Smith v. Hi-Tech Pharm., Inc.

• Docket Number: Case No. S22C1252, S22C1259
• Decision Date: 21 August 2023
• Citation: 317 Ga. 14,891 S.E.2d 923 (Mem)
• Parties: SMITH v. HI-TECH PHARMACEUTICALS, INC.; and vice versa.
• Court: Georgia Supreme Court

317 Ga. 14

891 S.E.2d 923 (Mem)

SMITH v. HI-TECH PHARMACEUTICALS, INC.; and vice versa.

Case No. S22C1252, S22C1259

Supreme Court of Georgia.

August 21, 2023

Matthew Scott Harman, Eric Scott Fredrickson, Harman Law Firm LLC, 3575 Piedmont Road, Building 15, Suite 1040, Atlanta, Georgia 30305, for Shawn M. Smith.

Eileen Elizabeth H. Rumfelt, Miller & Martin, PLLC, 1180 West Peachtree Street, NW, Suite 2100, Atlanta, Georgia 30309, Robert Foust Parsley, Meredith Corey Lee, Miller & Martin, PLLC, 832 Georgia Avenue, Suite 1200, Chattanooga, Tennessee 37402, for Hi-Tech Pharmaceuticals, Inc.

The Supreme Court today denied the petition for certiorari in these cases.

All the Justices concur.

PINSON, J., concurring in the denial of certiorari.

I agree with the Court's decision to deny further review in this case.I write separately to flag some questions about the doctrine of primary jurisdiction.

The doctrine of primary jurisdiction allows a court to "refer" an issue in a case to an administrative agency and either stays or dismisses the case while the agency resolves the issue.SeeWRIGHT AND MILLER , 33 FEDERAL PRACTICE & PROCEDURE§ 8366 (2d ed.)(quotingReiter v. Cooper , 507 U.S. 258, 268, 113 S.Ct. 1213, 122 L.Ed.2d 604(1993) );ADMINISTRATIVE LAW PRACTICE AND PROCEDURE§ 6:10(Aug. 2022 update).The doctrine developed in the U.S. Supreme Court, and federal courts have applied it for well over a century, seeTexas & Pacific R. Co. v. Abilene Cotton Oil Co. , 204 U.S. 426, (27 S.Ct. 350, 51 L.Ed. 553(1907), in rate-setting cases, seeGreat Northern R. Co. v. Merchants' Elevator Co. , 259 U.S. 285, 42 S.Ct. 477, 66 L.Ed. 943(1922);U.S. Navigation Co. v. Cunard Steamship Co. , 284 U.S. 474, 52 S.Ct. 247, 76 L.Ed. 408(1932);Far East Conference v. United States , 342 U.S. 570, 72 S.Ct. 492, 96 L.Ed. 576(1952);United States v. Western Pacific R. Co. , 352 U.S. 59, 77 S.Ct. 161, 1 L.Ed.2d 126(1956); labor-relations cases, seeSan Diego Building Trades Council, Millmen's Union, Local 2020 v. Garmon , 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775(1959);Brown v. Hotel & Restaurant Employees & Bartenders Intl. Union Local 54 , 468 U.S. 491, 104 S.Ct. 3179, 82 L.Ed.2d 373(1984);Sears, Roebuck & Co. v. San Diego County Dist. Council of Carpenters , 436 U.S. 180, 98 S.Ct. 1745, 56 L.Ed.2d 209(1978); antitrust cases, seeRicci v. Chicago Mercantile Exch. , 409 U.S. 289, 93 S.Ct. 573, 34 L.Ed.2d 525(1973);Chicago Mercantile Exch. v. Deaktor , 414 U.S. 113, 94 S.Ct. 466, 38 L.Ed.2d 344(1973); food and drug-labeling cases, seeWeinberger v. Bentex Pharmaceuticals, Inc. , 412 U.S. 645, 93 S.Ct. 2488, 37 L.Ed.2d 235(1973); and more, seeSouthern Utah Wilderness Alliance v. Bureau of Land Mgmt. , 425 F.3d 735(2005)(property);Tassy v. Brunswick Hosp. Center, Inc. , 296 F.3d 65(2nd Cir.2002)(public health).

Over time, however, the doctrine has percolated into a number of state courts, including ours.SeeGeorgia Power v. Cazier , 303 Ga. 820, 825 n.5, 815 S.E.2d 922(2018)(collecting state cases).That is where my questions arise.Our Court has often warned against "uncritically importing"holdings of federal courts into Georgia law.See, e.g., Elliott v. State , 305 Ga. 179, 188, 824 S.E.2d 265(2019);Buckner-Webb v. State , 314 Ga. 823, 834, 878 S.E.2d 481(2022)(Pinson, J., concurring).Of course, the U.S. Supreme Court's holdings interpreting or applying federal law are binding on state courts.But when is applying the doctrine of primary jurisdiction a matter of interpreting or applying federal law?And if the answer is "only sometimes," is there a basis in Georgia law for applying the doctrine when federal law isn't involved?I offer some preliminary thoughts on these questions below.

1.The first thing to know is that the doctrine of primary jurisdiction "is really two doctrines."Arsberry v. Illinois , 244 F.3d 558, 563(7th Cir.2001)(Posner, J.).See alsoDiana R. H. Winters, Restoring the Primary Jurisdiction Doctrine , 78 OHIO ST. L.J. 541, 547(2017)(explaining that "[p]rimary jurisdiction can be separated into two strains").In its "central and original form," the doctrine applies "when, in a suit involving a regulated firm but not brought under the regulatory statute itself, an issue arises that is within the exclusive original jurisdiction of the regulatory agency to resolve."Arsberry , 244 F.3d at 563.In these "exclusive agency jurisdiction"cases, a court refers an issue to an agency because a relevant regulatory statute requires the agency to resolve it—generally for reasons grounded in a need for uniformity.Id.(citingWestern Pacific R. Co. , 352 U.S. at 64, 77, 77 S.Ct. 161;Cahnmann v. Sprint Corp. , 133 F.3d 484, 487(7th Cir.1998);Advance United Expressways, Inc. v. Eastman Kodak Co. , 965 F.2d 1347, 1352-1353(5th Cir.1992);City of Peoria v. General Electric Cablevision Corp. , 690 F.2d 116, 121-122(7th Cir.1982) ).

This form of the doctrine is not so much a "doctrine" as it is simply a species of statutory interpretation.Abilene Cotton Oil , 204 U.S. 426, 27 S.Ct. 350, long credited as the first application of the doctrine of primary jurisdiction, seeWintersat 552, is a good example.There, a shipper of cotton seed sued a rail carrier in state court for charging an unreasonable rate in violation of an alleged common law right.

SeeAbilene Cotton Oil , 204 U.S. at 430-431, 27 S.Ct. 350.The U.S. Supreme Court held that the shipper had to raise the argument that the rate was unreasonable before the federal Interstate Commerce Commission, with whom the charged rate had been published and filed.In support of that conclusion, the Court did not rely on its belief that the ICC had the experts who were better suited to resolve that question.Instead, it marshaled arguments from the text and context of the Interstate Commerce Act.Seeid. at 436-437, 27 S.Ct. 350(explaining that the "fundamental question" was the "scope and effect" of the Interstate Commerce Act, and that the case"must rest upon an interpretation of the text of the act").After canvassing the Act in detail, the Court reasoned that allowing courts to adjudicate whether a rate was reasonable in individual cases would give rise to the potential for conflicting rulings and thus non-uniform and discriminatory rates, in direct conflict with the Act's provisions that were meant, above all, to ensure uniform and nondiscriminatory rates.Seeid. at 440-441, 27 S.Ct. 350.And even though the Act included a savings clause for common law remedies, that clause "[could not] in reason be construed as continuing in shippers a common-law right, the continued existence of which would be absolutely inconsistent with the provisions of the act."Id. at 446, 27 S.Ct. 350.Finally, the argument that funneling questions about the reasonableness of rates to the Commission first would be inefficient or even "harmful""affords no justification for so interpreting the statute as to destroy it."Id. at 447, 27 S.Ct. 350.Put simply, the shipper had to bring its argument to the ICC because the statute, as the Court construed it, required as much.Seeid. at 447-448, 27 S.Ct. 350.

Some decisions following Abilene Cotton Oil are in accord with this statutory-construction-based approach: in cases otherwise properly before a lower court, the Court would hold that the court was required to refer issues to an agency for resolution first because the governing statutory scheme put the issues within the exclusive jurisdiction of the agency.SeeCunard Steamship Co. , 284 U.S. at 485, 52 S.Ct. 247(holding that arguments in the context of an antitrust claim about the reasonableness of rates fell "within the exclusive preliminary jurisdiction of the Shipping Board" based on "[t]he scope and eviden[t] purpose of the Shipping Act, as in the case of the Interstate Commerce Act");Garmon , 359 U.S. at 246, 79 S.Ct. 773(holding in the context of labor relations that "since such [union] conduct is arguably within the compass of s 7 or s 8 of the Act, the State's jurisdiction is displaced").

But since Abilene Cotton Oil , the doctrine of primary jurisdiction has also developed a prudential strain.Instead of sending an issue to an agency first because a statute contemplates it, courts often ground this referral merely in a desire for the agency's expertise.

SeeArsberry , 244 F.3d at 563("The doctrine of primary jurisdiction is sometimes defined quite differently, as a doctrine that allows a court to refer an issue to an agency that knows more about the issue, even if the agency hasn't been given exclusive jurisdiction to resolve it.").See, e.g., Astiana v. Hain Celestial Grp., Inc. , 783 F.3d 753, 762(9th Cir.2015)("The purpose of referral to the FDA was not for the agency to adjudicate Astiana's claims, but to provide expert advice that would be useful to the court in considering this lawsuit.");Am. Trucking Assns., Inc. v. Interstate Commerce Commn. , 682 F.2d 487, 491(5th Cir.1982)("The doctrine of primary jurisdiction ... allows a court when faced with an issue which calls into question an area of special expertise of an agency to suspend proceedings pending referral of the issue to the agency for its official position.").For instance, the U.S. Supreme Court later explained the doctrine as "a principle, now firmly established, that in cases raising issues of fact not within the conventional experience of judges or cases requiring the exercise of administrative discretion, agencies created by Congress for regulating the subject matter should not be passed over."Far East Conference , 342 U.S. at 594, 72 S.Ct. 492.¹The Court goes on to explain that agencies should get the first crack at those kinds of issues because "they are better equipped than courts by specialization, by in-sight gained through experience, and by more flexible procedure."Id.And in Ricci , 409 U.S. 289, 93 S.Ct. 573, 34 L.Ed.2d 525, ...