G.R. No. 182358 ; February 20, 2013
DEPARTMENT OF HEALTH, THE SECRETARY OF HEALTH, and MA. MARGARITA M. GALON, Petitioners, vs. PHIL PHARMA WEALTH, INC., Respondent.

FACTS

The Department of Health (DOH) issued Administrative Order (AO) No. 10, which empowered its Accreditation Committee to recall, suspend, or revoke the accreditation of government pharmaceutical suppliers. Following a Bureau of Food and Drugs (BFAD) report finding respondent Phil Pharmawealth, Inc.’s (PPI) products unfit for human consumption, DOH Undersecretary Ma. Margarita M. Galon directed PPI to submit a written explanation. PPI failed to comply within the given period, sending only a belated letter stating it had referred the matter to its lawyers. Consequently, Undersecretary Galon suspended PPI’s accreditation for two years. PPI filed a complaint before the Regional Trial Court (RTC) seeking to nullify the DOH issuances and the suspension order, and claiming damages. The RTC dismissed the case, ruling that the state could not be sued without its consent and that the public officials were acting in their official capacities.

ISSUE

Whether the petitioners, the Department of Health and its officials, may be sued in this instance, thereby rendering the trial court’s dismissal of the complaint erroneous.

RULING

No, the petitioners cannot be sued. The Supreme Court affirmed the dismissal, upholding the doctrines of state immunity from suit and immunity of public officials from suit for official acts. An unincorporated government agency like the DOH, performing governmental functions, enjoys immunity and cannot be sued without express legislative consent. The officials, Secretary of Health and Undersecretary Galon, were also improperly sued. The complaint alleged that the suspension of PPI’s accreditation was done pursuant to AO No. 10 and related memoranda, which are official issuances. The act of suspending accreditation based on a BFAD report and for failure to submit an explanation was clearly within their official functions and scope of authority. The suit, which sought to annul these official issuances and the implementing order, and to claim damages arising from their implementation, was effectively a suit against the state. The defense of immunity was properly raised via a motion to dismiss. The Court clarified that a public official may be sued in a personal capacity only if the act was done with malice, in bad faith, or beyond the scope of authority. The complaint contained no such factual allegations, merely characterizing the acts as illegal or arbitrary. Therefore, the RTC correctly dismissed the case for lack of jurisdiction.