Ass'n for Accessible Medicines v. Frosh
| Decision Date | 21 November 2019 |
| Docket Number | Civil Action No. TDC-17-1860 |
| Parties | ASSOCIATION 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, Defendants. |
| Court | U.S. District Court — District of Maryland |
Pending before the Court is the Motion for Attorney's Fees and Costs pursuant to 42 U.S.C. § 1988 ("§ 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. Having reviewed the briefs and submitted materials, the Court finds no hearing necessary. See D. Md. Local R. 105.6. For the reasons set forth below, the Motion is GRANTED.
In 2017, the Maryland General Assembly enacted a law targeting price gouging in the generic prescription drug market. 2017 Md. Laws 4556 (codified at Md. Code Ann., Health-General §§ 2-801-2-803 (LexisNexis 2019)). This law prohibits drug manufacturers or wholesale distributors from introducing any generic drug price increase that (1) 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 of the drug to their health; and (ii) [i]nsufficient competition in the market for the drug." Md. Code. Ann., Health-Gen. §§ 2-801(c), (f), 2-802(a) (LexisNexis 2019). Each violation of this prohibition may be punished by a civil penalty of up to $10,000. Id. § 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. § 1983. Ass'n for 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).
On appeal, 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 rehearingen banc, but the Fourth Circuit declined. Ass'n for 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 for 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.
AAM argues that it is entitled to attorney's fees under the plain language of 42 U.S.C. § 1988, which provides for attorney's fees for the prevailing party in a civil rights action filed pursuant to 42 U.S.C. § 1983, because it prevailed in this litigation and there are no special circumstances justifying an exercise of the Court's discretion to deny it attorney's fees. Defendants do not contest that AAM was the prevailing party for purposes of § 1988. Instead, they argue that there are special circumstances warranting a denial of attorney's fees, specifically, that an award of attorney's fees to an industry group like AAM in a case that succeeded in striking down a law regulating that industry would not further the purposes of § 1988, and because granting attorney's fees would raise federalism concerns by deterring other states from exercising their regulatory authority.
In a civil action filed pursuant to 42 U.S.C. § 1983, "the court, in its discretion, may allow the prevailing party . . . a reasonable attorney's fee as part of the costs." 42 U.S.C. § 1988(b)(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 § 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 Balt. Cty., 165 F.3d 260, 264 (4th Cir. 1998) (citations omitted); cf. N.Y. Gaslight Club, Inc. v. Carey, 447 U.S. 54, 68 (1980) (). "Only on rare occasions does a case present such circumstances." Doe, 165 F.3d at 264; see Hescott v. City of Saginaw, 757 F.3d 518, 523 (6th Cir. 2014) (). 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. N.H. 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. of Educ., 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 toidentify 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).
As noted, Defendants have effectively conceded that AAM is a prevailing plaintiff for purposes of § 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) (). 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 § 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. §§ 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 § 1988." Id. at 264. The Court is therefore effectivelyprecluded from utilizing this two-factor approach in a motion for attorney's fees under § 1988. See id.; Combs ex rel. Combs v. School Bd. of Rockingham Cty., 15 F.3d 357, 360 (4th Cir. 1994) ().
Nevertheless, the Court may still consider Defendants' substantive arguments relating to the purpose of § 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...
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