After judges, regulatory reform has been the Trump administration’s main conservative policy goal. On the campaign trail, the president trumpets regulatory cutbacks and warns that Joe Biden, if elected president, would regulate American life “into oblivion.” So why is President Trump’s Justice Department levying regulatory threats against one of America’s most prominent companies on the eve of the election?
Last week, Walmart filed a remarkable lawsuit in federal court. It accused the Justice Department of making lawless demands of the company: attempting to commandeer the company’s pharmacists as deputy law enforcement officers against opioid abuse, without any basis in federal law. And it asked a federal judge to declare that the Justice Department cannot force Walmart to pay immense financial settlements to avoid indictment.
The complaint contains explosive allegations: that federal prosecutors offered no evidence of actual criminal wrongdoing by Walmart yet “declared their intention to ‘embarrass’ Walmart” with a criminal indictment “to pressure the company into paying a massive civil penalty”; that a federal prosecutor cited Walmart’s $1 billion in charitable giving last year as evidence of what Walmart could afford to pay the Justice Department; and that the office of the U.S. Attorney for the Eastern District of Texas threatened to send a prosecutor around the country lobbying other prosecutors to file other cases against Walmart if the company didn’t pay up.
These are just allegations, of course, and any lawsuit’s allegations should not be taken at face value. But at least two aspects of this case suggest that these allegations should be taken seriously: First, a company like Walmart is not normally in the business of filing preemptive lawsuits against the government, especially ones that preannounce that the company faces a risk of criminal indictment; and second, the lawsuit was co-signed by Michael Carvin, one of the nation’s most prominent conservative constitutional litigators, at a firm that also employs President Trump’s former White House counsel, Don McGahn, and his former solicitor general, Noel Francisco.
According to the lawsuit, the Trump Justice Department is pressuring Walmart to require its pharmacists to investigate and police doctors’ prescriptions for opioids. Specifically, Walmart alleges that federal prosecutors demand that Walmart’s pharmacies should investigate doctors’ opioid prescriptions, and refuse to fill the prescriptions pending those private investigations, based on “red flag” factors that the Drug Enforcement Agency “believes may indicate that a prescription might not have been issued for a legitimate medical purpose.” These “red flags” are not actually laws—not statutes, and not even regulations. They’re simply the stuff of agency “guidance”—informal nonbinding statements of agency policy; indeed, many of these “red flags” were simply “identified by DEA in a series of slideshow presentations delivered at industry conferences,” according to Walmart.
The actual law defining pharmacists’ duties is very different. The Controlled Substances Act states that controlled substances may not be “dispensed” by a pharmacy “without the written prescription of a practitioner.” And the regulations promulgated by the DOJ and DEA make more specific requirements: An order for drugs that is “issued not in the usual course of professional treatment or in legitimate and authorized research” does not qualify as a lawful “prescription”; and, most importantly for Walmart’s purposes, a person who “knowingly” fills an illegitimate prescription is liable for criminal penalties.
That is the key term, for this federal law: knowingly. Pharmacists must not fill prescriptions that they know are illegitimate. Short of that limited standard, pharmacists are not required by federal law to intervene in the doctor-patient relationship; they certainly are not required to act as deputy DEA agents, investigating prescriptions that do not meet that narrow requirement of federal law. Indeed, to micromanage doctors’ prescriptions would open up Walmart to violations of state law for the unauthorized practice of medicine, as the Wall Street Journal notes in an editorial.
In its lawsuit, Walmart protests that its pharmacies already undertake “stewardship” practices beyond the narrow requirements of the Controlled Substances Act and DEA regulations, to train pharmacists and educate patients. And Walmart freely agrees that opioid abuse is a “public health crisis” crying out for greater law enforcement—“DEA’s and DOJ’s duty is to keep those drugs off the streets and to find and punish the criminals who push them.” But Walmart accuses the law enforcement agencies of trying to “outsource” the job that they themselves have “failed to do.”
These allegations of abusive conduct by federal agencies would be explosive in any administration. But they are particularly ironic during this particular administration. For four years, the Justice Department has taken the lead in a laudable effort to promote regulatory reform and curb regulatory abuse, especially the abuse of “guidance” documents. It has promulgated regulations limiting the agency’s own use of non-legal “guidance” documents in law enforcement. And it recently published the proceedings from a Justice Department “summit” on regulatory reform, in which leading DOJ officials called for regulatory reform, and calling on other agencies to follow the DOJ’s “efforts to combat inappropriate uses of guidance, including by instituting a policy that Department attorneys would not use their civil or criminal enforcement authority to convert other agencies’ guidance into rules that have the force or effect of law”—that is, precisely the kind of abuse that Walmart now accuses the DOJ’s own prosecutors of perpetrating.
Walmart’s complaint is replete with other abuses that conservative regulatory reformers often criticized in the Obama administration. For example, the federal agencies here are eagerly disregarding federalism, trying to steamroll state regulators’ own longstanding power to regulate the practice of medicine within their respective borders.
But most worrisome is the federal prosecutors’ eagerness to commandeer Walmart, turning the private company into a tool of government—from a retailer to a regulatory chokepoint. Indeed, the conduct alleged in Walmart’s complaint resembles the Obama Justice Department’s “Operation Choke Point,” in which the DOJ and financial regulators leveraged regulatory threats against banks, trying to force the banks to execute Obama administration policies against gun dealers and payday lenders.
We already have seen the Justice Department file one politicized lawsuit, U.S. v. Google, on the eve of the presidential election; a lawsuit against Walmart, demanding huge financial payments on dubious regulatory claims, would mark a trend. The Trump administration began with a call to “deconstruct” the administrative state, but might end with an effort to weaponize it.