Fifth Circuit Vacates DEA Registration Revocation for Pharmacy

United Sta tes Court of Appeals f or the Fifth Circuit ________ ____ No. 25 - 60068 ________ ____ Neumann’s Pharm acy, L.L.C., Petit ioner, versus Drug Enf orcem e nt Admin istrat ion, Respondent. ________ ____ ___ _____ _______ ___ Petition for Re view of an Order of the Drug Enf orcement Age ncy Agenc y No. FN43 73 293 ________ ____ ___ _____ _______ ___ Before Elrod, Chief J udge, and Richman and Willett, Circuit Judges. Don R. Wi llett, Circuit Judge: Under the Contro lle d Substan ces Act, the Dru g Enf orc emen t Admin istration plays a vital r ole in p rotectin g the public from drug m isuse and dive rsion. F ederal courts p lay a di ffer ent role: ensuri ng that, whe n an agency exercise s the autho rity Con gress h as granted, it adheres t o the statutes an d regu lation s that bind it. W hen an age ncy claims to apply United S tates Court of A ppeals Fifth Circuit FILED February 13, 2026 Lyle W. Cayce Clerk Case: 25-60068 Document: 62-1 Page: 1 Date Filed: 02/13/2026

No. 25 - 6006 8 2 governing text but instead su bstitutes a d ifferen t rule of decisio n, we do not defer — we s et the action asid e. 1 That is this case. The D EA r evoked N euman n’s Pharma cy ’s registratio n to dis pense co ntrolle d substance s based on the agen cy’s profes sed application of two regulation s and Louisiana law. The D EA unque stionably has broad autho rity to de register pharmacies and s ubstantial discretio n to sh ape po licy with in statu tory bo unds. But it may not sa y it is applyin g existing regulation s while quie tly rewr iting the m in practice. Becau se the D EA ’s decisio n rest s on interp retation s the go vernin g texts will not bear, we VA CA TE the de registration order and REMAND for further proce edings con sistent with this o pinion. I. Backgr ound A. The Controlled Substances Act “Sho rtly after taking o ffice in 1 969, Preside nt Nixon d eclared a national ‘war on drugs.’” 2 As it s ope ning salvo, “Con gress se t out to en act legislat ion that w ould consolidate various dr ug laws o n the boo ks into a compr ehensive statu te, pro vid e meaningf ul regulation over le g itimate source s of dr ugs to pre vent diversio n into il legal channels, and stre ngthen law enfo rcement tools against the traffic in illicit drugs. ” 3 The result was the Compreh ensiv e Drug Abus e Preve ntion a nd Cont rol Act of 197 0 — Title II of wh ich is the Contro l led Substan ces Act (CSA). 4 “[T]he CSA creates a ________ ____ ___ _____ _ 1 See 5 U.S.C. § 706(2)(A) (“T he rev iewing c ourt sh all. . . set aside ag ency acti on, findings, and conclusions f ound to be.. . arbitrary, cap riciou s, an abuse of d iscretion, or otherwis e not in ac cord ance with la w[.]”). 2 Gonzales v. Raich, 545 U. S. 1, 10 (2005) (c itation omitt ed). 3 Id. 4 Pub. L. 91 – 5 13, 84 Stat. 123 6, 1242 (19 70). Case: 25-60068 Document: 62-1 Page: 2 Date Filed: 02/13/2026

No. 25 - 6006 8 3 compr ehensive, closed reg ulatory r egime criminalizin g the un authorized manuf acture, d istribution, dispe nsing, and p osses sion of substan ces classified in any of the Act’s five schedules.” 5 As relev ant her e, t he CS A requi r es “[e]v ery p erso n wh o disp enses. . . any controlle d substan ce” to “obtain from the Attorne y Gener al a re gistration.” 6 T he statu te dire cts the A ttorney General to “registe r practitione rs (inclu ding ph armacie s, as distin guishe d from pharm acists) to dis pense. . . controlle d substances. . . if the applicant i s author ized to d ispense. . . controlle d substan ces under th e laws o f the State in wh ich he practices.” 7 H owever, “ [t]he Attorney Genera l may d eny an applicatio n for such registration” if she “determine s that the issuan ce of such re gistration or mo dification w ould be inconsiste nt with the public intere st.” 8 T o guide that dete rmination, th e statute lists five fac tors that “shall be consid ered” “[i] n determin ing the public in teres t”: (A) The recomm endati on of t he approp riate Sta te licensin g board o r profes sional discip linary au thority. (B) The ap plicant’s e xp erience in dispen sing, or cond ucting rese arch with respect to contro lled sub stances. (C) The applicant’ s conviction record under Fede ral or State laws relating to the manu facture, distributio n, or dispen sing of controlle d substan ces. ________ ____ ___ _____ _ 5 Gonzales v. Or egon, 546 U.S. 243, 250 (2006) (cita tions omitted). 6 21 U.S.C. § 822(a)(1). 7 Id. § 823(g)(1). 8 Id. Case: 25-60068 Document: 62-1 Page: 3 Date Filed: 02/13/2026

No. 25 - 6006 8 4 (D) Complian ce with applicable State, Fede ral, or local l aws relating to controlled su bstances (E) Such other conduct wh ich may threaten the public health and safe ty. 9 Once granted, a registratio n “may be su spende d or re vok ed by th e Attorn ey Gene ral upon a findin g that the registran t. . . has comm itted su ch acts as wou ld rende r his registr ation. . . inco nsistent with the p ublic intere st.” 10 In m aking that determi n ation, the At torney G eneral must consid er the same s tatutory factors that govern in itial registrat ion. 11 The Attorn ey Gene ral has deleg ated this r evocation authority to th e Admin istrator of the Dru g Enforce m ent Adm inistration. 12 B. N eumann ’ s Pharm ac y Neumann ’s is a re tail ph armacy located in Tallulah, L ouisi ana. It s owner and p harma cist - in - charge is Laura Neu mann, who has be en licens ed to practice pharm acy in Lo uisiana sinc e 1995. After worki ng fo r s evera l independ ent phar mac ies, Ms. N eumann p urc hased her own phar mac y in 2014 and rena med it N eumann’s P harmac y. Neuman n’s is lice nsed unde r Louisian a law to dispe nse co ntrolle d substan ces and, be fore the pro ceedings at issue h ere, was als o regi st ered un der th e CS A. The DEA began investigatin g Neum ann’ s after re ceiving a ti p that Ms. Ne umann was fillin g presc riptions for he rself. Follow ing that investigat ion, the DEA i ssued Neuma nn’s an order t o show ca use why its ________ ____ ___ _____ _ 9 Id. 10 Id. § 824(a)(4). 11 See id. (providing tha t the Attorney Gener al sh ould a ssess “ the pu blic inter est as determined under [§ 823 ]”). 12 28 C.F.R. § 0.100(b); see H umphreys v. DEA, 96 F.3d 65 8, 6 6 1 (3d Cir. 1996). Case: 25-60068 Document: 62-1 Page: 4 Date Filed: 02/13/2026

No. 25 - 6006 8 5 certifica te of r egistration should not b e revoked. The ord er a lleg ed — and the DEA ultim ately found — that Neum ann’s filled pr escriptio ns w hile disregar ding ce rtain “red flags, ” indicator s su ggesting th at the prescrip tion s may not ha ve be en valid. 13 1. Patient C.E. First, in July, Octobe r, and De cember of 2 0 21, Neu mann’s f illed prescr iptions f or patien t C. E. for both h ydr ocodone acetamin ophen (an opioid) and clo nazepam (a benzodiaze pine). Because of the ir in teract ion when us ed t ogeth er, opioids and be nzodiazepin es form a “drug cocktail.” 14 Like other drug cocktails, o pioid – benzodiaz epine comb inations increase th e risk of overdos e or d eath and are also associate d with d iversion o f controlled substances from law ful to illicit chan nels. At the agency hearin g, Ms. Ne umann testified that sh e addressed th is red flag by reviewi ng the diagn osis codes on th e pre scription s and speaking with C.E. She stated that C.E. was re ceiving h ydrocod one to man age “inj uries or shou lder pain” while switchin g betwe en two specialis ts, and clonaze pam to tr eat anxiety. Sh e furt her t est ifi ed that she did no t beli ev e the ris k of ov erdos e wa s hi gh b ecau se C. E. r ecei v ed onl y a l imited nu mber of prescr iptions. Ms. Neu mann did not, h owev er, docum ent her conversations wi th C. E. or h er resol uti on of this red fla g. ________ ____ ___ _____ _ 13 See Neumann’s Pharmacy, 90 Fed. Reg. 8039, 8040 (Dep ’t of Just., D rug Enf’t Admin. Jan. 23, 2025) (defining “red flags”). 14 In this context, a “drug c ocktail” refers to a c ombina tion of c ontrolled subs tances th at is wid ely known to be a bused or diverted and tha t sign ificantly increas e the patie nt’s ri sk of serio us me dical co nseq uences. Case: 25-60068 Document: 62-1 Page: 5 Date Filed: 02/13/2026

No. 25 - 6006 8 6 2. Patient J.H.R. Next, be tween Septe m ber 2020 and January 2022 Ne umann’ s filled month ly prescriptio ns for p atient J.H.R. for b oth hydr oc odone acetamin ophen and alprazo lam (another benzodiazep ine). Like other opio id – benzo dia zepi ne co mbinat ions, hydr ocodo ne acetaminophe n and alp razolam constitu te a “ drug cocktai l. ” J.H.R. ’s prescriptio ns also r aised a s eparate red flag: although s he used insura nce to pa y for non - controlled substance prescr iptions, she paid o ut of po cket for her co ntroll ed - substance prescr iptions. The DEA ’s expe rt, Dr. DiGi Graham, te stified th at out - of - pock et pay ment s may signal diversion because patie nts sometimes pay cash to avo id the ad dition al scrutiny insure rs apply to preven t abuse. With re spect to the drug cocktail, Ms. Neumann testified that she contacte d the prescr ibing ph ysician, Dr. T.N. — who is also her fathe r — when J.H. R. first became a patient in 201 5. Accordi ng to Ms. N eumann, Dr. T.N. explain ed why he prescrib ed th e combination, and that explanation satisfie d her. Ms. Neu mann docu mented that resolution by making notations on the back of the prescr iptions. She did n ot, h owev er, docu ment any resolu tion fo r the prescrip tions iss ued between 2020 and 20 22 — the prescr iptions at is sue in the agency proc eedin gs. As for the out - of - pocket paym ents, M s. Neumann te stified th at in approx imately March 2 021, J.H.R. ’s insurance co mpany rejected cove rage for one of her presc ripti ons. When Ms. N eumann a sked whether J.H.R. ha d a new insuran ce card, J.H.R. res pond ed t hat she had lost her job and no longer had insura nce. Ms. Neuman n testified that, fr om that point forward, J.H.R. paid out of pocket for all h er prescriptio ns. J.H.R. ’s p ayment records, ho wever, r eflect di ffer ent m etho d s of payment for her contr oll ed - substance pre sc riptions and he r non - contro lled substan ce prescrip tions. The Case: 25-60068 Document: 62-1 Page: 6 Date Filed: 02/13/2026

No. 25 - 6006 8 7 DEA int erpr eted that discrepancy to suggest that J.H.R. maintained insuran ce but paid ca sh for her controlle d substance s. 3. Patient S.W. Finally, on six o ccasions betwee n Octobe r 2020 and De cember 2 0 21, Neumann ’s filled prescrip tions fo r patient S.W. for three dif ferent butalbital - b ased medication s — butalbi tal - asp irin - caffein e, butalbital - - acetamin ophen - caffe ine, and AS COMP with codei ne — along with diazepam. Combination s of butalbital or cod eine with diazep am constitute drug co cktails, and the presenc e of three dif ferent bu talbital formula tions al so raised a d istinct r ed fl ag called “ther apeutic d uplicatio n, ” which occu rs when a patient is prescrib ed “m ultiple co ntrolled s ubstance s that have esse ntially the same effect. ” In a dditio n, S.W. paid fo r her pre scription s out of pocket — another red flag. Ms. Ne umann te stified that sh e spo ke with the presc ribing phy sician, Dr. T.N. — h er fat her — about the p rescriptio ns and was satisf ied with his explan ation. She also testifie d that she knew S.W. live d in the Un ited Kingdo m and ther efor e did not ha ve health insuran ce in the United State s. Ms. Neuma nn did not, ho wever, document e ither r esolution. 4. Ms. Neuma nn’s O wn Presc ript ions In additio n to thes e red - flag - lade n prescriptions f or patie nts, Neumann ’s also fille d a prescrip tion fo r Ms. Ne umann he rself. The prescr iption w as writte n by Dr. T.N. — Ms. Neuma nn’s fa ther — in violation of Louisiana l aw, which deems it unpro fessional condu ct for a physician to prescr ibe contro lled substan ces to a fam ily membe r, including a child. 15 Ms. Neumann testified that she had pr eviously filled the same prescr iption at ________ ____ ___ _____ _ 15 See La. Admin. Code tit. 46, pt. XL V, § 7603 (A)(11). Case: 25-60068 Document: 62-1 Page: 7 Date Filed: 02/13/2026

No. 25 - 6006 8 8 another pha rmacy without issu e, even after Louisian a a dopt ed the prohibi tion on prescribing con trolled s ubstance s to family members. C. Agency Pro ceedings At a two - day hearing befo re an administrative law judge (ALJ), each side p rese nted on e fa ct wi tness and on e exper t wi tness. The G ove rnme nt began its case w ith Grou p Supervi sor Th eresa Bass, who had cond uct ed the investigat ion into Neu mann’ s. Th e ALJ found Bass “a cre dible, r eliable witness.” T he Government’s e xpert witness was Dr. DiGi Gr aham, a license d pharmacist based in Oklahoma. N euman n’s did not object to qualify ing Dr. Graham as an expe rt in “Louis iana pharm acy practice, includin g the ap plicable standard s of care in Louisiana fo r the dispensing o f contro lled substances within the usual course of pharmacy practice.” The ALJ fou nd “Dr. Graha m’s testi mony t o be fully credib le and reliable.” Neumann ’s first w itness w as Dr. Julie A kers, a Washington - based pharm acist and pr ofessor at th e Washington State Un iversity Schoo l of Pharmacy and Pharmaceu tical Scie nces, who was qu alified w ithout o bjection as an exp ert “in the s tandard o f care and prof essional re spon sibility requ ired of a ph armacy in Louisiana pursuan t to the governin g federal an d state of Louisian a rules an d regu lations. ” T he ALJ found “th at Dr. Aker s had limited reliability as an e xpert,” in part becau se her testimony was “at tim es, unc lear and contradict ory. ” Accordingly, t he A LJ credited Dr. Graham’s test imony ov er Dr. Ak er s’s wh ere t he t wo dis agr eed. Ms. Ne umann also tes tified, an d the most relevan t portion s of her test imony a re r ecou nt ed ab ove. H owev er, the ALJ found t hat “Ms. Neumann ’s testimony had diminishe d credibility” becau se she was “guarded a nd not f orth coming.” Th e ALJ theref ore gav e “Ms. Neu mann’s testimo ny little we ight.” Case: 25-60068 Document: 62-1 Page: 8 Date Filed: 02/13/2026

No. 25 - 6006 8 9 After t he hea ri ng, t he A LJ issued a 41 - page recommen dation, m aking extens ive fin dings of fact and ultimate ly conclud ing that Ne umann’s violated sever al provisio ns of s tate and fede ral law and th at deregistrat ion was an approp riate sanc tion. In a 33 - p age order of her own, t he A dminis tra tor “adop t[ed] and incorpora te[d ] b y r efe rence the ent irety of ” the ALJ ’s analysis, “an d summari ze[d] a nd cla rifi e[d] porti ons thereof.” 16 According ly, she deregist ered Neuma n n’s and “de n[ied] a ny pendi ng appl icat ions of Neuman n’s. . . t o renew or modify [its] registratio n, as well as any other pend ing applicatio ns of Ne umann’s. . . for additio nal regis tratio n in Louisian a.” 17 II. Stand ard of Rev iew The CSA v est s the Att orne y Gen era l —an d, by dele gation, the Admin istrator — with broad d iscretion to deregister p harmacie s. 18 “[W]hen an agen cy exercis es discre tion granted by a statute, judicial re view is typ ically condu cted under the Adminis trative Pr ocedure Act’ s deferen tial arbitrary - and - capric ious standard.” 19 “Un d er that stan dard, a court asks n ot whethe r it agrees with the age ncy de cision, but rathe r only whether the agency action was reaso nable and reasonably ex plained.” 20 ________ ____ ___ _____ _ 16 Neumann’s Pharmacy, 90 Fed. Reg. at 8039. 17 Id. at 8048. 18 See Oregon, 5 46 U.S. at 292 (S cal ia, J., dissenting) (“Sec tions 823 (f) and 824(a) exp licitly gran t the Atto rney G enera l the au thority to r egis ter and dereg ister physic ians, and his dis cretion in e xercis ing that a uthority is sp elled out in very broad terms.”). 19 Seven C nty. Infrastruc ture Coal. v. Eagle C nty., 605 U.S. 168, 179 – 80 (2025). 20 Id. at 180 (citations om itted). Case: 25-60068 Document: 62-1 Page: 9 Date Filed: 02/13/2026

No. 25 - 6006 8 10 That de ference, however, has l imits. “E ven if the sub stance o f an agency ’s decision is beyond review as d iscretion ary, an agency’s failure to follow its own regulation s may be challenge d under th e APA.” 21 We theref ore “will not he sitate to overtu rn age ncy action as arbitra ry and capricious if the agen cy fails to ‘comp ly with its own regulations. ’” 22 By contras t, t he DEA ’s factual deter mination s are “conclusive” so long as they are “supported by substantial evidence.” 23 III. Discuss ion Neuman n’s p rincipally contend s that the DEA m isinterp reted its own re gulations and Lou isiana law. We agree. And because th ose errors requ ire vacatur, w e do n ot reach t he altern ative argum ents th at the ________ ____ ___ _____ _ 21 Ellison v. Connor, 153 F.3d 247, 252 (5th C ir. 1998); see Fort Stewart S chs. v. FLRA, 49 5 U.S. 64 1, 654 (19 90) (“It is a fam iliar ru le of adm inistra tive law that an agency must a bide by its own reg ulations.” (c itations omitted)). 22 N at’l Biodiesel B d. v. EPA, 843 F.3d 1010, 1018 (D.C. C ir. 2016) (quoting Environmentel, LLC v. FCC, 661 F.3d 80, 85 (D.C. Cir. 2011)); accord N.M. Farm & Livestoc k Bureau v. U.S. Dep’t of Inte rior, 952 F.3d 1216, 1231 (10 th Cir. 20 20) (“ When a n agenc y do es not c omply with its own regula tions, it acts arbitrarily an d capric iously.” (citation omitted)); Conserva ncy of Se. F la. v. U.S. Fish & Wi ldlife Serv., 6 77 F.3d 1073, 1078 n.10 (11th Cir. 2012) (“ An a gency’ s failur e to follow its own regula tions is arbitra ry and caprici ous.” (citation omitt ed)). The DEA does not invoke deference under Bowle s v. Se minole Rock & San d Co., 325 U.S. 410 (19 45), an d Auer v. Robbins, 519 U.S. 452 (199 7). We therefore decline to consider whether such def erence might otherwise apply. See Or tiz v. McDonough, 6 F.4th 1267, 1275 (Fed. Cir. 2021) (dec lining to d ecide whether Semi nole Rock / Auer d ef er en ce app lied “ because the Secr etary does not invok e the do ctrin e”); Ro binson K nife Mfg. Co. v. CIR, 6 00 F.3d 121, 134 n.11 (2d Cir. 201 0) (“[T]he Commi ssioner ha s not arg ued Auer d e fe r e nc e, so an y s u ch ar gu m e nt is fo r fe i t ed. ”); cf. Ho llyFrontier Cheyeene Refin., LLC v. Renewable Fuels A ss’n, 594 U.S. 382, 39 4 (2021) (“declin [ing] to c onsider wh ether any defere nce might be due” under Ch evron v. Nat ural Resources Defense Council, I nc., 467 U.S. 837 (1984), b ecau se “the govern ment [was ] not invok ing Chevr on ”). 23 21 U.S.C. § 877. Case: 25-60068 Document: 62-1 Page: 10 Date Filed: 02/13/2026

No. 25 - 6006 8 11 dere gistration order was arbitrar y and cap ricio us, unsupported by substantial evid ence, or violat iv e of due process. A. The Corresponding - Responsibility Regulation First, Ne umann’ s challen ges the DEA ’s inte r pretation of 21 C.F.R. § 1306.0 4(a). That re g ulation place s primary “ respons ibility for th e proper prescr ibing and dispe nsing of con trolled substances” on the prescribing physic ian, while imp osing a “corre sponding responsib ility” on “ the pharm acist who fills th e prescr iption.” 24 Section 1306.04(a) provides: A prescription fo r a controlled substance to be effective m ust be issued for a legitimate medical purpo se by an individ ual practitio ner actin g in the us ual cours e of his prof ession al prac- tice. Th e responsibility for th e proper pre scribing and dispe ns- ing of co ntrolle d subs tances is up on the pr escribin g practi- tione r, but a cor responding respons ibility rest s with the p har- macist wh o fills the pr escriptio n. A n order pur porting to be a prescr iption iss ued n ot in the usual course of professio nal treat- men t or in legitimate an d autho rized resear ch is not a pr escrip- tion w ithin the m eaning and inten t of sectio n 309 of th e Act (21 U.S.C. 82 9) and the person knowi ngly fil ling such a purp orted prescri ption, as w ell as the person issuing it, shall be s ubje ct to the pe nalties provide d for violatio ns of th e provisions of law re - lating to contro lled sub stances. 25 Read as a w hole, the regulatio n impo ses liabi lity o n a pharm acist only if thre e conditi ons are met: the pharmacist (1) fi lls (2) an in valid presc riptio n (3) knowingl y. Neuma nn’s do es not disput e that it fi lled the presc riptions at issue, so the first re quirement is satisfied. But w e agree with Neum an n’s th at the DEA misapplie d the reg ulation’ s second an d third re quirements. ________ ____ ___ _____ _ 24 21 C.F.R. § 1306.04(a). 25 Id. Case: 25-60068 Document: 62-1 Page: 11 Date Filed: 02/13/2026

No. 25 - 6006 8 12 1. Invalidity The f irst issue is straig htforw ard. By its terms, § 1306.04(a) applies only wh en a pharmacist fills “such a purported prescription ” — a clear refer ence t o th e regulatio n’s e arlier descrip tion o f “[a]n or der purp orti ng to be a pre scription issued n ot in th e usual cour se of p rofession al treatment or in legitimate and authorize d rese arch.” 26 P ut sim ply, a pharmacist violate s § 1306.04(a) only by fill ing a prescript ion that was invalid w hen issued — th at is, one written outside t he prescribin g physician’s u sual course of profe ssional p ractice. Here, neith er the Admi nistra tor nor t he ALJ m ade that findin g. The y did no t analyze whet h er the prescribing phy s ician issued the pr escriptio ns outside the u sual cou rse of professiona l practice. In stead, the y focused exclusive ly on whether Neumann’s dis pensed the pre scription s “ outside the course of profession al practice” for a pharmacy. T hat inqui ry ma y be relev ant u nder § 1306.06, as discussed below. But it is irrelevan t unde r the plain tex t of § 1306.04(a). B y findi ng a violat ion of § 1306.04(a) without fi r st determi ning that any pre scription w as invalid when issued, the DEA misapplie d the regulatio n. 2. Kn owled ge The s econd i ssu e re quir es mor e ext ens ive analysis. Sectio n 1306.04(a) appli es only when a “ person know ingly fill[s]” an invalid prescriptio n. 27 T he DEA, ho wev er, ha s “long int erpret ed [§ 1306.04(a)] as prohibitin g a pharm acist from f illing a pr escriptio n for a c ontrolled substance when he eithe r ‘know s or has reas on to know that the prescriptio n was n ot written for a ________ ____ ___ _____ _ 26 Id. 27 Id. (e mphasi s added). Case: 25-60068 Document: 62-1 Page: 12 Date Filed: 02/13/2026

No. 25 - 6006 8 13 legitimate medical pu rpose.’” 28 Neumann ’s challe nges th at interp retation as incon sistent w ith the regulation’s te xt. On this point as well, Neuman n’s ha s the better argument. The dispute turn s on t he scope of the regulation ’s mens rea requir em ent: wh ether “knowi ngly” modif ies only th e act of filling a prescription, or whether it also extends to the pre scription ’s invalidity. T he D EA ’s interpre tation adop ts the for mer v iew — treating knowle dge o f invalidi ty as un necessary. T hat readin g canno t be square d with the text, for sever al reasons. A s the Supreme Court explai ned in Flores- Figuer oa v. Un ited St ates, “wher e a transitive verb ” — here, “fills” — “has an obje ct, listene rs i n most conte xts assume th at an adver b (such as knowingly) th at modifies the transiti ve verb tells the listene r how th e subject p erfor med the entir e action, including t he obje ct as set forth in the s entence.” 29 The Co urt illustra ted th e point w ith a simple exam ple: “[i]f a child kno wingly takes a toy th at belon gs to his s ibling, we assume that the ch ild not o nly knows th at he is taking some thing, but th at he also kn ows th at what he is taking is a toy and that the toy belongs to his sib ling.” 30 As t he C ourt noted, “[s]im ilar examples aboun d,” while “dissimilar examples are not easy to find.” 31 Thus, “[a ]s a matter o f ordin ary E nglish gramma r, it se ems natural to read the ________ ____ ___ _____ _ 28 JM Pharmacy Grp., 80 Fed. Reg. 28667, 28670 (D ep’t of J ust., Drug E nf’t Admin. May 19, 2015) (empha sis add ed) (quotin g Medic - Ai d Pharm acy, 55 Fed. Reg. 30043, 30044 (Dep’ t of Jus t., Dru g Enf’t Adm in. July 24, 1990)). 29 556 U.S. 646, 650 (2 009) (emph asis ad ded). 30 Id. at 651 (emphasis in origina l). 31 Id. Case: 25-60068 Document: 62-1 Page: 13 Date Filed: 02/13/2026

No. 25 - 6006 8 14 [regu lation’s ] word ‘knowin gly’ as apply ing to all the subs equen tly listed elements of t he [v iola tion].” 32 That prin ciple is not “an overly rigid rule of statutory construction.” 33 Conte xt always m atters. 34 But t he cont ext her e unders c ores — rather than under min es — the natural gr ammatica l readin g. Although § 1306.0 4(a) is not itself a crimina l statute, a “[v]i olation i s a crimina l offense, a nd often a f elony, under 21 U.S.C. § 841. ” 35 And background prin ciples of crimin al law strongl y supp ort apply ing the know ledge require m ent to each elemen t of the violatio n. T he “de eply rooted pres umpt ion” i s tha t the Governm ent must “prov e th e defe nda nt’ s mens rea with respe ct to each elem ent of a fed eral offens e. ” 36 To be sure, Congress or an age ncy may so metim es as sign differ ent men tal states to different elem ents. 37 But “courts o rdinarily re ad a phrase in a crimin al st atute that in troduce s the e lements of a c rime with the word ‘knowingly’ as applying that word to e ach element.” 38 The S upr eme Court h as even applied that pre sumptio n where doing so wa s not “[t] he most ________ ____ ___ _____ _ 32 Id. at 650; see a lso id. at 657 (S calia, J., concu rring in pa rt an d con curr ing in the ju dgment) (“ Ordina ry Englis h usa ge su pports th is read ing, as the Court’ s numerou s samp le sente nces amp ly demons trate.”). 33 Id. at 65 9 (Alito, J., co ncurrin g in pa rt an d concurri ng in t he judg ment). 34 Id. 35 Oregon, 546 U.S. at 261 (ma jority op inion). 36 Wooden v. United Stat es, 595 U.S. 360, 378 (2022) (Kavanaugh, J., concu rring) (c itations omi tted); see B ryan A. Garner & A ntonin Scalia, Readi ng Law 303 (2012). 37 See United States v. B ailey, 444 U.S. 39 4, 406 (19 80). 38 Flores - Figueroa, 5 56 U.S. a t 652 (maj ority opinion) (c ita tion omitte d). Case: 25-60068 Document: 62-1 Page: 14 Date Filed: 02/13/2026

No. 25 - 6006 8 15 natural gramm atical readin g.” 39 That is un necess ary her e, b ecau se the presum pt ion m erely c onfi rms what the te xt already says in o rdinary English. Finally, dicta from our de cision in Uni ted State s v. H ayes st rongly suppo rts apply ing the know ledge re quiremen t to the fact of the prescr iption’s invalidi ty. 40 Although Hayes dealt w ith § 1306. 04(a)’s validity rather than its preci se meaning, th e court ob served that § 1306. 04(a) appl ies when the pharm acist “ knows the practitione r issue d [the purpor ted prescriptio n] in othe r than the u sual cour se of me dical treatment.” 41 And it wen t on to explain that “[v]erific ation by the is suing practi tioner on request of the pharm acist. . . is not a n insurance p olicy agai nst a fac t find er’s co n cluding that the pharmacis t had the requisite knowledge,” but “is evide nce that the pharm acist lacks knowledge that the prescription was issued outside the scope of professi onal practi ce.” 42 This discussio n presuppose s what a close analy sis of the te xt confirms independ ently: a pharm acist violates § 1306.04(a) only i f s he know s the p rescription w as invalid. The Gov ernment off er s a meag er, half - heart ed d efens e of th e DEA ’s interp retation, suggesting that th e agency simply “eq uated the ‘know[ed ge]’ nece ssary fo r liability unde r section 1306.04(a) [with] ‘w illful blindn ess.’” But while “[t]he doctrine of willful blindness ” — which pr events defenda nts from “es cap[ing ] the r eac h of” a statute requir ing kno wledge “by delibe rately shielding themselve s from clear evidence of critical facts” — “is well established in crim inal law,” 43 it differs fu ndame ntally from t he standard ________ ____ ___ _____ _ 39 See United States v. X - Citement Video, Inc., 513 U.S. 64, 68 (199 4). 40 595 F.2d 258 (5th Cir. 1979). 41 Id. at 259 – 60 (empha s is ad ded). 42 Id. at 2 60 (empha sis add ed). 43 Global - Tech Appli ances, Inc. v. SEB S.A., 5 63 U.S. 75 4, 76 6 (2011). Case: 25-60068 Document: 62-1 Page: 15 Date Filed: 02/13/2026

No. 25 - 6006 8 16 the DEA applied he re. Willfu l blindn ess has “ two bas ic requ ireme nts: (1) The def endant m ust subje ctively be lieve th at there is a high p robabili ty that a fact e xists and (2) th e defen da nt must take delibe rate action s to avoid learnin g of that fact.” 44 It “is a ‘ subje ctive state of mind.’” 45 By cont rast, the standard the DEA emplo yed is objective, asking w hether th e pharmacist “has re ason to know th at the pres cription was not wr itten for a le gitimate medical purpose.” 46 Thus, ev en if willful blind ness s atisf ies § 1306.04(a), 47 it does not fo llow tha t the DEA ’s interpr etation i s consistent w ith the regulatio n. The Gove rnment also note s that the statute go vernin g deregistratio n, 21 U.S.C. § 824, does not have a sci enter requi reme nt of it s own. But that is a red herring. “It is ‘a simple but fundamental rule of administrative la w’ that reviewing c ourts ‘must judge the propri ety of [agenc y] a ction sol ely by the grounds invok ed by th e agenc y.’” 48 Here, o ne of thos e grou nds wa s the DEA ’s conclusio n that Neumann ’s violated § 1306.0 4(a) — a conclusio n reache d through a misinter pretation of the regulation. W hile it may be that the DEA could have dereg istered N euma nn’s without r elyi ng on t his interp retation of § 1306.04(a), it d id not do so. And we c annot “af firm[] t he ________ ____ ___ _____ _ 44 Id. at 7 69. 45 United Sta tes v. Sta dtmauer, 620 F.3d 23 8, 255 (3d Cir. 201 0) (q uoting United States v. One 1973 Rol ls Royce, 43 F.3d 79 4, 808 (3d Cir. 199 4)). 46 Neuma nn’s Pharmacy, 90 Fed. Reg. at 8047 (quoting JM Pharm acy Grp., Inc., 80 Fed. Reg. 286 67, 286 70 (Dep ’t of Jus t., Drug E nf’t Admin. May 19, 2015)). 47 See Gl obal - Tech A ppliances, 563 U.S. at 768 (n oting “th e long h istory of willf ul blindne ss an d its wid e accepta nce in the Federal Judi ciary”). 48 Calcutt v. FD IC, 59 8 U.S. 623, 624 (2023) (per curiam) (alteration in original) (quotin g SEC v. Ch enery Corp., 332 U.S. 19 4, 196 (1947)). Case: 25-60068 Document: 62-1 Page: 16 Date Filed: 02/13/2026

No. 25 - 6006 8 17 [DEA ’s] sanctio ns against p etitione r based on a legal ratio nale d iffere nt from the one adop ted by t he [DEA ].” 49 B. The U sual Course o f Prof e ssional Practice The DEA also found that Neumann ’s violated 2 1 C.F.R. § 130 6.06, which require s a pharmacist to fill p rescriptio ns only “in the usual co urse o f his pro fessional pr actice,” 50 on the theory that Neumann’ s failure to r esol ve certain red flags fell “beneath the L ouisiana standard of care.” 51 Equatin g the usual cou rse of profe ssional p ractice with the state - law s tandar d of ca re was legal error. The phr ase “course of professional practice” in § 1306.06 is borrowed f rom the CSA itself. 52 A nd the te rm in th e CSA is “direc tly traceable to the Harrison Act, which prohib ited ‘any person’ from distributin g coca leaves or opiu m ‘except in pursuance of a written order ’ issued by a practition er ‘in the course of his professio nal practice only.’ ” 53 Under the Sup rem e Co urt’ s Ha rris on Act preced ent s, t he phra se “r efer[r ed] to ‘ bona fide medical practice,’ which meant that any prescription issued ‘in good f aith’ qualifie d as an auth orized ac t of dis pensing one of the dr ugs proscribed by the statute.” 54 ________ ____ ___ _____ _ 49 Id. 50 21 C.F.R. § 1306.06. 51 See Neumann’ s Pharmacy, 90 Fed. Reg. a t 8044 (“Th e Agency. . . finds tha t there is subs tantial re cord evidenc e that Resp onden t’s dispens ing fell be low the Lo uisia na stand ard of care, and thus was outsi de the usual course of professio nal practice.” (emph asis added)). 52 See 21 U.S.C. § 802(21). 53 Ruan v. United States, 597 U.S. 450, 478 (20 22) (Alito, J., concurr ing in th e jud gment) (cita tion om itted). 54 Id. (citations omitted) Case: 25-60068 Document: 62-1 Page: 17 Date Filed: 02/13/2026

No. 25 - 6006 8 18 Where “a term of art” is “obviously transplan ted from another legal source, it brings the old soil with it.” 55 Accordin gly, whe n the CSA and its impleme nting re gulations used the phr ase “course o f his profes sional practice,” they presumably used the phrase in the same s ense ascribed to it in the Supreme Cou rt’s Harrison Act prece dents. 56 Absent some indication to the contrary, the phrase “course of his profession al practice” includes filling p rescrip tions in good faith w ithin t he bona fid e op erati ons of a pharmac y. The Suprem e Court’s decisi on in United States v. Moore fur ther suppo rts that con clusion. 57 The d efen dant in M oore “c oncede[d ]. . . that he did not observe generally accepted medical practices.” 58 But after findin g that “the scheme of the statute. . . reveals an in tent to limit a register ed physic ian’s dispen sing authority to the cou rse of his ‘profession al practice,’” the Moore Cou rt explained that “the u nderstand ing that [a physician ] is author ized only to act ‘as a physician’” is “[i]mplicit in. . . registrat ion.” 59 It also e xpressly tied this co nclusion to th e CSA ’s us e of the ter m “in the course of profe ssional practice or research.” 60 Und er Moore, then, a physic ian acts in th e co urse o f his profe ssional practice e ven if he deviate s from the standard of care, so long as he acts “as a physician.” There is no principle d reason the same phrase would not also co ver a ph armacis t who ________ ____ ___ _____ _ 55 George v. McDono ugh, 596 U.S. 740, 746 (2022) (clean ed up). 56 See Ruan, 597 U.S. at 478 (Alito, J., c oncur ring in the j udgmen t) (“Nothing in the CSA s ugges ts that Congr ess in tended to dep art from the pree xisting u ndersta ndin g of ac tion ‘in the cours e of prof ession al pr actice.’ ”). 57 423 U.S. 122 (1975). 58 Id. at 126. 59 Id. at 140 – 41. 60 Id. at 141. Case: 25-60068 Document: 62-1 Page: 18 Date Filed: 02/13/2026

No. 25 - 6006 8 19 deviate s from th e standard of care b ut neve rtheless continue s to act “as a pharm acist.” Our decis ion in Un ited States v. Colli er illustrate s the same poin t. 61 We explain ed that th e same language “ restric t[s]” a phy sician “to di spen sing or prescr ibing drugs in the bon a fide tre atment of a patien t’s d isease, ” meanin g that he “canno t sell dr ugs to a de aler no r distr ibute dr ugs inte nded to cater to cravings of an addict” “under the guise of treatment.” 62 And in rejectin g a right - to - privacy ch alle nge to the CSA and its implem enting regulatio ns, Collier explained th at the statute and re gulations “bar[] on ly activitie s outside the physician ’s pro fession al practice, wh ere a physician acts, in essence, as a ‘pusher.’” 63 The DEA ’s “standard of care” interpretatio n o f “the usual course of his professional practice ” is in tension not only w ith the history of the phr ase as a term o f art and the interpre tations in Moore and Coll ier, but also with the Supreme Court’s decis ion in Gonzales v. Orego n. 64 The Co urt explaine d that the CSA “regulates medical practice” only “ insofar as it bars doctors from using th eir pre scriptio n - writing powe rs as m eans to engage in illicit d rug d ea ling and tr afficking.” 65 “Bey ond this,” the Court conti nued, “the statute manife sts no intent to regulate the practice of medicine generally. ” 66 T hus, if § 1306.0 6 w ere interprete d to inco rporate the state - law stan dard o f care, it would risk exceed ing t he DEA ’s statutory auth ority under th e CSA. ________ ____ ___ _____ _ 61 478 F.2d 268 (5 th Cir. 19 73). 62 Id. at 271 – 72. 63 Id. at 27 4. 64 546 U.S. 243. 65 Id. at 2 69 – 70. 66 Id. at 270. Case: 25-60068 Document: 62-1 Page: 19 Date Filed: 02/13/2026

No. 25 - 6006 8 20 Finally, adoptin g the DEA ’s inte rpretation w ould, as Justi ce Alito has observed, co nvert every act o f negligen ce unde r state law in to a federa l fel ony. 67 It would elide the differen c e between actin g as a bad pharm acist and ceasing to act as a p harmacist at all. 68 In part fo r that reason, each o f our sister circuits that h as addre ssed the is sue has concluded th at falling be low the standard of care is insuff icient to establis h actio n outsid e the course of pro fessional practice. 69 To be sure, th ose de cisions (like the decisio ns discu ssed above) dealt w ith physician s, not pharmacists. And they consid ered uses of the phrase “course of his professio nal practice” without the modif ier “usu al.” But it is hard to se e how either differenc e could transf orm the meaning of a settled term of art so dramatica lly as to make every violation of state - law stan dards of care a fed eral of fense. We there fore conclud e that a violatio n of the s tate - law stand ard of c are, standing alone, is not su fficient to establi sh a viola tion o f § 1306. 06. C. Louisiana ’ s Ba n on Prescribing to F amily Members In additio n to re gulato ry violat ions, th e DEA also found th at Neumann ’s violate d a provision of the Louisian a Admin istrative Code, which makes it unprof ession al conduct for “physicians” to “prescribe contro lled substances for themselve s or their immediate family members” — includin g, as rele vant he re, “the phy sician’s. . . child ren.” 70 The rec ord does not ma ke clear whe ther this f inding se rved only to bolster the DEA ’s conclus ion that Ne u mann’ s deviated fr om the state - law standard of care or instead operated as an indepen dent basis f or the DEA ’s conclusion that ________ ____ ___ _____ _ 67 See Ruan, 597 U.S. at 479 (Alito, J., conc urring in t he judgment). 68 Id. (emphas is in origina l). 69 See United States v. Feingold, 454 F. 3d 1001, 1011 (9 th Cir. 2006) (c ollecting cases). 70 La. Ad min. Code, tit. 4 6, p t. XLV, § 7603(A)(11). Case: 25-60068 Document: 62-1 Page: 20 Date Filed: 02/13/2026

No. 25 - 6006 8 21 Neumann ’s failed to “[c]om pl[y] with applicab le State, F ederal, or local law s relating to controlled substance s” — a separ ate factor th e DEA ma y consid er in decid ing whe ther to revoke a re gistration. 71 If t he DEA relied on t he Louis iana law to find a deviation from th e state - law st andard of c are, that was e rror for t wo reasons. First, as ex plained above, a d eviatio n fro m the state - law stan dard of care is not sufficie nt to establish that a phys ician o r pharm acist acte d outside th e usual c ours e of profe ssional p ractice. S econd, again as explaine d above, a violati on of § 1306.04(a) requir es knowledge of the pres cription’ s invalidity, and the final agency orde r acknowle dge s th at Ms. Neumann w as not aware of th e proh ibition o n prescribin g contro lled substances to family member s. 72 But eve n if the D EA relied on th e Louisiana law as an i ndepend ent basis for dere gistration, it e rred b ecause the allege d misconduct falls outside the provis ion’s cle ar sc ope. By its terms, the provision ap plies on ly to the act of “pre scrib[ing] controlled substan ces” — not to filling th e resultin g prescr iptions — and only whe n perfor m ed by a “physici an[]” — n ot by a pharmac y. 73 Because Neumann’s is a phar macy, n ot a phy sician, an d bec aus e it filled a p rescript ion rather th an pre scribin g a contro lled substan ce, its condu ct does no t fall within the p rovision ’s reach. D. Remedy That leave s the question o f remedy. “[V ]acatur o f an agency actio n is the default rule in this Circuit,” 74 though “[i]n r are cas es. . . we d o not ________ ____ ___ _____ _ 71 See 21 U.S.C. § 823(g)(1)(D). 72 See Neumann’s Pha rmacy, 90 Fed. Reg. at 8046 (f ind ing “Ms. Neumann’s.. . lack of knowledge” to be an a ggravating f actor warra nting deregistra tion). 73 La. Ad min. Code, tit. 4 6, p t. XLV, § 7603(A)(11). 74 Cargill v. Garlan d, 57 F.4th 447, 472 (5 th Cir. 20 23) (e n banc). Case: 25-60068 Document: 62-1 Page: 21 Date Filed: 02/13/2026

No. 25 - 6006 8 22 vacate the action but instead remand for the agency to corre ct its errors. ” 75 H ere, h ow ever, the Gove rnment d id not ar gue that r emand witho ut vacatur is appro priate, and any such argument is ther efore for feit ed. 76 Accordingly, we will vac ate the deregistr ation o rder. Neuman n’s urges us to go one ste p further an d vacate w ithout remand ing to the DEA. It conte nds that rejecti ng the D EA ’s errors “means destroyi ng the entire t heory of this revoca tion proceed ing,” leaving “nothing to remand.” We di sa gree. “ Generally speaking,” when an agency adjud ication produces a decision th at lie s within an agency’ s discretio n but re st s on impermis sibl e reasoning, “a cour t of appeal s should r emand [the] case to an agency for decision of a matte r that statutes place primarily in agency hands.” 77 T he DEA ’s deregis tration aut hority “is sp elled o ut in very broad terms.” 78 Al though the D EA ma y not rely on i ts erro neous interp retation s of §§ 1306.04(a) and 1306.06 or its misap plicat ion o f Louisian a law, it is possible that the a gency could reach th e same r esult base d on a co rrect inte rpretation of those provisions — or based on one of t he other factors liste d in § 823(g)(1). We expr ess no v i ew on wheth er s uch a res ult would b e warranted. W e hold only t hat the a gency s hould have the oppo rtunity to m ake that de termination in the first inst ance. ________ ____ ___ _____ _ 75 United St eel v. Mine Safety & H ealth Admin., 925 F.3d 1279, 1287 (D.C. Cir. 2019). 76 See D ata Mktg. P’ ship, LP v. U.S. DOL, 45 F.4th 846, 860 (5 th Cir. 20 22) (“Th e Depa rtment ma kes no d evelop ed arg umen t that the distric t cou rt abu sed its d iscretion in followin g the def ault [vaca tur] ru le, s o the Depa rtment forf eited the argum ent.”). 77 I.N.S. v. Or lando Ventu ra, 537 U.S. 12, 16 (2002) (per cu riam). 78 Oregon, 546 U.S. at 292 (Scalia, J., d issentin g). Case: 25-60068 Document: 62-1 Page: 22 Date Filed: 02/13/2026

No. 25 - 6006 8 23 IV. Conclus ion There is no doubt, as one of the Governmen t’s exper ts testifie d, that pharm acists are often “the last line of defense ” against the diversio n and misuse of c ontroll ed subst ances. But even the most u rgent regulat ory goals do not permi t an a gency to depa rt from t he regulatio ns it has adopte d while claiming to enforce the m. The D EA may pursue stricter stand ards th rough lawful m eans; i t may not do so by misre ading t he re gulations that gov ern th is case. Becau se th e D EA ’s de cis ion rests on erro neou s interpr etation s of its regulatio ns and a mi sapplica tion of L ouisi ana law, w e VACATE the dere gistration o rder and REMAND for further proceed ings con sistent with this opi nion. Case: 25-60068 Document: 62-1 Page: 23 Date Filed: 02/13/2026