Shepards Discount Drugs Inc. v. Louisiana Wholesale Drug Co Inc

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF LOUISIANA

LAFAYETTE DIVISION

SHEPARDS DISCOUNT DRUGS INC CASE NO. 6:24-CV-00735

VERSUS JUDGE ROBERT R.

SUMMERHAYS

LOUISIANA WHOLESALE DRUG CO MAGISTRATE JUDGE CAROL B.

INC WHITEHURST

REPORT AND RECOMMENDATION

Before the Court is Defendant’s, Louisiana Wholesale Drug Co., Inc.

(“LWD”), Rule 12(b)(6) Motion to Dismiss for Failure to State a Claim. (Rec. Doc.

10). Plaintiff, Shepards Discount Drugs, Inc. (“Shepards”), opposes the Motion

(Rec. Doc. 19), and LWD replied (Rec. Doc. 20). The Motion was referred to the

undersigned magistrate judge for review, report, and recommendation in accordance

with the provisions of 28 U.S.C. § 636 and the standing orders of this Court.

Considering the evidence, the law, and the arguments of the parties, and for the

reasons fully explained below, it is RECOMMENDED that LWD’s Motion to

Dismiss be GRANTED in part and DENIED in part.

Factual Background

Shepards filed the present action on May 31, 2024, seeking damages and

injunctive relief alleging violation of the Louisiana Unfair Trade Practices Act

(“LUTPA”) and breach of contract. (Rec. Doc. 1). On July 26, 2024, LWD filed the

Motion to Dismiss (Rec. Doc. 10) presently before the Court.

According to the Complaint, Shepards is an independent community retail

pharmacy in Columbia, Mississippi, who contracted with LWD to provide

pharmaceuticals. (Rec. Doc. 1, ¶¶ 10 & 17). Per Shepards, LWD was their primary

wholesaler and the only wholesaler from whom they ordered controlled substances.

(Id. at ¶ 17). As a wholesale distributor, LWD maintains a compliance department

that is responsible for onboarding new pharmacies and monitoring the dispensation

of controlled substance medications. (Id. at ¶ 19). Shepards contends that “LWD’s

Compliance Department fails to adhere to the best compliance policies promulgated

by the DEA and other regulatory agencies” and “does not follow its own compliance

agreements.” (Id. at ¶ 21).

Per Shepards, LWD requires all of its retail pharmacies to complete annual

Customer Site Survey which includes signing a Compliance Agreement Form. (Id.

at ¶ 24). Shepards reviewed and signed said Compliance Agreement Form annually.

(Id.). The Compliance Agreement Form reads, in pertinent part, as follows:

• (“Customer”) agrees that it will abide by all applicable laws,

rules, regulations, ordinances and guidance of the federal Drug

Enforcement Administration (DEA), the United States Food and

Drug Administration (FDA), and the states into which it

dispenses controlled substances and the states in which it is

licensed. Customer agrees that if will not dispense controlled

substances if it suspects that a prescription is not issued for a

legitimate medical purpose or in the normal course of

professional practice.

• Customer will provide to LWD any information regarding its

dispensing and/or distribution of controlled substances which LWD

may need to evaluate Customer’s compliance with DEA or State

regulations. LWD reserves the right in all cases to terminate sales of

controlled substances to customers that do not meet LWD’s Standards

of Compliance.

• Customer agrees to make LWD its Primary Controlled Substance

supplier for any/all Controlled Substance products purchased. The

Primary CS supplier/Backup CS supplier should reflect at least

95% to 5% ratio, for all CS products that said store has in stock.

(emphasis is original).

• Customer agrees to itself monitor and be alert to the proper usage of

controlled drugs dispensed by it, and to exercise due diligence to ensure

the legal compliance by its prescribers and patients with applicable laws

and regulatory guidelines. Customer is expected to exercise its

professional knowledge and expertise to keep current on all such legal

and regulatory guidelines.

• Customer shall notify LWD Compliance with any pending or previous

State Board action, DEA investigation or Compliance related issues.

Failure to do so, will subject customer to termination of controlled

substance ordering privileges.

(Rec. Doc. 1-4).

Notably, the Compliance Agreement Form also provides that “LWD reserves

the right in all cases to terminate sales of controlled substances to customers that do

not meet LWD’s Standards of Compliance” and that the customer “agrees that

failure to comply with this Agreement may result in the termination of the

relationship between LWD and Customer…” (Rec. Doc. 1, ¶ 26; see also Rec. Doc.

1-4). Shepards maintains that it never received any document regarding LWD’s

“Standards of Compliance” referenced in the Compliance Agreement Form. (Rec.

Doc. 1, ¶ 27). Shepards also signed a Controlled Substance Dispensing Agreement

and a Subscription Agreement both of which detailed certain requirements and

expectations of the business relationship. (Id. at ¶¶ 20 & 28).

According to Shepards, “LWD arbitrarily terminated [Shepards’] ordering

privileges following an alleged increase in its purchase of opiates over a 6-month

period.” (Id. at ¶ 30). Specifically, “[o]n or about September 8, 2023, Brad Stevens,

an LWD Compliance Officer, sent an e-mail to [Shepards] regarding a flag for

growth of Hydrocodone 10 MG tabs. [Shepards] provided a timely response

addressing the concerns.” (Id. at ¶ 32). On September 12, 2023, LWD Compliance

Officers conducted an in-person site visit whereat they informed Shepards that it was

a top purchaser of opiates. (Id. at ¶ 33). Shepards contends that the Compliance

Officers also informed them that “the ratio between his [controlled substance]

purchases and other pharmaceutical purchases was below the 15% [controlled

substance] perimeter set by LWD—i.e., [Shepards’] controlled substances purchases

were less than 15% of its total drug purchases.” (Id.).

On September 21, 2023, Shepards received an email from an LWD

Compliance Officer asking them to “document everything in support of [their]

hydrocodone numbers” and notified Shepards that they would like to see a decrease

in their hydrocodone numbers. (Rec. Doc. 1, ¶ 35; see also Rec. Doc. 1-8). The email

did not cite any specific rules, regulations, policies, target numbers, or violations

with respect to opiates or hydrocodone or indicate that failure to decrease numbers

was in violation of any of LWD’s Standards of Compliance. (Id.).

Per Shepards, they kept their controlled substance purchases to under 15% of

their total purchases. (Id. at ¶ 38). In February 2024, LWD informed Shepards that

they were under the 15% threshold for total controlled substance sales but that its

sales of opiates had increased. (Id. at ¶ 40). On February 26, 2024, LWD terminated

Shepards’ controlled substance ordering privileges effective March 1, 2024. (Id. at

¶ 41; see also Rec. Doc. 1-9). Shepards contends that the termination e-mail falsely

stated that they had been emailed, visited, and notified via telephone regarding its

high volume of ordering and dispending opiates and that it had a history of

documented violations. (Rec. Doc. 1, ¶¶ 42-43). Shepards denies having a history

of documented violations with LWD or any other state or federal regulatory agency.

(Id. at ¶ 43).

As a result of the termination, Shepards asserts that its customers were

prejudiced with many of them experiencing disrupted access to their medications

and they were forced to refer customers to competitor pharmacies. (Id. at ¶ 45).

Shepards was also placed on Mallinckrodt’s, a drug manufacturer, Suspicious Order

Monitoring (“SOM”) list “resulting in [Shepards] being unable to buy

pharmaceuticals from Mallinckrodt at a price that was commercially viable for

Shepards’] customers.” (Id. at ¶ ¶ 48-50). In sum, Shepards maintains that “LWD

seeks to hide its own incompetence regarding [controlled substance] monitoring and

compliance by creating false accusations of non-compliance and terminating its

customer-pharmacies’ [controlled substance] ordering privileges.” (Id. at ¶ 53). Per

Shepards, LWD’s actions constitute a violation of LUTPA and beach of contract.

Shepards seeks damages as well as injunctive relief to enjoin LWD from “unlawfully

enforcing the termination of [Shepards’] controlled substance ordering privileges.”

(Id. at ¶ 69).

Applicable Law

I. Law applicable to Rule 12(b)(6)

When considering a motion to dismiss for failure to state a claim under

F.R.C.P. Rule 12(b)(6), the district court must limit itself to the contents of the

pleadings, including any attachments and exhibits thereto. Collins v. Morgan Stanley

Dean Witter, 224 F.3d 496, 498 (5th Cir. 2000); U.S. ex rel. Riley v. St. Luke's

Episcopal Hosp., 355 F.3d 370, 375 (5th Cir. 2004). The court must accept all well-

pleaded facts as true and view them in the light most favorable to the plaintiff. In re

Katrina Canal Breaches Litigation, 495 F.3d 191, 205 (5th Cir. 2007) (internal

quotations omitted) (quoting Martin K. Eby Constr. Co. v. Dallas Area Rapid

Transit, 369 F.3d 464, 467 (5th Cir. 2004)); Baker v. Putnal, 75 F.3d 190, 196 (5th

Cir. 1996). However, conclusory allegations and unwarranted deductions of fact are

not accepted as true, Kaiser Aluminum & Chemical Sales v. Avondale Shipyards,

677 F.2d 1045, 1050 (5th Cir. 1982) (citing Associated Builders, Inc. v. Alabama

Power Company, 505 F.2d 97, 100 (5th Cir. 1974)); Collins v. Morgan Stanley, 224

F.3d at 498. Courts “are not bound to accept as true a legal conclusion couched as a

factual allegation.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)

(quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)).

To survive a Rule 12(b)(6) motion, the plaintiff must plead “enough facts to

state a claim to relief that is plausible on its face.” Bell Atlantic, 127 U.S. at 570. The

allegations must be sufficient “to raise a right to relief above the speculative level,”

and “the pleading must contain something more . . . than . . . a statement of facts that

merely creates a suspicion [of] a legally cognizable right of action.” Id. at 555

(quoting 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235-

36 (3d ed. 2004)). “While a complaint . . . does not need detailed factual allegations,

a plaintiff’s obligation to provide the grounds of his entitlement to relief requires

more than labels and conclusions, and a formulaic recitation of the elements of a

cause of action will not do.” Id. (citations, quotation marks, and brackets omitted;

emphasis added). See also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). If the

plaintiff fails to allege facts sufficient to “nudge[ ][his] claims across the line from

conceivable to plausible, [his] complaint must be dismissed.” Bell Atlantic v.

Twombly, 127 U.S. at 570.

A claim meets the test for facial plausibility “when the plaintiff pleads the

factual content that allows the court to draw the reasonable inference that the

defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. at 678.

“[D]etermining whether a complaint states a plausible claim for relief . . . [is] a

context-specific task that requires the reviewing court to draw on its judicial

experience and common sense.” Id. at 679. Therefore, “[t]he complaint (1) on its

face (2) must contain enough factual matter (taken as true) (3) to raise a reasonable

hope or expectation (4) that discovery will reveal relevant evidence of each element

of a claim.” Lormand v. US Unwired, Inc., 565 F.3d 228, 257 (5th Cir. 2009)

(quoting Bell Atlantic v. Twombly, 127 U.S. at 556). See also In Re Southern Scrap,

541 F.3d 584, 587 (5th Cir. 2008).

II. LUTPA

LUTPA prohibits “[u]nfair methods of competition and unfair or deceptive

acts or practices in the conduct of any trade or commerce.” La. R.S. § 51:1405.

“[W]hat constitutes an unfair trade practice is determined by the courts on a case-

by-case basis,” as the statute does not specify particular violations. Zeigler v. Hous.

Auth. of New Orleans, 2012-1168 (La. App. 4 Cir. 4/24/13); 118 So. 3d 442, 453.

“A practice is unfair when it offends established public policy and when the practice

is unethical, oppressive, unscrupulous, or substantially injurious.” Id. (citing

Roustabouts, Inc. v. Hamer, 447 So. 2d 543, 548 (La. App. 1 Cir. 1984) (internal

alterations omitted)). “[T]he range of prohibited practices under LUTPA is

extremely narrow, as LUTPA prohibits only fraud, misrepresentation, and similar

conduct, and not mere negligence.” Quality Envtl. Processes v. I.P. Petroleum Co.,

2013-1582 (La. 5/7/14); 144 So. 3d 1011, 1025. “Moreover, conduct that offends

established public policy and is unethical is not necessarily a violation under

LUTPA.” Id. Only “egregious actions involving elements of fraud,

misrepresentation, deception, or other unethical conduct will be sanctioned based on

LUTPA.” Cheramie Servs., Inc. v. Shell Deepwater Prod., 2009-1633 (La. 4/23/10);

35 So. 3d 1053, 1060. Furthermore, “[t]o sustain a cause of action under LUTPA,

two things must be proved: (1) an ascertainable loss was suffered; and (2) the loss

must result from another’s use of unfair methods of competition and unfair or

deceptive acts or practices.” Carroll Insulation & Window Co. v. Biomax Spray

Foam Insulation, 50,112 (La. App. 2 Cir 11/18/15); 180 So. 3d 518, 524.

To support its contention that LWD’s actions violate LUTPA, Shepards

maintains that LWD engaged in unfair and deceptive acts “by having members sign

agreements regarding the distribution of [controlled substance] medications” and

“by terminating [Shepards’] [controlled substance] ordering privileges based on

conduct that was not prohibited or was outside the scope of these agreements.” (Rec.

Doc. 19, p. 11; see Rec. Doc. 1). As noted above, Shepards contends that the

termination e-mail falsely stated that they had been emailed, visited, and notified via

telephone regarding its high volume or ordering and dispending opiates and that it

had a history of documented violations, and Shepards denies having a history of

documented violations with LWD or any other state or federal regulatory agency.

(Rec. Doc. 1, ¶¶ 42-43).

LWD argues that Shepards’ allegations are insufficient to meet the standard

required for a LUTPA claim. (Rec. Docs. 10 & 13). Specifically, LWD notes that

“LUTPA does not prohibit sound business practices, the exercise of permissible

business judgment, or appropriate free enterprise transactions.” (Rec. Doc. 13, p.

9); see also Cheramie, 35 So.3d at 1060. LWD maintains that it was “exercising its

business judgment to cease the sale of controlled substances to a pharmacy that

posed a risk to the company based on DEA diversion and compliance

recommendations.” (Rec. Doc. 13, p. 10). LWD also correctly points out that breach

of contract allegations alone are insufficient to state a claim under LUTPA. See

Turner v. Purina Mills, Inc., 989 F.2d 1419, 1422 (5th Cir. 1993) (“[LUTPA] does

not provide an alternate remedy for simple breaches of contract. There is a great deal

of daylight between a breach of contract claim and the egregious behavior the statute

proscribes.”) (citing State v. Orkin Exterminating Co., 528 So.2d 198, 202 (La. App

4 Cir. 1988)).

The Court finds that Shepards’ allegations fall short of establishing a LUTPA

claim. While Shepards maintains that its controlled substance ordering privileges

were essentially terminated without notice or cause, its Complaint is replete with

allegations regarding the ongoing monitoring and communications LWD had with

them regarding their controlled substance ordering. Specifically, Shepards admits:

• September 8, 2023: An LWD Compliance Officer sent Shepards an e-

mail regarding a flag for growth of Hydrocodone 10 MG tabs. (Rec.

Doc. 1, ¶ 32).

• September 12, 2023: LWD Compliance Officers conducted an in-

person site visit whereat they informed Shepards that it was a top

purchaser of opiates. (Id. at ¶ 33).

• September 21, 2023: Shepards received an email from an LWD

Compliance Officer asking them to “document everything in support of

[their] hydrocodone numbers” and notified Shepards that they would

like to see a decrease in their hydrocodone numbers. (Id. at ¶ 35; see

also Rec. Doc. 1-8).

• February 2024: LWD informed Shepards that they were under the 15%

threshold for total controlled substance sales but that its sales of opiates

had increased. (Id. at ¶ 40).

• February 26, 2024: LWD terminated Shepards’ controlled substance

ordering privileges effective March 1, 2024. (Id. at ¶ 41; see also Rec.

Doc. 1-9).

While Shepards may disagree with LWD’s findings and actions, there is

nothing to suggest that said findings or actions were egregious actions involving

elements of fraud, misrepresentation, deception, or other unethical conduct. See

Cheramie, 35 So.3d at 1060. Accordingly, the Court recommends that the LUTPA

claim be dismissed.

III. Breach of Contract

As an initial matter, the Court notes that in a diversity case, federal courts

must apply state substantive law to the claim at hand. In re Katrina Canal Breaches

Litig., 495 F.3d 191, 206 (5th Cir. 2007). Under Louisiana law, “a breach-of-

contract claim has three ‘essential’ elements: (1) the obligor’s undertaking an

obligation to perform, (2) the obligor failed to perform the obligation (the breach),

and (3) the failure to perform resulted in damages to the obligee.” IberiaBank v.

Broussard, 907 F.3d 826, 835 (5th Cir. 2018)(citing Favrot v. Favrot, 68 So.3d

1099, 1108–09 (La. App. 4 Cir. 2011)).

Shepards alleges they had a contractual relationship with LWD for the

purchase and sale of controlled substances and that LWD breached that contract

when it arbitrarily terminated Shepards’ controlled substance ordering privileges.

(Rec. Docs. 1 & 19). LWD maintains that it was not contractually obligated to

provide controlled substances to Shepards and therefore not liable for terminating

Shepards’ controlled substance ordering privileges. (Rec. Doc. 13).

In Louisiana, the four elements of a valid contract are “capacity, consent, a

lawful cause, and a valid object.” Granger v. Christus Health Cent. La., 2012-1892

(La. 6/28/13), 144 So. 3d 736, 760. Explained another way:

A contract is an agreement by two or more parties whereby obligations

are created, modified, or extinguished. La. C.C. art. 1906. An obligation

cannot exist without a lawful cause. La. C.C. art. 1966. Cause is the

reason why a party obligates himself. La. C.C. art. 1967. Where there

is no “meeting of the minds” between the parties, there is no consent,

thus no enforceable contract.

Ricky's Diesel Serv., Inc. v. Pinell, 2004-0202 (La. App. 1 Cir. 2/11/05), 906 So. 2d

536, 538.

LWD contends there was no contract between the parties. (Rec. Doc. 13).

LWD asserts that “[n]othing in either the Complaint or the ‘Compliance Agreement

Form,’ which [Shepards] asserts is the contract, tends to show that LWD is a party

or ‘obligor’ to the agreement.” (Id. at p. 13). LWD argues that the Compliance

Agreement Form imposes an obligation on the signatory to comply with certain

standards but imposes no reciprocal obligation on the part of LWD. (Id.). LWD

notes that it also never signed the Agreement. (Id. at p. 12). In Louisiana, however,

contracts can be express or implied. Okuarume v. S. Univ. of New Orleans, 2017-

0897 (La. App. 4 Cir. 4/25/18), 245 So. 3d 1260, 1265, writ denied, 2018-0880 (La.

9/28/18), 252 So. 3d 927. “An implied in fact contract rests upon consent implied

from facts and circumstances showing a mutual intention to contract. Consent to an

obligation may be implied from action only when circumstances unequivocally

indicate an agreement or when the law presumes it.” Id. (citing Union Texas

Petroleum Corp. v. Mid Louisiana Gas Co., (La.App. 4 Cir. 2/12/1987) 503 So.2d

159, 165).

In the alternative, LWD contends if a contract existed, it was properly

terminated pursuant to Louisiana Civil Code Article 2024. Article 2024 provides

that “[a] contract of unspecified duration may be terminated at the will of either party

by giving notice, reasonable in time and form, to the other party.” “If reasonable

notice is not given, then the existing contract remains in force and continues to

govern the parties’ relationship.” Stegall v. Orr Motors of Little Rock, Inc., 48,241

(La. 2d Cir. 2013), 121 So.3d 684, 689. Even if a contract has an “at will”

termination provision, however, the terminating party must exercise good faith. That

is,

[i]n order to comply with the requirement of good faith, a party

exercising his right to terminate a contract at will should consider not

only his own advantage, but also the hardship to which the other party

will be subjected because of the termination.

Volentine v. Raeford Farms of Louisiana, L.L.C., 48,219 (La. App. 2 Cir. 7/24/13),

121 So. 3d 742, 754, (citing La. Civ. Code art. 1770, Revision Comment (f)).

Shepards asserts that there are three contracts pertinent to their breach of

contract claim. (Rec. Doc. 19). First, the Subscriber Agreement which required

Shepards to buy 95% of its prescription purchases from LWD. (Rec. Doc. 1-3).

Second, the Compliance Agreement Form wherein Shepards agreed to abide by

certain conditions regarding the purchase and dispensation of controlled substances.

(Rec. Doc. 1-4). And lastly, the Controlled Substance Dispensing Agreement which

provided a checklist regarding the dispensation on controlled substances. (Rec. Doc.

1-5).

Shepards asserts that it is clear from these documents that there was a contract

for the buying and selling of prescription medications, including controlled

substances. (Rec. Docs. 1 & 19). Specifically, Shepards points to the following

Compliance Agreement Form provision: “LWD reserves the right in all cases to

terminate sales of controlled substances to customers that do not meet LWD’s

Standards of Compliance” and that the customer’s “failure to comply with this

Agreement may result in the termination of the relationship between LWD and

Customer…” (Rec. Doc. 1, ¶ 26; see also Rec. Doc. 1-4). Shepards contends that

“this Agreement limits termination of [controlled substance] privileges to the

conditions set forth in the Agreement, none of which were implicated in [Shepards’]

termination.” (Rec. Doc. 19, p. 13). Stated another way, Shepards contends that

LWD was obligated to provide them with controlled substances unless and until

there was a violation of one of the enumerated conditions. Shepards maintains they

did not violate any of the enumerated conditions and thus the termination of their

ordering privileges constituted a breach of contract.

Taking all of the facts in the Complaint as true and viewing them in the light

most favorable to Shepards, the Court finds that Shepards has alleged facts showing

the existence of a contract sufficient to trigger a breach. Further, Shepards has

sufficiently alleged that LWD “undertook an obligation” to provide Shepards with

controlled substances so long as Shepards did not violate the conditions set forth in

the Compliance Agreement. (Rec. Doc. 1); See also IberiaBank 907 F.3d at 835.

Shepards also sufficiently pleaded that LWD “failed to perform the obligation” when

it terminated Shepards controlled substances ordering privileges when Shepards did

not violate the conditions set forth in the Compliance Agreement. (Id.). Lastly,

Shepards sufficiently alleged that it has suffered quantifiable economic loss as a

result of LWD’s termination, namely loss of business. (Id.). Accordingly,

considering the applicable lenient legal standard, it is recommended that LWD’s

Motion to Dismiss be denied as it pertains to Shepards’ breach of contract claim.

IV. Injunctive Relief

Shepards seeks injunctive relief to prevent LWD from enforcing the

termination of Shepards’ controlled substances ordering privileges. (Rec. Doc. 1, ¶¶

68-73). Shepards’ Complaint makes clear that they are seeking a preliminary

injunction. (Id.). Preliminary injunctions are governed by F.R.C.P. Rule 65. The

Fifth Circuit set forth the following standard for issuance of an injunction:

Plaintiffs seeking a preliminary injunction must show: (1) a substantial

likelihood of success on the merits, (2) a substantial threat that plaintiffs

will suffer irreparable harm if the injunction is not granted, (3) that the

threatened injury outweighs any damage that the injunction might cause

the defendant, and (4) that the injunction will not disserve the public

interest. A preliminary injunction is an ‘extraordinary remedy’ and

should only be granted if the plaintiffs have clearly carried the burden

of persuasion on all four requirements.

Nichols v. Alcatel USA, Inc., 532 F.3d 364, 372 (5th Cir. 2008) (cleaned up).

The question for the Court, however, is not whether Shepards is entitled to

injunctive relief at this time, but whether Shepards has sufficiently stated a claim for

injunctive relief. The Court finds that Shepards has not sustained its burden. First,

Shepards has not shown that it has a substantial likelihood of success on the merits.

The Court recommends dismissal of Shepards’ LUPTA count and finds that

injunctive relief is not an appropriate remedy for breach of contract because those

damages can be compensated in money and can be measured by a pecuniary

standard. The Court also questions its ability to force a private company to conduct

business with another private party.

Having found that Shepards failed to allege substantial likelihood of success

on the merits, the Court need not address the remaining factors; however, the Court

also finds that Shepards has not shown a substantial threat that it will suffer

irreparable harm. While Shepards alleged that it was “forced to refer its [controlled

substance] customers to competitors, which undoubtedly resulted in a loss of a

portion of its non-controlled business as well” (Rec. Doc. 1, ¶ 45), there is no

indication that it is in imminent danger of going out of business. Shepards also

points to its “tarnished reputation” and how its “ability to contract with another

wholesale drug distributor is greatly hindered by LWD’s termination of controlled

substance ordering privileges;” however, the Court again finds that this falls short of

irreparable harm. (Id. at ¶¶ 55-56). The Court also finds that while the public has

an interest in not seeing patients’ care disrupted by the sudden termination of access

to needed medicine, the public also has an interest in seeing steps taken to reduce

the risk of dangerous drugs’ diversion or abuse. Accordingly, the Court recommends

that Shepards’ request for injunctive relief be denied at this time.

Conclusion

For the reasons discussed herein, it is recommended that LWD’s Rule

12(b)(6) Motion (Rec. Doc. 10) be GRANTED as to Shepards’ LUTPA claim and

DENIED as to Shepards’ breach of contract claim. The Court also recommends that

Shepards’ request for injunctive relief be denied at this time.

Under the provisions of 28 U.S.C. § 636(b)(1)(C) and Fed. R. Civ. P. 72(b),

parties aggrieved by this recommendation have fourteen days from service of this

report and recommendation to file specific, written objections with the Clerk of

Court. A party may respond to another party’s objections within fourteen days after

being served with of a copy of any objections or responses to the district judge at the

time of filing.

Failure to file written objections to the proposed factual findings and/or the

proposed legal conclusions reflected in the report and recommendation within

fourteen days following the date of its service, or within the time frame authorized

by Fed. R. Civ. P. 6(b), shall bar an aggrieved party from attacking either the factual

findings or the legal conclusions accepted by the district court, except upon grounds

of plain error. See Douglass v. United Services Automobile Association, 79 F.3d

1415 (5 Cir. 1996) (en banc), superseded by statute on other grounds, 28 U.S.C.

$636(b)(1).

THUS DONE in Chambers, Lafayette, Louisiana on this 11% day of October,

(whic &

CAROL B. WHITEHURST

UNITED STATES MAGISTRATE JUDGE

19