Association for Accessible Medicines v. Frosh et al
Filing
101
MEMORANDUM OPINION. Signed by Judge Theodore D. Chuang on 11/21/2019. (ybs, Deputy Clerk)
UNITED STATES DISTRICT COURT
DISTRICT OF MARYLAND
ASSOCIA nON FOR ACCESSIBLE
MEDICINES,
Plaintiff,
v.
BRIAN E. FROSH,
in his official capacity as Attorney General of
Maryland, and
ROBERT R. NEALL,
in his official capacity as Secretary of the
Maryland Department of Health,
Civil Action No. TDC-17-1860
Defendants.
MEMORANDUM OPINION
Pending before the Court is the Motion for Attorney's Fees and Costs pursuant to 42 U.S.C.
S 1988 ("S
1988") filed by Plaintiff Association for Accessible Medicines ("AAM"). Pursuant to
the Court's prior order, the Motion is limited to the question of whether AAM is entitled to
attorney's fees and does not address the amount of attorney's fees that may be due.
reviewed the briefs and submitted materials, the Court finds no hearing necessary.
Having
See D. Md.
Local R. 105.6. For the reasons set forth below, the Motion is GRANTED.
BACKGROUND
In 2017, the Maryland General Assembly enacted a law targeting price gouging in the
generic prescription drug market.
General
S S 2-801-2-803
2017 Md. Laws 4556 (codified at Md. Code Ann., Health-
(LexisNexis 2019)). This law prohibits drug manufacturers or wholesale
distributors from introducing any generic drug price increase that (l) is "excessive and not justified
by the cost of producing the drug or the cost of appropriate expansion of access to the drug to
promote public health," and (2) "[r]esults in consumers for whom the drug has been prescribed
having no meaningful choice about whether to purchase the drug at an excessive price because of
(i) [t]he importance ofthe drug to their health; and (ii) [i]nsufficient competition in the market for
the drug."
Md. Code. Ann., Health-Gen.
SS
2-801(c), (t), 2-802(a) (LexisNexis 2019).
violation of this prohibition may be punished by a civil penalty of up to $10,000. Id
Each
S 2-803(d)(5).
On July 6, 2017, AAM, "a voluntary organization with a membership that consists of
prescription drug manufacturers and wholesale distributors and other entities in the pharmaceutical
industry," filed suit in this Court to challenge the law pursuant to 42 U.S.C.
S
1983. Ass'nfor
Accessible Medicines v. Frosh ("AAM'), 887 F.3d 664,667 (4th Cir. 2018). That same day, AAM
filed a Motion for a Preliminary Injunction to prevent the enforcement of the law against itself and
its members.
AAM argued that the law regulated conduct occurring outside Maryland and so
violated the dormant Commerce Clause of the United States Constitution, and that the law was
void for vagueness in violation of the Due Process Clause of the Fourteenth Amendment to the
Constitution.
The Attorney General of Maryland and the Secretary of the Maryland Department
of Health, Defendants in this case, filed a Motion to Dismiss both counts. The Court (Garbis, J.)
denied the Motion to Dismiss as to the due process count but granted it as to the dormant
Commerce Clause count.
It also denied the Motion for a Preliminary Injunction.
The Court
subsequently entered partial final judgment in favor of Defendants on the dormant Commerce
Clause count pursuant to Federal Rule of Civil Procedure 54(b).
Onappeal, the United States Court of Appeals for the Fourth Circuit reversed, holding that
the law "violates the dormant commerce clause because it directly regulates the price of
transactions that occur outside Maryland." AAM, 887 F.3d at 666. Defendants sought rehearing
2
en bane, but the Fourth Circuit declined. Ass'n/or
Accessible Medicines v. Frosh, 742 F. App'x
720, 721 (4th Cir. 2018). The United States Supreme Court denied Defendants' petition for a writ
of certiorari. Frosh v. Ass 'n/or Accessible Medicines, 139 S. Ct. 1168 (2019). After remand, at
the direction of the Fourth Circuit, this Court entered final judgment in favor of AAM and
permanently enjoined Defendants from implementing the law as applied to transactions occurring
outside Maryland.
AAM then sought leave to file a motion seeking attorney's fees. The Court granted leave
but limited the proposed motion to the question of liability. AAM then filed the instant Motion
for Attorney's Fees.
DISCUSSION
3
(2018). Courts have interpreted this discretionary language to mean that "a prevailing plaintiff
should ordinarily recover an attorney's fee unless special circumstances would render such an
award unjust." Hensley v. Eckerhart, 461 U.S. 424,429 (1983). Such a presumption in favor of
granting attorney's fees serves the purpose of
S
1988 "to ensure effective access to the judicial
process for persons with civil rights grievances." Id.
The special circumstances exception is a "very narrowly limited" one. Doe v. Bd. of Educ.
of Bait. Cty., 165 F.3d 260, 264 (4th Cir. 1998) (citations omitted); cf NY Gaslight Club, Inc. v.
Carey, 447 U.S. 54,68 (1980) (holding, in a Title VII case, that "a court's discretion to deny a fee
award to a prevailing plaintiff is narrow").
circumstances."
"Only on rare occasions does a case present such
Doe, 165 F.3d at 264; see Hescott v. City of Saginaw, 757 F.3d 518,523 (6th Cir.
2014) (holding that "special circumstances should not easily be found"). Courts have noted that
special circumstances may exist where "a postjudgment motion [for attorney's fees] unfairly
surprises or prejudices the affected party," White v. NH Dep't of Emp 't Sec., 455
u.s. 445, 454
(1982); where a self-represented plaintiff who is an attorney seeks attorney's fees, Kay v. Ehrler,
499 U.S. 432, 435-38 (1991); where "the plaintiffs' suit did not vindicate civil rights" because the
harm was remedied before the lawsuit was filed, Lefemine v. Wideman, 758 F.3d 551, 556 (4th
Cir. 2014) (citing Chastang v. Flynn & Emrich Co., 541 F.2d 1040, 1045 (4th Cir. 1976)); where
the prevailing party has already received attorney's fees in the litigation, Little Rock Sch. Dist. v.
Ark. State Bd. ofEduc., 928 F.2d 248,949-50 (8th Cir. 1991); and where a case "involved no broad
civil rights issues," and the plaintiff failed to secure an award of compensatory damages and
"received only nominal damages," Carter v. Burch, 34 F.3d 257,265-66 (4th Cir. 1994).
The losing party bears the burden of demonstrating that special circumstances
exist.
Hescott, 757 F.3d at 523. While meeting this burden does not require the non-prevailing party to
4
identify a case precisely on point, see Doe, 165 F.3d at 264, the party must nevertheless make a
"strong showing" to justify a finding of special circumstances, Hescott, 757 F.3d at 523 (citation
omitted).
Attorney's Fees
II.
As noted, Defendants have effectively conceded that AAM is a prevailing plaintiff for
purposes of
S
1988.
Where this Court entered both final judgment in favor of AAM and a
permanent injunction against Defendants, the Court finds that AAM is such a prevailing party. See
Lefemine v. Wideman, 568 U.S. 1, 4 (2012) (per curiam) ("[W]e have repeatedly held that an
injunction or declaratory judgment, like a damages award, will usually satisfy [the prevailing
party] test.").
Thus, the only remaining question on the Motion is whether any "special
circumstances" exist that would "render ... an award unjust." Hensley, 461 U.S. at 429.
In seeking to make such a showing, Defendants attempt to reframe the Court's inquiry,
arguing that, pursuant to a standard developed by the United States Court of Appeals for the Ninth
Circuit, the Court "should consider' (1) whether allowing attorneys' fees would further the purpose
of
S
1988; and (2) whether the balance of the equities favors or disfavors the denial of fees. '"
Opp'n Mot. Attorney's Fees at 13, ECF No. 98 (quoting Democratic Party of Wash. State v. Reed,
388 F.3d 1281, 1285 (9th Cir. 2004)). However, as AAM points out, the Fourth Circuit expressly
declined to adopt this exact two-factor approach in a dispute over attorney's fees under the
Individuals with Disabilities Education Act ("IDEA"), 28 U.S.C.
SS
1400-1482 (2018), finding
that the approach "contains no real standards and provides no legitimate reason for departing from
the usual rule of awarding reasonable fees to prevailing plaintiffs under fee-shifting statutes." Doe,
165 F.3d at 264 n.2. Significantly, in Doe, the Fourth Circuit stated that "Congress intended courts
to interpret [the IDEA] as they have
S
1988." Id. at 264. The Court is therefore effectively
5
precluded from utilizing this two-factor approach in a motion for attorney's fees under
S
1988.
See id.; Combs ex reI. Combs v. School Bd. of Rockingham Cty., 15 F.3d 357,360 (4th Cir.1994)
(holding that cases interpreting the attorney's fee provisions of the IDEA and
S
1988 "apply the
same principles to determine a plaintiff s entitlement to attorneys' fees").
Nevertheless, the Court may still consider Defendants' substantive arguments relating to
the purpose of
S 1988 and assess
whether they establish special circumstances that would warrant
a denial of attorney's fees. In Doe, the Fourth Circuit in fact relied on an argument relating to the
purpose of the statute in concluding that special circumstances barred an award of attorney's fees
under the IDEA. There, an attorney had successfully represented his son in an IDEA proceeding,
but the court balked at granting the parent-attorney any attorney's fees because doing so "might
well lessen the chance that a disabled child would have the benefit of legal services from an
independent
third party," which would undermine
the fee-shifting
provision's
purpose of
"encourag(ing] effective prosecution of meritorious claims." Doe, 165 F.3d at 263-65.
Defendants similarly argue that special circumstances exist because granting AAM's
Motion will not further the purposes of
S 1988.
Section 1988, they argue, was intended "to ensure
effective access to the judicial process for victims of civil rights violations."
Opp'n Mot.
Attorney's Fees at 14. In this case, they contend, granting attorney's fees would do nothing to
ensure effective access to the judicial process because "lawsuits like this one-brought
pursuant
to the dormant Commerce Clause to impose restrictions on state regulatory authority, and
generating substantial economic benefits to the commercial actors who succeed in enforcing those
restrictions-will
certainly be brought by business interests and trade groups without regard to the
availability of fee-shifting in this case." Id. at 17. Based on a "forward-looking assessment of
6
7
Section 1988 is irrelevant."); ef Herrington v. Cty. of Sonoma, 883 F.2d 739, 744 (9th Cir. 1989)
(per curiam) (holding that the fact that the plaintiff was motivated by "an expectancy of personal
financial gain" was not a special circumstance).
Considering these two lines of cases together, the Court concludes that Defendants'
proposed "forward-looking"
special circumstance-namely,
that claims such as AAM's dormant
Commerce Clause claim will be brought by business interests and trade groups regardless of the
availability offee-shifting-is
effectively foreclosed. Arguing that attorney's fees are unnecessary
in this type of case because parties and counsel will be incentivized by the potential "substantial
economic benefits," Opp'n Mot. Attorney's Fees at 17, is just another way of saying that fees
should not be available when the plaintiff has a financial incentive to bring the case. See Nat'f
Home Equity Mort. Ass 'n, 283 F.3d at 226. Moreover, relying on the fact that the parties bringing
these cases will be "commercial
actors," "business interests," and "trade groups" with the.
resources to obtain counsel, Opp'n Mot. Attorney's Fees at 17, is effectively another way to
consider a party's ability to afford counsel to be a special circumstance, a position that the Fourth
Circuit has explicitly rejected. See Bills, 628 F.2d at 847. The Court therefore concludes that the
proposed special circumstances are effectively precluded by controlling authority.
Defendants'
concerns about federalism also fail as a special circumstance.
Granting
attorney's fees in this case, Defendants argue, "would have the potential to chill state regulation in
any area of the economy dominated by complex, interstate businesses."
Opp'n Mot. Attorney's
Fees at 18. Even if this Court were to find such an argument compelling, it cannot reasonably be
squared with controlling precedent. First, the Supreme Court has explicitly held that as a general
proposition,
S
1988 makes attorney's fees "available in any
448 U.S. 1, 9 (1980) (concluding that
S
S
1983 action." Maine v. Thiboutot,
1988 attorney's fees are available in a
8
S
1983 action
alleging a federal statutory violation).
Second, the Supreme Court has held that dormant
Commerce Clause claims are cognizable under 42 U.S.C.
S 1983.
See Dennis v. Higgins, 498 U.S.
439,451 (1991). Considered together, these two cases effectively establish that attorney's fees are
generally available in dormant Commerce Clause cases. See BFI Medical Waste Sys. v. Whatcom
Cty., 983 F.2d 911, 914 (9th Cir. 1993) ("Litigants who successfully bring suit under the
Commerce Clause may recover ... attorney's fees under
S
was well aware of this consequence when it upheld the use of
1988."). Indeed, the Supreme Court
S 1983 to as'sert a dormant
Claim in Dennis: Justice Kennedy's dissent in Dennis asserted that
S 1983 should
Commerce
not be a vehicle
through which to assert a dormant Commerce Clause claim because it would render attorney's fees
available, through
S
1988, to "major corporations and industry associations" and thus "shift[] the
balance of power away from the States and toward interstate businesses." Dennis, 498 U.S. at 464
(Kennedy, J., dissenting).
Justice Kennedy also warned that such an outcome would "risk
destruction of state fiscal integrity." Id.
rejected the argument that the use of
provision of attorney's fees under
Thus, the Supreme Court has effectively evaluated and
S 1983 to assert
a dormant Commerce Clause claim, and the
S 1988 on such a claim,
should not be permitted because it would
harm state regulatory interests, advantage interstate businesses, and implicate federalism concerns.
Finally, the Court notes that Defendants' federalism argument, that the potential to face a
substantial attorney's fee award could dissuade state government regulatory activity, would apply
to all state regulation, not just those "area[ s] of the economy dominated by complex, interstate
businesses."
available in
Opp'n Mot. Attorney's Fees at 18. Yet the claim that attorney's fees should not be
S 1983
cases challenging state regulatory activity cannot be readily reconciled with
courts' consistent approval of
S 1988 attorney's
fees in cases challenging state laws or regulations.
See, e.g., Nat'l Home Equity Mort. Ass 'n, 283 F.3d at 222-23, 226 (affirming an attorney's fees
9
award in a case challenging a Virginia law regulating mortgage prepayment penalties); Consumers
Union of
us., Inc.
v. Va. State Bar, 688 F.2d 218 (4th Cir. 1982) (finding that an award of
attorney's fees against the Virginia Supreme Court and the Virginia State Bar was warranted in a
case challenging the enforcement of a state professional responsibility
code); cf Brandon v.
Guilford Cty. Bd. of Elections, 921 F.3d 194,201 (4th Cir. 2019) (reversing a district court's denial
of attorney's fees in a case challenging a state redistricting law). Accepting Defendants' argument
would widen the special circumstances exception beyond its "narrowly circumscribed" limits. See,
e.g., Brandon, 921 F.3d at 201 (reversing a determination that special circumstances rendered an
attorney's fee award unjust where the district court had transgressed "its narrowly circumscribed
discretion"). The Court declines to do so.
The Court therefore finds that in light of existing precedent,
there are no special
circumstances present that would make awarding attorney's fees unjust.
CONCLUSION
For the foregoing reasons, AAM's Motion for Attorney's Fees is GRANTED. A separate
Order shall issue.
Date: November 21,2019
10
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?