UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
July 12, 2011
PHARMACEUTICAL CARE MANAGEMENT ASSOCIATION, PLAINTIFF,
DISTRICT OF COLUMBIA ET AL., DEFENDANTS.
The opinion of the court was delivered by: Ricardo M. Urbina United States District Judge
: Re Document Nos.: 93, 95
GRANTING THE PLAINTIFF'S MOTION TO DISMISS WITHOUT PREJUDICE; DENYING THE DEFENDANTS'MOTION TO DISMISS WITH PREJUDICE
This matter is before the court on the plaintiff's motion to dismiss its remaining claims without prejudice and the defendants' motion to dismiss the remaining claims with prejudice. The plaintiff, the Pharmaceutical Care Management Association, brought suit against the District of Columbia and its mayor. The plaintiff alleges that a District of Columbia law that aimed to regulate a sector of the pharmaceutical industry violated the constitutional rights of the plaintiff's organizational members and impermissibly intruded upon an area of federal regulation. Having recently received a favorable ruling by the Circuit on its preemption claim, the plaintiff now moves to dismiss its remaining constitutional claims without prejudice. The defendants move to dismiss the plaintiff's remaining claims with prejudice. Because the plaintiff's motion satisfies the prerequisites of Rule 41(a)(2), the court grants the plaintiff's motion and denies the defendants' motion.
II. FACTUAL & PROCEDURAL BACKGROUND
The plaintiff is a national trade association that represents various businesses known as pharmaceutical benefits managers ("PBMs"). Compl. ¶ 8. PBMs act as intermediaries between health benefit providers and the 200 million Americans who receive prescription drugs through their health plans. Id.
In 2004, the D.C. Council passed the Access Rx Act. See generally D.C. CODE §§ 48-832.01 et seq. Title II of the Access Rx Act imposed various fiduciary and disclosure duties on PBMs. Mem. Op. (Dec. 21, 2004) at 2. Following passage of the Access Rx Act, the plaintiff commenced this action, alleging that Title II of the Access Rx Act violated a number of statutory and constitutional provisions. See generally Compl. Specifically, the plaintiff alleged that Title II impermissibly intruded upon an area of federal regulation and that Title II otherwise ran afoul of the Fifth Amendment's Takings Clause, the Commerce Clause and the First Amendment. Id.
Following a series of procedural twists and turns,*fn1 this court granted in part the plaintiff's motion for partial summary judgment on the grounds that federal law preempted Title II. See generally Mem. Op. (Mar. 19, 2009). The defendants appealed, and the Circuit affirmed in part and reversed in part, holding that federal law indeed preempted certain provisions of the Access Rx Act. See generally Pharm. Care Mgmt. Ass'n v. District of Columbia, 613 F.3d 179 (D.C. Cir. 2010). Nevertheless, the Circuit held that several other provisions of the Act were not similarly displaced by federal law. Id. at 186. The Circuit remanded to allow this court to adjudicate the plaintiff's remaining constitutional claims. Id. at 190.
In the wake of the Circuit's ruling, the plaintiff has filed its current motion to dismiss its remaining claims without prejudice. See generally Pl.'s Mot. to Dismiss Without Prejudice ("Pl.'s Mot."). The defendants filed an opposition, see generally Defs.' Opp'n to Pl.'s Mot. to Dismiss Without Prejudice ("Defs.' Opp'n"), and a contemporaneous motion to dismiss the remaining claims with prejudice, see generally Defs.' Mot. to Dismiss with Prejudice ("Defs.' Mot."). With these motions now ripe for review, the court turns to the parties' arguments and the relevant legal standards.
A. Legal Standard to Dismiss Under Rule 41(a)*fn2 Federal Rule of Civil Procedure 41(a) governs voluntary dismissal of an action. FED. R. CIV. P. 41(a)(1). Under Rule 41(a)(2), "an action shall not be dismissed at the plaintiff's instance save upon order of the court and upon such terms and conditions as the court deems proper."
FED. R. CIV. P. 41(a)(2); Taragan v. Eli Lilly & Co., 838 F.2d 1337, 1339 (D.C. Cir. 1988). Dismissals under Rule 41(a)(2) "generally [are] granted in the federal courts unless the defendant would suffer prejudice other than the prospect of a second lawsuit or some tactical disadvantage." Conafay v. Wyeth Labs., 793 F.2d 350, 353 (D.C. Cir. 1986); see also 9 FED. PRAC. & PROC. 2d § 2364. A court applying Rule 41(a)(2) therefore must consider whether the plaintiff seeks the motion for voluntary dismissal in good faith, and whether the dismissal would cause the defendant "legal prejudice" based on factors such as any excessive delay or lack of diligence by the plaintiff in prosecuting the action, an insufficient explanation by the plaintiff for taking non-suit and the stage of the litigation. In re Vitamins Antitrust Litig., 198 F.R.D. 296, 304 (D.D.C. 2000).
B. The Court Grants the Plaintiff's Motion and Denies the Defendants' Motion
The defendants argue that the court should deny the plaintiff's motion because granting the motion would cause legal prejudice to befall the defendants. Defs.' Mot. at 3. The defendants ask that the court dismiss the plaintiff's remaining claims with prejudice and definitively rule on the constitutionality of Title II. Id. at 4. Without a favorable ruling on the merits, the defendants contend, Title II's constitutionality would remain uncertain. Id. The defendants reason that the current uncertainty about Title II's constitutionality would effectively prevent public enforcement of the Access Rx Act. Id. The defendants also argue that their "extensive briefing" and "other preparation efforts" would be "entirely wasted" if the case were dismissed without prejudice. Id. Finally, the defendants assert that the "public interest" lies in a speedy resolution of the important constitutional issues that have been raised in this litigation. Id.
The plaintiff contends that voluntary dismissal will not cause the
defendants any legal prejudice. See generally Pl.'s Reply.
Specifically, the plaintiff argues that the specter of future
litigation does not constitute legal prejudice under Rule 41(a)(2).
Id. at 5. Furthermore, the plaintiff argues that the defendants' years
of efforts litigating this matter have only been wasted inasmuch as
the defendants elected to defend a law that this court and the Circuit
have deemed unconstitutional. Id. Finally, the plaintiff argues that
the defendants' claim that any remaining legal uncertainties will
"effectively" prevent enforcement of the law is baseless, as any and
all laws may be subjected to some future legal challenge.*fn3
At the outset, the court notes that the defendants do not contend that the plaintiff has prosecuted this case with undue delay or bad faith. See Defs.' Mot. at 4. The court thus turns to the question of whether any of the defendants' allegations amount to legal prejudice under Rule 41(a).
It is beyond quibble that the prospect of a second lawsuit does not constitute legal prejudice. See, e.g., Cone v. W. Va. Pulp & Paper Co., 330 U.S. 212, 217 (1947) (explaining that a voluntary dismissal should be granted "unless the defendant would suffer some plain legal prejudice other than the mere prospect of a second lawsuit"); Jones v. Sec. Exch. Comm'n, 298 U.S. 1, 19 (1936) (holding that a complainant should be granted the right to dismiss a claim unless it would "prejudice the defendants in some other way than by the mere prospect of being harassed and vexed by future litigation of the same kind"); Conafay, 793 F.2d at 353 ("[W]e simply observe that dismissals have generally been granted in the federal courts unless the defendant would suffer prejudice other than the prospect of a second lawsuit or some tactical disadvantage."). In addition, the mere fact that a defendant may have incurred substantial expense prior to dismissal does not amount to legal prejudice. In re Vitamins, 198 F.R.D. at 304-05. Finally, litigation expenses are not deemed "wasted" if they may be of use in future litigation. Hisler v. Gallaudet Univ., 344 F. Supp. 2d 29 (D.D.C. 2004).
Arguing that they would be legally prejudiced without a ruling on the merits, the defendants rely heavily on their contention that Title II's constitutionality is "uncertain" and that enforcement of the law would be stymied in the absence of a favorable ruling on the merits. Defs.' Mot. at 4. In essence, the defendants argue that granting the plaintiff's motion may subject the defendants to future litigation over the constitutionality of the Access Rx Act. Although the defendants are correct, the fear of future litigation does not constitute legal prejudice under Rule 41(a)(2). Conafay, 793 F.2d at 353; see also Westland Water Dist. v. United States, 100 F.3d 94, 96 (9th Cir. 1996) (holding that "uncertainty" caused by the specter of future litigation is "insufficient to establish plain legal prejudice").
Moreover, the court is not convinced that the defendants' efforts have thus far been wasted. If the constitutionality of Title II is litigated in the future, then the defendants' expenses towards litigation will not have been in vain because its preparations may be put to good use. Hisler, 344 F. Supp. 2d at 37. In any event, even "substantial expenses prior to dismissal do not amount to legal prejudice" under Rule 41(a)(2). In re Vitamins, 198 F.R.D. at 304-05.*fn4
Finally, the court is not convinced that the public interest lies in the immediate resolution of any and all questions surrounding the constitutionality of the Access Rx Act. The defendants here insist that the threat of future litigation may delay implementation of the law and harm the public interest. Defs.' Mot. at 4. However, the defendants' "public interest" argument is nothing more than a thinly veiled reiteration of the defendants' earlier claim that they may be subject to future litigation, an argument that has no legal merit. Conafay, 793 F.2d at 353. Moreover, the court is hesitant to rush headlong into a legal controversy that the parties do not mutually wish to pursue. The premise of our adversarial system is that courts "do not sit as self-directed boards of legal inquiry and research, but essentially as arbiters of legal questions presented and argued by the parties before them." Carducci v. Regan, 714 F.2d 171, 177 (D.C. Cir. 1983). Thus, the public interest lies in resolving these constitutional issues when the defendants are faced with a legal adversary that wishes to pursue its case in full.
In sum, the defendants have not made a showing of legal prejudice under Rule 41(a)(2). Accordingly, the court grants the plaintiff's motion to dismiss its remaining claims without prejudice and denies the defendants' motion.
For the foregoing reasons, the court grants the plaintiff's motion to voluntarily dismiss its remaining claims without prejudice and denies the defendants' motion to dismiss the plaintiff's remaining claims with prejudice. An Order consistent with this Memorandum Opinion is separately and contemporaneously issued this 12th day of July, 2011.