Walmart v. DOJ, 21 F.4th 300

Background:

Walmart operates pharmacies that dispense prescription opioids and adopted policies allowing pharmacists (and the company) to refuse to fill certain prescriptions or refuse prescriptions from particular doctors.
DOJ investigated Walmart for alleged violations of the Controlled Substances Act (CSA) and formed a civil-enforcement working group; later DOJ filed a civil enforcement suit against Walmart in the District of Delaware.
In October 2020 Walmart filed a declaratory-judgment suit in the Eastern District of Texas asking for nine declarations about pharmacists’ and distributors’ obligations under the CSA (e.g., whether pharmacists must second-guess doctors, impose store- or company-wide refusals, document reasons, or analyze and share aggregate prescription data).
Walmart alleges the government holds contrary positions but points to no public regulation or formal guidance; many of the asserted government positions were expressed only in settlement negotiations or other nonpublic statements.
The district court dismissed for lack of subject-matter jurisdiction, holding Walmart failed to identify ‘‘agency action’’ under the APA waiver of sovereign immunity (Alabama‑Coushatta framework); the Fifth Circuit affirmed, also finding lack of ripeness given the pending Delaware enforcement action.

Issues:

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the APA waives sovereign immunity when a plaintiff challenges government positions here	Walmart: APA §702 waives immunity for equitable relief challenging agency legal positions; DOJ’s asserted positions (including negotiating positions) are agency action	DOJ: Walmart points to no final or public agency action; negotiating positions and settlement threats are not ‘‘agency action’’ under Alabama‑Coushatta	Held: No waiver — Walmart identified no agency action; suit barred by sovereign immunity
Whether government negotiating or settlement positions constitute a ‘‘rule’’ under the APA	Walmart: DOJ’s expressed interpretations function as rules constraining pharmacists	DOJ: Negotiating positions are nonpublic legal theories without prospective, binding effect and therefore not substantive or even non‑substantive rules	Held: Negotiating positions are not APA ‘‘rules’’; nonpublic negotiation stances lack the features of rules
Whether threats or settlement positions constitute ‘‘sanctions’’ under the APA definition	Walmart: Threats to enforce compelled compliance and thus qualify as sanctions ("other compulsory or restrictive action")	DOJ: "Other compulsory or restrictive action" is read ejusdem generis and limited to concrete, enumerated types (e.g., fines, license suspension); contingent threats are not sanctions	Held: Threats/negotiating positions are not ‘‘sanctions’’ under the APA; ejusdem generis limits the clause to concrete actions
Whether Walmart’s declaratory-judgment claim is ripe	Walmart: The legal questions are pure statutory issues and withholding review imposes hardship because compliance risks state and private suits	DOJ: Issues are unripe absent a clear, final agency position; pending Delaware enforcement action provides a concrete forum and reduces hardship/future‑prosecution risk	Held: Unripe — issues not fit for decision (no final/unambiguous agency position) and withholding review imposes little hardship given the Delaware suit; no Article III case or controversy

Key Cases Cited

Alabama‑Coushatta Tribe of Texas v. United States, 757 F.3d 484 (5th Cir. 2014) (Fifth Circuit requires plaintiff to identify specific agency action to invoke APA §702 waiver)
Shell Offshore Inc. v. Babbitt, 238 F.3d 622 (5th Cir. 2001) (internal, unpublished policy that dictated adjudicative outcomes can be treated as rule‑like in narrow contexts)
W&T Offshore, Inc. v. Bernhardt, 946 F.3d 227 (5th Cir. 2019) (similar treatment of internal agency practices functioning as controlling policy in adjudications)
Doe v. United States, 853 F.3d 792 (5th Cir. 2017) (interpretation of APA ‘‘sanction’’ and inclusion of certain withholding‑type actions in agency‑action analyses)
Abbott Laboratories v. Gardner, 387 U.S. 136 (U.S. 1967) (ripeness framework: fitness and hardship factors for pre‑enforcement review)
Orix Credit Alliance, Inc. v. Wolfe, 212 F.3d 891 (5th Cir. 2000) (declaratory‑judgment ripeness requires an actual controversy)
Ohio Forestry Ass’n v. Sierra Club, 523 U.S. 726 (U.S. 1998) (no ripeness where threatened harms are speculative and legal theories unpersuasive)
Susan B. Anthony List v. Driehaus, 573 U.S. 149 (U.S. 2014) (standing/ripeness and credibility of enforcement threats in pre‑enforcement suits)
Regional Rail Reorganization Act Cases, 419 U.S. 102 (U.S. 1974) (ripeness judged by circumstances at time of decision)