COMMUNITY PHARMACIES OF INDIANA, INC. et al v. INDIANA FAMILY AND SOCIAL SERVICES ADMINISTRATION et al

Filing 34

ORDER on 25 Motion for Clarification or Alternatively to Extend the Temporary Restraining Order - The TRO shall remain in full force and effect until after the Court rules on Plaintiff's Motion for Preliminary Injunction following the August 24, 2011 hearing on the preliminary injunction. The TRO shall remain in effect without the posting of bond until the hearing date of August 24, 2011. Signed by Judge Tanya Walton Pratt on 7/22/2011. (TRG)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
COMMUNITY PHARMACIES OF INDIANA, INC.,
and WILLIAMS BROTHERS HEALTH CARE
PHARMACY, INC.,
Plaintiffs,
v.
INDIANA FAMILY AND SOCIAL SERVICES
ADMINISTRATION and its Subdivision, THE OFFICE
OF MEDICAID POLICY AND PLANNING, by and
through PATRICIA CASANOVA, Director,
MICHAEL A. GARGANO, Secretary, and
DAVID TESTERMAN, Director of Medicaid Pharmacy
Program, in their Official Capacities, not Individually,
Defendants.

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ORDER ON MOTION FOR CLARIFICATION OR ALTERNATIVELY
TO EXTEND THE TEMPORARY RESTRAINING ORDER
Plaintiffs having filed a Motion for Clarification or Alternatively to Extend the
Temporary Restraining Order (the “Motion”) regarding the Court’s July 8, 2011 Entry on
Temporary Restraining Order (the “TRO”), and the Court having reviewed the Motion,
Defendants’ Response, and Plaintiffs’ Reply, hereby clarifies and extends the TRO as follows:
Defendants’ oppose extending the TRO in the absence of a bond as required by Federal
Rule of Civil Procedure 65 (c). Defendants argue that the monetary injury faced by the State is
legitimate and worthy of protection. They allege the State is sustaining damages on a daily basis
under the TRO as the dispensing fee reduction was implemented in part because Indiana
Medicaid program was required to produce $212 million in administrative cost savings.
Plaintiffs, on the other hand, emphasize that the original $4.90 dispensing fee reimbursement rate
merely maintains the status quo, as that rate has been in effect for several years. Plaintiffs

contend that the Defendants’ argument that a significant bond is warranted to protect the State’s
financial interests is disingenuous and wrong, in light of the State’s $1.18 billion cash surplus.
The Seventh Circuit has allowed district courts to waive the requirement of a bond in
cases where "the court is satisfied there's no danger the opposing party will incur any damages
from the injunction" or where the "bond would give the opposing party absolute security against
incurring any loss from the injunction that would exceed the applicant's ability to pay, and the
district court balances (often implicitly) the relative cost to the opponent of a smaller bond
against the cost to the applicant of having to do without a preliminary injunction that he may
need desperately." Habitat Educ. Ctr. v. U.S. Forest Serv., et al., 607 F.3d 453, 458 (7th Cir.
2010). And, “under appropriate circumstances bond may be excused notwithstanding the literal
language of Rule 65 (c).” See, Wayne Chemical, Inc. v. Columbus Agency Service Corp., 567
F.2d 692,701 (7th Cir. 1977).
At this time, the Court is not convinced that a bond is appropriate and if indeed a bond is
appropriate, in what amount. Defendants concede that they will be able to recoup some damages
by implementing the rule retroactively, if they succeed on the merits. The purpose of a TRO is to
maintain the status quo until a hearing can be held on a preliminary injunction. Such a hearing
will be held on August 24, 2011. At that time, the parties can present evidence, declarations and
argument on the appropriateness of and costs, if a bond is deemed appropriate by the Court.
IT IS HEREBY ORDERED that the TRO shall remain in full force and effect until after
the Court rules on Plaintiff’s Motion for Preliminary Injunction following the August 24, 2011
hearing on the preliminary injunction.
IT IS FURTHER ORDERED that the TRO shall remain in effect without the posting of
bond until the hearing date of August 24, 2011.

SO ORDERED.

07/22/2011
Date: _____________

DISTRIBUTION:
Debra Ann Mastrian
KRIEG DEVAULT LLP
[e-mail]
Mark W. Bina
KRIEG DEVAULT LLP
[e-mail]
Randall R. Fearnow
KRIEG DEVAULT LLP
[e-mail]
Scott Stuart Morrisson
KRIEG DEVAULT LLP
[e-mail]
Harmony A. Mappes
BAKER & DANIELS - Indianapolis
[e-mail]
Ryan Michael Hurley
BAKER & DANIELS - Indianapolis
[e-mail]
Kate E. Shelby
INDIANA ATTORNEY GENERAL
[e-mail]
Matthew C. Branic
INDIANA ATTORNEY GENERAL
[e-mail]
Wade Dunlap Fulford
Indiana Attorney General
[e-mail]

________________________
Hon. Tanya Walton Pratt, Judge
United States District Court
Southern District of Indiana