The Supreme Court granted the petition and dismissed the civil case, upholding the defense of state immunity. The Department of Health (DOH) validly invoked state immunity as an unincorporated government agency performing sovereign functions. The DOH suspended the accreditation of a pharmaceutical company after its products were found to be unfit for human consumption. The company sued the DOH secretaries and undersecretary involved, but the court found their actions were in the performance of official functions, so state immunity extended to protect the government from financial liability that could result from the suit.
Original Description:
poli digest
Original Title
Digest 03 - DOH v Phil PharmaWealth - GR 182358 - February 20 2013
The Supreme Court granted the petition and dismissed the civil case, upholding the defense of state immunity. The Department of Health (DOH) validly invoked state immunity as an unincorporated government agency performing sovereign functions. The DOH suspended the accreditation of a pharmaceutical company after its products were found to be unfit for human consumption. The company sued the DOH secretaries and undersecretary involved, but the court found their actions were in the performance of official functions, so state immunity extended to protect the government from financial liability that could result from the suit.
The Supreme Court granted the petition and dismissed the civil case, upholding the defense of state immunity. The Department of Health (DOH) validly invoked state immunity as an unincorporated government agency performing sovereign functions. The DOH suspended the accreditation of a pharmaceutical company after its products were found to be unfit for human consumption. The company sued the DOH secretaries and undersecretary involved, but the court found their actions were in the performance of official functions, so state immunity extended to protect the government from financial liability that could result from the suit.
DEPARTMENT OF HEALTH, THE SECRETARY OF HEALTH, and MA. MARGARITA M.
GALON versus PHIL PHARMAWEALTH, INC.
GR 182358 February 20, 2013 FACTS: - Petition for Review on Certiorari assailing the decision of the CA and denying the petitioners’ motion for reconsideration - DOH Secretary Romualdez issued AO 27 – o setting the guidelines and procedure for accreditation of government suppliers of pharmaceutical products for sale or distribution to the public, such accreditation to be valid for three years but subject to annual review. - DOH Secretary Romualdez issued AO 10 amending AO 27 – o accreditation period for government suppliers of pharmaceutical products was reduced to two years and such accreditation may be recalled, suspended or revoked after due deliberation and proper notice by the DOH Accreditation Committee, through its Chairman. - DOH Secretary Romualdez issued AO 66 amending AO 10 (above provision) o two-year accreditation period may be recalled, suspended or revoked only after due deliberation, hearing and notice by the DOH Accreditation Committee, through its Chairman. - DOH issued Memorandum No. 171-C o provided for a list and category of sanctions to be imposed on accredited government suppliers of pharmaceutical products in case of adverse findings regarding their products (e.g. substandard, fake, or misbranded) or violations committed by them during their accreditation. - DOH issued Memorandum 209 (through former Undersecretary Galon) o inviting representatives of 24 accredited drug companies, including Phil Pharmawealth, Inc. (PPI) to a meeting on October 27, 2000. - During the meeting, Galon handed them copies of a document entitled “Report on Violative Products” issued by the (BFAD), which detailed violations or adverse findings relative to these accredited drug companies’ products - the BFAD found that PPI’s products which were being sold to the public were unfit for human consumption. - DOH required explanation but instead PPI gave a letter informing that it has forwarded the letter to their lawyers - DOH suspended the accreditation for 2 years - PPI filed with the RTC a complaint seeking to declare null and void the DOH AOs DOH sought dismissal as the drugs of PPI were found to be substandard for human consumption o RTC dismissed the case declaring the case to be one instituted against the State, in which case the principle of state immunity from suit is applicable. - PPI appealed to the CA o CA reversed the RTC ruling it was premature for the trial court to have dismissed the Complaint CA found that a cause of action was sufficiently alleged – that due to defendants’ (petitioners’) acts which were beyond the scope of their authority, PPI’s accreditation as a government supplier of pharmaceutical products was suspended without the required notice and hearing ISSUES: - Should the Civil Case be dismissed for being a suit against the State? DECISION: - Petition GRANTED - Civil Case DISMISSED Page 1 of 2 RATIONALE: - As a general rule, a state may not be sued. However, if it consents, either expressly or impliedly, then it may be the subject of a suit. There is express consent when a law, either special or general, so provides. - There is implied consent when the state “enters into a contract or it itself commences litigation.” However, it must be clarified that when a state enters into a contract, it does not automatically mean that it has waived its nonsuability. o The State “will be deemed to have impliedly waived its non-suability only if it has entered into a contract in its proprietary or private capacity. o However, when the contract involves its sovereign or governmental capacity, no such waiver may be implied. - DOH can validly invoke state immunity. o DOH is an unincorporated agency which performs sovereign or governmental functions. o DOH can validly invoke the defense of immunity from suit because it has not consented, either expressly or impliedly, to be sued. o An unincorporated government agency without any separate juridical personality of its own enjoys immunity from suit because it is invested with an inherent power of sovereignty - a claim for damages against the agency cannot prosper; otherwise, the doctrine of sovereign immunity is violated. - It is settled that if a Complaint seeks to “impose a charge or financial liability against the state,” the defense of non-suability may be properly invoked. o In the event that PPI succeeds in its suit, the government or the state through the DOH would become vulnerable to an imposition or financial charge in the form of damages. o This would require an appropriation from the national treasury which is precisely the situation which the doctrine of state immunity aims to protect the state from. - The mantle of non-suability extends to complaints filed against public officials for acts done in the performance of their official functions. o the suability of a government official depends on whether the official concerned was acting within his official or jurisdictional capacity, and whether the acts done in the performance of official functions will result in a charge or financial liability against the government public officials can be held personally accountable for acts claimed to have been performed in connection with official duties where they have acted ultra vires or where there is showing of bad faith o Acts imputed against Secretaries Romualdez and Dayrit, as well as Undersecretary Galon, were done while in the performance and discharge of their official functions or in their official capacities, and not in their personal or individual capacities.