meanwhile, the state initiated a summary-suspension proceeding against Elmer’s pharmacist license in July 2017. A year later, Elmer let his license expire, and the Indiana Board of Pharmacy ultimately revoked that license.

The Marion Superior court granted Elmer’s subsequent motion for judicial review and ordered the pharmacy board to dismiss the administrative action, then later denied his request for attorney fees. The Court of Appeals affirmed in June 2021, finding no statutory basis to revoke an expired license.

The trial court later denied Elmer’s motion for attorney fees but granted the board’s motion to dismiss an underlying 42 U.S.C. § 1983 claim. It also dismissed Elmer’s claim for injunctive relief as moot, and his claims against the board and its members.

However, the trial court later granted Elmer’s motion to correct error, vacating its prior order and awarding Elmer fees and costs. The trial court determined the state had ignored Elmer’s right “to be free from government harassment” by continuing the action without any statutory basis.

On appeal, the board and its members argued the trial court erred in granting Elmer’s motion to correct error. They claimed they were entitled to absolute quasi-judicial immunity, and the Court of Appeals agreed.

“Although in Elmer I we ultimately determined that the Board lacked statutory authority to revoke an expired license, the Board has broad authority to adjudicate matters relating to pharmacists’ licenses,” Judge Cale Bradford wrote. “… Elmer has failed to establish that the Board members acted in complete absence of all jurisdiction.”

The COA also determined the trial court erred in entering judgment in favor of Elmer on his Section 1983 claims against the board, noting the board is not a “person” subject to a Section 1983 suit.

The second issue the appellants raised was whether the trial court abused its discretion in awarding Elmer attorney fees pursuant to both 42 U.S.C. § 1988 and Indiana Code § 34-52-1-1.

The COA found error in that ruling, writing, “While the Board ultimately did not prevail in its attempt to revoke Elmer’s license due to a lack of statutory authority to revoke an expired license, we cannot say that the State’s attempt to do so was frivolous. It is clear that the Board had a very compelling interest in pursuing whatever potential avenues it had available to it to ensure that Elmer would never again hold a pharmacist license in Indiana.

“Although Elmer argues that the events that led to his federal convictions are irrelevant to this discussion, we disagree, as they speak directly to the Board’s motives in the litigation, undercutting any suggestion that the Board’s intent was primarily to harass or maliciously injure Elmer,” Bradford concluded.