Beeman v. Anthem Prescription Management, LLC
689 F.3d 1002
9th Cir.2012Background
- California Civil Code sections 2527 and 2528 mandate private studies of pharmacy pricing every two years by prescription drug claims processors.
- Section 2527 requires identifying the fees (excluding ingredient costs) of California pharmacies for dispensing services in a statistically significant sample and transmitting the data to each client’s CEO or designee.
- Plaintiffs are five California retail pharmacies alleging defendants failed to comply with §2527.
- Defendants are various prescription drug claims processors and related entities.
- The issue is whether §2527 compels speech in violation of the California Constitution, prompting certification to the California Supreme Court; the district court and California appellate decisions are split on constitutionality.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does §2527 compel speech in violation of California Constitution Art. I §2? | Beeman argues the statute compels private speech harmful to constitutional rights. | Anthem and others contend the statute is constitutional under California and federal free-speech frameworks. | Certified question; merits deferred to California Supreme Court. |
| Should federal First Amendment analysis apply to California’s free-speech challenge under Art. I §2? | Plaintiffs contend California’s clause may be broader; federal precedent is not controlling. | Defendants argue federal First Amendment analysis governs the California clause in this context. | Certified question; not decided on the merits. |
| What intra-jurisdictional posture should govern enforcement given potential conflicts between state and federal authorities? | State enforcement should be coherent with California constitutional protections. | Federal concerns about Erie-like forum-shoppings weigh against conflicting outcomes. | Stay and certification to California Supreme Court; en banc court retains jurisdiction. |
Key Cases Cited
- ARP Pharmacy Servs., Inc. v. Gallagher Bassett Servs., Inc., 138 Cal. App. 4th 1307 (Cal. Ct. App. 2006) (reporting requirement violates California free speech clause per ARP)
- Gerawan Farming, Inc. v. Lyons, 4 Cal.4th 1131 (Cal. 2000) (state free speech clause broader than First Amendment)
- L.A. Alliance for Survival v. City of L.A., 22 Cal.4th 352 (Cal. 2000) (California clause broader/protective than First Amendment)
- Sorrell v. IMS Health Inc., 131 S. Ct. 2653 (S. Ct. 2011) (creation and distribution of information as speech)
- Riley v. National Federation of the Blind of N.C., 487 U.S. 781 (U.S. 1988) (content-based vs. factual speech scrutiny)
- FAIR v. Rumsfeld, 547 U.S. 47 (U.S. 2006) (compelled speech analysis context)
- Gallo Cattle Co. v. Kawamura, 159 Cal. App. 4th 948 (Cal. App. 2008) (California constitutional interpretation guides following federal precedents)