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manatt manatt I phelps I phillips Elianna Florido January 4, 2019 Page 2 203—Transport of Hazardous Waste to an Unauthorized Point The inspection report alleges that Rite Aid's processing of warfarin through reverse distribution to MedTurn is improper on the basis that MedTurn is not authorized by DTSC to receive hazardous waste. As a preliminary matter, and as detailed in a number of recent return to compliance responses, Rite Aid objects to this alleged violation regarding the reverse distribution of pharmaceuticals on the basis that it violates the terms of the settlement entered into between Rite Aid and various counties in California, including San Joaquin County (settlement agreement is attached as Exhibit 2). Specifically, Section 4.2.b of the settlement states that: During the term of this Final Judgment, the People shall only pursue a violation of this Final Judgment or applicable law regarding the reverse distribution of pharmaceuticals if Defendant is unable to demonstrate reasonable diligence in performing work on the federal regulatory reform described in subparagraph 4.2.a above. For the purposes of this paragraph, "pharmaceuticals"shall have the same meaning as "drug"as defined by the Federal Food, Drug, and Cosmetic Act, 21 USC§321(g). As a signatory to the settlement agreement, San Joaquin County is bound by its terms. See e.g. Lerner v. L.A. City Bd. of Ed., 59 Cal. 2d 382, 398 (1963) (finding that "agents of the same government are in privity with each other, since they represent not their own rights but the right of the government."); see also People v. Sims, 32 Cal. 3d 468, 486-88 (1982) (same). Rite Aid has actively participated in both state and federal regulatory reform regarding the reverse distribution of pharmaceuticals and therefore this demand for information regarding Rite Aid's handling of expired warfarin or Coumadin through reverse distribution is improper and in violation of the terms of Rite Aid's settlement agreement. However, without waiving the foregoing objection, Rite Aid responds as follows: this violation is without merit because the items identified in the inspection report (warfarin sent to MedTurn for return processing) is not a waste, and therefore a permit from DTSC authorizing MedTurn to receive hazardous waste from Rite Aid is not required. As described in previous correspondence from Rite Aid, Rite Aid's pharmacy return procedures are entirely consistent with EPA's policy on pharmacy reverse distribution (see RO 11606 (May 16, 1991)), and also has the added benefit of both (1) sustainably and appropriately consolidating and managing pharmacy items for return to manufacturer or other final disposition, and (2) avoiding diversion of pharmaceuticals.