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Zogenix, Inc. v. Patrick

United States District Court, District of Massachusetts

August 28, 2014

ZOGENIX, INC.
v.
DEVAL PATRICK, in his official capacity as GOVERNOR OF MASSACHUSETTS, et al.

MEMORANDUM OF DECISION

RYA W. ZOBEL UNITED STATES DISTRICT JUDGE

On July 8, 2014, I preliminarily enjoined two Massachusetts regulations which required that a licensed prescriber write a “letter of medical necessity” certifying “that other pain management treatments have failed” before prescribing Zohydro ERTM(“Zohydro”). Docket # 66 at 10 (citing 243 CMR § 2.07(25)(d); 263 CMR § 5.07(12)(d)). I invited defendants, Commonwealth health officials sued in their official capacities, to move to lift the injunction if they “provid[ed] adequate and constitutional guidance to physicians regarding the prerequisites for prescribing Zohydro.” Id. Defendants have accepted the invitation and so moved, arguing, inter alia, [1] that the Commonwealth has promulgated new regulations which no longer offend the Supremacy Clause of the United States Constitution. Docket # 68; see U.S. Const. art. VI cl. 2. I agree and lift the injunction. First, however, a preliminary word about standing.

A. Standing

In my prior memorandum, I stated that defendants had “waived” their standing argument because they failed to develop the argument in their memorandum in support of their motion to dismiss. Docket # 66 at 10 n.4. Defendants claim this was error. It is true, of course, that standing implicates subject matter jurisdiction and may not be waived. United States v. AVX Corp., 962 F.2d 108, 116 n.7 (1st Cir. 1992). Here, though, defendants raised their standing challenge in a single perfunctory paragraph on the last page of their memorandum in support of their motion to dismiss, Docket # 45 at 20, but, rather perplexingly, developed the argument in an altogether separate document filed two weeks later: their memorandum in opposition to plaintiff’s motion for a preliminary injunction. Docket # 56 at 16-20. In so doing, defendants did not comply with our Local Rules. See U.S. Dist. Ct. Rules D. Mass, Local Rule 7(b)(1) (“A party filing a motion shall at the same time file a memorandum of reasons, including citation of supporting authorities, why the motion should be granted.”).

The First Circuit recently reiterated that “[w]hen an issue implicates subject-matter jurisdiction, a federal court is obliged to resolve that issue even if the parties have neither briefed nor argued it.” Merrimon v. Unum Life Ins. Co. of Am., ___ F.3d ___, Nos. 13-2128, 13-2168, slip op. at *2 (1st Cir. July 2, 2014). It is debatable whether this precept applies to issues which are briefed, but are briefed improperly. Assuming, dubitante, that it does, and appreciating my “unflagging obligation to notice jurisdictional defects and to pursue them on [my] own initiative, ” Espinal-Dominguez v. Puerto Rico, 352 F.3d 490, 495 (1st Cir. 2003), I address defendants’ standing challenge.

The judicial power of the federal courts extends only to actual cases and controversies. U.S. Const. art. III, § 2, cl. 1. “A case or controversy exists only when the party soliciting federal court jurisdiction . . . demonstrates ‘such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends.’” Katz v. Pershing, L.L.C., 672 F.3d 64, 71 (1st Cir. 2012) (quoting Baker v. Carr, 369 U.S. 186, 204 (1962)). To establish that personal stake, a plaintiff must satisfy “each part of a familiar triad: injury, causation, and redressability.” Id. (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)). Defendants challenge the first two of these three parts.

First, they contend that plaintiff’s claimed injury is impermissibly premised on speculation about future events, rather than on a harm it has already suffered. Docket # 56 at 16-17. The injury plaintiff alleges must be “concrete and particularized” and “actual or imminent, not conjectural or hypothetical.” Lujan, 504 U.S. at 560 (internal quotation and citation omitted). Plaintiff must demonstrate only “an objectively reasonable possibility” that it will be injured in such a way. Osediacz v. City of Cranston, 414 F.3d 136, 143 (1st Cir. 2005). Here, plaintiff has alleged injury to its economic well-being in that the regulations restrict the availability of Zohydro and therefore reduce the size of the market for its product. And it has alleged damage to its reputation from the publicity that has accompanied the regulations. These allegations are just as strong, if not stronger, than those in cases where courts in this Circuit have found a sufficiently alleged injury. See Harvey v. Veneman, 396 F.3d 28, 34 (1st Cir. 2005); Mass. Indep. Certification, Inc. v. Johanns, 486 F.Supp.2d 105, 114-15 (D. Mass. 2007). Plaintiff satisfies the injury prong.

Defendants contest the causation prong on the ground that plaintiff cannot trace its reputational injury to the passage of the regulations, “as opposed to one or more of the multitude of well-publicized critical comments.” Docket # 56 at 17. Plaintiff must show that the injury it alleges is not “overly attenuated” from the challenged action. Donahue v. City of Bos., 304 F.3d 110, 115 (1st Cir. 2002). It doubtless has done so. The economic injury it alleges is directly tied to the regulations; in other words, the burdens the regulations impose on prescribers lead them to write fewer prescriptions, which impacts plaintiff’s bottom line. And although defendants have not been the only parties to criticize Zohydro, the Commonwealth’s ban and subsequent restrictions on the drug have been highly publicized. It is not “overly attenuated” to trace a reputational injury to the regulations and the accompanying publicity. Plaintiff satisfies the causation prong.

Defendants concede redressability, and I agree that a favorable resolution of plaintiff’s claim would likely redress the alleged injury. Katz, 672 F.3d at 72. Having satisfied each part of the “familiar triad, ” plaintiff has constitutional standing to sue.

B. Merits

Obstacle preemption, on which plaintiff relies, occurs when, “under the circumstances of [the] particular case, [the challenged state law] stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Hines v. Davidowitz, 312 U.S. 52, 67 (1941). The doctrine requires a conflict between state and federal law. See id.; Savage v. Jones, 225 U.S. 501, 533 (1912). Here, however, the new regulation omits the conflicting, troublesome language. Where formerly other pain management treatments must have “failed, ” now they must be “inadequate.” 243 CMR § 2.07(25)(a) (Docket # 65-1); 263 CMR § 5.07(12)(a) (Docket # 68-1).[2] The substitution is significant for two reasons.

First, the words have different meanings. “Fail” means “[t]o prove so deficient as to be totally ineffective” or “[t]o be unsuccessful, ” Webster’s II New Riverside University Dictionary 461 (1984), whereas “inadequate” means not “[a]ble to satisfy a requirement.” Id. 616 (referencing id. 78). If a course of action has failed, it has been tried but has proven unsuccessful. But a course of action need not be tried to be “inadequate;” it must simply be unable to satisfy a requirement. The upshot is that the new regulation does not require a licensed prescriber to actually prescribe “other pain management treatments.” Instead, he or she must only consider those treatments unable to satisfy the relevant requirement—here, alleviating the patient’s pain. Taken one step further, the new regulation does not relegate Zohydro to a last-resort opioid, which, as I explained in my prior memorandum, “makes Zohydro less available” and therefore “presents a constitutional problem.” Docket # 66 at 8-9. The obstacle—mandatory preliminary prescribing of other opioids—has now been removed.

Second, the new regulation mimics the language the Food and Drug Administration approved for Zohydro’s label. See Docket # 51-8. Plaintiff has conceded that such a regulation passes constitutional muster.

THE COURT: Now, assume for the moment that the doctor’s regulations include the letter of medical necessity without any reference to failed treatments. Would there be a problem?
MR. HOLLMAN [Counsel for Plaintiff]: If the medical necessity is only the same as the approved indication, which is to show that other – which is to state that other medications are inadequate, that would be supported by the clinical testing that was performed, supported by the approval that the FDA gave, and it would be consistent with the FDA’s approval. So, no, under those circumstances, no objection.

Transcript of June 10, 2014 Oral Argument at 14-15. Plaintiff’s statement sums it up neatly: there is no conflict between state and federal law, and thus, no preemption.

C. Conclusion

Defendants’ motion to vacate the preliminary injunction (Docket # 68) is ALLOWED. The court has set a scheduling conference for September 11, 2014, at 3:00 p.m.


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