Pharmaceutical Research & Manufacturers of America v. County of Alameda, 2014 U.S. App. LEXIS 18737

Background

Alameda County enacted a 2012 Safe Drug Disposal Ordinance requiring manufacturers who sell or distribute "Covered Drugs" in Alameda to fund and operate a countywide product stewardship program (collection kiosks, transportation, destruction, outreach).
The Ordinance applies to all manufacturers whose drugs are available in Alameda, regardless of the manufacturer’s location; manufacturers may run individual or joint programs and must proportionally share costs; point-of-sale surcharges are prohibited.
Estimated start-up and annual program costs were disputed, but Alameda estimated per-manufacturer annual oversight costs of roughly $5,300–$12,000; manufacturers would reimburse county administration costs.
Plaintiffs (trade organizations for drug manufacturers/distributors) sued, alleging the Ordinance violates the dormant Commerce Clause by imposing burdens on interstate commerce; district court granted summary judgment for Alameda; Ninth Circuit reviews de novo.
The parties stipulated the Ordinance only applies to entities that sell or distribute in Alameda and does not require conduct outside Alameda; plaintiffs did not present evidence the Ordinance would disrupt the flow of goods into/out of Alameda.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the Ordinance discriminates against interstate commerce	Ordinance is tariff-like and shifts costs onto out-of-state interests, discriminating against interstate commerce	Ordinance is geographically neutral, treats all manufacturers the same, affects in-county interests and thus political restraints apply	Not discriminatory — applies evenhandedly and does not resemble a tariff
Whether the Ordinance directly regulates commerce outside Alameda	Ordinance controls out-of-state manufacturers because their only connection to Alameda is interstate commerce	Ordinance regulates in-county conduct; it does not control conduct beyond Alameda’s borders per stipulations	Does not directly regulate interstate commerce; Healy-type control beyond borders not shown
Whether the Ordinance imposes a substantial burden under Pike balancing	Shifting costs to manufacturers imposes significant economic burden on interstate commerce	Burden is minimal relative to manufacturers’ Alameda revenue; no evidence flow of goods will be interrupted	Plaintiffs failed to show a substantial burden on interstate commerce
Whether local benefits are outweighed by burdens (Pike test)	Benefits are illusory because county could achieve same ends without imposing on interstate actors	Ordinance advances legitimate environmental, health, and safety interests; revenue savings are cognizable benefits	Local safety/environmental benefits are real and not clearly outweighed by the burden; Pike balancing upheld the Ordinance

Key Cases Cited

Brown-Forman Distillers Corp. v. N.Y. State Liquor Auth., 476 U.S. 573 (establishing two-tier dormant Commerce Clause framework)
Healy v. Beer Inst., 491 U.S. 324 (direct regulation test: control beyond state borders)
Pike v. Bruce Church, Inc., 397 U.S. 137 (balancing test: burden vs. local benefits)
United Haulers Ass’n, Inc. v. Oneida-Herkimer Solid Waste Mgmt. Auth., 550 U.S. 330 (upholding local solid-waste regulation and political-accountability rationale)
W. Lynn Creamery, Inc. v. Healy, 512 U.S. 186 (tariff-like measures and distorting production geography)
Pharm. Research & Mfrs. of Am. v. Walsh, 538 U.S. 644 (upholding state regulation imposing obligations on manufacturers)
Assoc. des Eleveurs de Canards et d’Oies du Quebec v. Harris, 729 F.3d 937 (9th Cir.) (statute affecting out-of-state producers not per se invalid when applied evenhandedly)
S.D. Myers, Inc. v. City & Cnty. of San Francisco, 253 F.3d 461 (9th Cir.) (analysis of direct regulation and Pike balancing)
Nat. Ass’n of Optometrists & Opticians v. Harris, 682 F.3d 1144 (9th Cir.) (Pike substantial-burden threshold and alternatives inquiry)