Jerry BEEMAN and Pharmacy Services, Inc., dba Beeman‘s Pharmacy; Charles Miller, dba Medicine Shoppe; Anthony Hutchinson and Rocida, Inc., dba Finley‘s Rexall Drug; Jim Morisoli and American Surgical Pharmacy, Inc., dba American Surgical Pharmacy; Bill Pearson and Pearson and House, on behalf of themselves and all others similarly situated and on behalf of the general public, dba Pearson‘s Medical Group Pharmacy, Plaintiffs-Appellants, v. TDI MANAGED CARE SERVICES, INC., dba Eckerd Health Services; Medco Health Solutions, Inc.; Express Scripts, Inc.; Advance PCS, Defendants-Appellees.
Nos. 04-56369, 04-56384
United States Court of Appeals, Ninth Circuit
Filed June 2, 2006
449 F.3d 1035
Before MARY M. SCHROEDER, Chief Judge, MYRON H. BRIGHT, and HARRY PREGERSON, Circuit Judges.
Argued and Submitted April 3, 2006.
E
In sum, none of the four factors upon which the NRC relies to eschew consideration of the environmental effects of a terrorist attack satisfies the standard of reasonableness. We must therefore grant the petition in part and remand for the agency to fulfill its responsibilities under NEPA.
Our identification of the inadequacies in the agency‘s NEPA analysis should not be construed as constraining the NRC‘s consideration of the merits on remand, or circumscribing the procedures that the NRC must employ in conducting its analysis. There remain open to the agency a wide variety of actions it may take on remand, consistent with its statutory and regulatory requirements. We do not prejudge those alternatives. Nor do we prejudge the merits of the inquiry. We hold only that the NRC‘s stated reasons for categorically refusing to consider the possibility of terrorist attacks cannot withstand appellate review based on the record before us.
We are also mindful that the issues raised by the petition may involve questions of national security, requiring sensitive treatment on remand. However, the NRC has dealt with our nation‘s most sensitive nuclear secrets for many decades, and is well-suited to analyze the questions raised by the petition in an appropriate manner consistent with national security.
VI
We deny the petition as to the claims under the AEA and the APA. However, because we conclude that the NRC‘s determination that NEPA does not require a consideration of the environmental impact of terrorist attacks does not satisfy reasonableness review, we hold that the EA prepared in reliance on that determination is inadequate and fails to comply with NEPA‘s mandate. We grant the petition as to that issue and remand for further proceedings consistent with this opinion.
PETITION GRANTED IN PART; DENIED IN PART; REMANDED.
Thomas N. Makris, Andrea L. Courtney, Pillsbury Winthrop Shaw Pittman LLP, Sacramento, CA, Daniel A. Johnson, Richard T. Williams, Holland & Knight, Los Angeles, CA, Richard S. Goldstein, Heller Ehrman LLP, New York, NY, John M. Landry, Joshua D. Taylor, Richard S. Goldstein, Heller Ehrman White & McAuliffe, LLP, Los Angeles, CA, Gail E. Lees, Christopher Chorba, Gibson Dunn & Crutcher, LLP, Los Angeles, CA, Angela S. Quinn, Husch & Eppenberg, LLC, St. Louis, MO, Lawrence P. Riff, Steptoe & Johnson, Los Angeles, CA, Martin D. Schneiderman, Steptoe & Johnson, LLP, Washington, DC, for the appellees in No. 04-56369.
Molly Moriarty Lane, Richard Odom, Morgan Lewis & Bockius, LLP, San Francisco, CA, Michael Katz, Charles E. Patterson, Morrison & Foerster, Los Angeles, CA, C. Lee Ann McCurry, Troutman Sanders, Atlanta, GA, Kent A Halkett, Musick Peeler & Garrett, LLP, Los Angeles, CA, Lawrence P. Riff, Jason Levin, Steptoe & Johnson, Los Angeles, CA, Thomas N. Makris, Andrea L. Courtney, Pillsbury Winthrop Shaw Pittman LLP, Sacramento, CA, Brian D. Martin, Pillsbury Winthrop Shaw Pittman LLP, San Diego, CA, Robert F. Schoular, David S. Alverson, Sonnenschein Nath & Rosenthal, LLP, Los Angeles, CA, James W. Mercer, Santa Monica, CA, Neil R. O‘Hanlon, Hogan & Hartson L.L.P., Los Angeles, CA, Nicholas P. Roxborough, Craig S. Pynes, Roxborough, Pomerance & Nye, LLP, Woodland Hills, CA, Alex R. Baghdassarian, Holland & Knight LLP, Los Angeles, CA, J. Kevin Snyder, Dykema Gossett LLP, Los Angeles, CA, Sean M. Sherlock, Snell & Wilmer L.L.P., Costa Mesa, CA, Robert A. Muhlbach, Kirtland & Packard, El Segundo, CA, Kurt C. Peterson, Lisa M. Baird, Reed Smith, LLP, Los Angeles, CA, Robert P. Mallory, Mathew Oster, McDermott Will & Emery, LLP, Los Angeles, CA, for the appellees in No. 04-56384.
BRIGHT, Circuit Judge.
Plaintiffs-Appellants Pharmacies brought suit against Defendants-Appellees Pharmacy Benefit Managers (“PBMs“) based on violations of
I
This case involves the relationship between PBMs (referred to in
In 1981, the California Pharmacists Association introduced a bill which would require PBM reimbursements at customary charges made by pharmacies rather than the rates unilaterally set by PBMs. However, the bill that passed merely required PBMs to conduct or obtain the results of bi-annual studies of a statistically significant sample of California pharmacies’ retail drug pricing for pharmaceutical dispensing services to private uninsured customers, and supply copies of those studies to “clients” on whose behalf the PBMs perform studies. See
The Pharmacies sought to enforce
II
Standing issues are reviewed de novo. Viceroy Gold Corp. v. Aubry, 75 F.3d 482, 487-88 (9th Cir.1996). The district court‘s interpretation of a statute is a question of law also subject to de novo review. Id. at 488. This court may affirm the district court‘s judgment on any ground supported by the record. Atel Fin. Corp. v. Quaker Coal Co., 321 F.3d 924, 926 (9th Cir.2003).
III
The Pharmacies claim, among other things, they have suffered procedural injury sufficient to give them Article III standing. “To satisfy the injury in fact requirement, a plaintiff asserting a procedural injury must show that the procedures in question are designed to protect some threatened concrete interest of his that is the ultimate basis of his standing.” Citizens for Better Forestry v. USDA, 341 F.3d 961, 969 (9th Cir.2003) (citations omitted). “Furthermore, he or she ‘needs [to] establish the reasonable probability of the challenged action‘s threat to [his or her] concrete interest.‘” Id. (citation omitted) (alteration in original).
A violation of Section 2527 may result only in imposition of a civil remedy.... Any owner of a licensed California pharmacy shall have standing to bring an action seeking a civil remedy pursuant to this section so long as his or her pharmacy has a contractual relationship with, or renders pharmaceutical services to, a beneficiary of a client of the prescription drug claims processor, against whom the action is brought ....
Thus, sections
Plaintiffs make out a procedural injury: the failure on the part of the PBMs to follow the statutory procedures requiring they conduct studies and provide them to third parties. Cf. Idaho Conservation League v. Mumma, 956 F.2d 1508, 1514 (9th Cir.1992) (“[B]ecause ‘NEPA is essentially a procedural statute designed to ensure that environmental issues are given proper consideration in the decisionmaking process,’ injury alleged to have occurred as a result of violating this procedural right confers standing.” (citations omitted)).
The Pharmacies must still, however, show the procedures are designed to protect some threatened concrete interest. See Mumma, 956 F.2d at 1514 (“The personal injury requirement will be met only if the alleged harm is ‘distinct and palpable ... and not abstract or conjectural or hypothetical.‘” (citation omitted)).
The Pharmacies argue
The PBMs respond that the use of the information in this manner, to the benefit of the Pharmacies, is too remote to create standing: should the third-party payors actually receive the studies, there exists no requirement they use them in the event that they even read them.
When the legislature “is the source of the purportedly violated legal obligation, we look to the statute to define the injury.” Mumma, 956 F.2d at 1514 (citation omit-
Short of assuming the legislature passed a bill with useless procedural provisions, we must conclude such procedures play some, if not a critical, part in future third-party payor decisions. See Mumma, 956 F.2d at 1514. The procedural injury here threatens a concrete interest of the Pharmacies and is thus sufficient to create “injury in fact” for Article III standing purposes.
Nonetheless, the PBMs continue, the Pharmacies must still show causation and redressability. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). They argue the Pharmacies cannot allege facts leading to a reasonable inference that “but for” the PBMs’ alleged failure to provide adequate fee studies, the Pharmacies would have received increased payments. However, as the Pharmacies correctly note, the relevant question is not the ultimate outcome that would result from the properly followed procedures, but rather whether the failure to conduct and disseminate the studies is the “but for” cause of the procedural injury. Cf. Mumma, 956 F.2d at 1517-18 (“The asserted injury is that environmental consequences might be overlooked and reasonable alternatives ignored as a result of deficiencies in the final EIS and ROD. The ultimate outcome following proper procedures is not in question.“).
Regarding redressability, the PBMs argue the Pharmacies cannot allege facts creating a reasonable inference that the failure to provide surveys caused an identifiable injury to any pharmacy, and thus neither statutory damages nor any other remedy sought can be fairly seen as providing redress. This argument, however, merely restates the PBMs’ claim that there exists no “injury in fact.” The procedural injury would be redressed if the PBMs followed proper procedures.
Finally, the PBMs argue the district court should be affirmed on the alternative basis that
REVERSED AND REMANDED.