*1 procedures for the conduct of the official who certain analysis, as well as SEC defendants, April hearing. investigation of oversaw by way testimony permitted present Accordingly, we find that the District report support expert affidavit or of an its in conduct- Court did not abuse discretion Also, objections. legal position any filed ing hearing in the manner it did. position ad- appellants urge, which was by the Trustee and the SEC vanced VI. CONCLUSION subject alleged to the taints should assets above, freeze, fully pertain- For the reasons stated subject to the had been remain ing procedural and the by prior to the freeze orders the Trustee and SEC briefed orders, af- the District Court orders are time that the District Court issued appеal firmed. This from the fee order is May lifting 11 order the freeze from these jurisdiction. dismissed for lack of assets. note that where there is a re
We proceeding equitable power
ceiver with it, the District has wide discre
before Elliott, proceed. See
tion as to how (noting court’s wide discretion
F.2d at 1566 receivership); equity relief in
to determine (9th Hardy, F.2d
SEC v. Cir.1986) may (noting that a court use sum PHARMACEUTICALS, equi mary proceedings determine relief to. Plaintiff-Appellant, ty receivership). Appellants have failed v. rule or theory posit or a relevant advance precedent that would have been case HEALTH & DEPARTMENT OF they if continuing the freeze had not basis for SERVICES; Fi- Health Care HUMAN thwarted in their effort to obtain been Administration; nancing Palmetto Gov- assuming appel necessary proof. Even Administrators, De- ernment Benefits right procedural arguable had an lants fendants-Appellees. seek, they they failed to protections have No. 97-2773. they рrejudiced how were or harmed show summary they have proceedings, since Appeals, States Court United theory whereby a could no freeze articulated Fourth Circuit. A, appropriate as to the B possibly have been Sept. 1998. Argued Elliott, at 1567 or D funds. See 953 F.2d they (stating “appellants must show how Decided Nov. summary proceed prejudiced were ings they how have been better would plenary their interests
able to defend Wencke, F.2d at 837-38
proceeding”); summary proceedings are suffi
(holding that to show he was
cient where failed how proceedings).
prejudiced such appellants may wish to
Again, the fact that recovery
pursue a cause of action
taints, enterprise theo- under a common even a freeze of
ry, not constitute a basis for does parte at the behest of the SEC.
assets ex pursuit of the taints is legal action in
Since receivership
clearly contemplated has bankruptcy proceedings, no harm implementation of the court’s
been done *2 Hoover, Hogan Craig A. &
ARGUED: L.L.P., Hartson, D.C., Ap- for Washington, Staff, Simon, pellant. Appellate Civil Maria Division, Department of United States Jus- D.C., tice, Appellees. Washington, for ON Braff, Leitch, BRIEF: David Adam Ho- G. Hartson, L.L.P., D.C., Washington, gan & for Hunger, At- Appellant. Frank W. Assistant General, Josey, torney Rene United States J. McIntosh, Staff, Attorney, Appellate Scott R. Division, Department United States Civil Justice, D.C., Washington, Appellees. for WILLIAMS, MURNAGHAN, Before MOTZ, Judges. Circuit Judge by published opinion. Affirmed DIANA MOTZ wrote the GRIBBON Judge opinion, in which MURNAGHAN joined. opinion Judge WILLIAMS wrote concurring concurring part judgment.
OPINION MOTZ, Judge: Circuit DIANA GRIBBON Pharmaceuticals, (TAP), appeals TAP Inc. complaint for lack of from dismissal of TAP Medi seeks policy. That re care reimbursement paid for duces the amount of reimbursement prostate drug manufac Lupron, cancer TAP,to paid amount tured Zola dex, drug cancer competing prostate made company. The district another concluded that the interests asserted court do by TAP in this action not fall within protected the Medicare of interests” “zone Palmetto and that therefore October Government program, Part B (Palmetto), rely Benefits Administrators which Although lacked to sue. we administers Medicare Part benefits different than those set reasons somewhat authority South Carolina under court, reach the same forth the district we Financing Health Administration and Care *3 Accordingly, we affirm. conclusion. Department the United States of Health and (collectively, Human Services Govern- I. ment), adopted policy that TAP seeks to challengе policy provides here. The that prostate cancer Lupron and Zoladex treat doctors will be reimbursed for the cost of of the same basic chemical mecha- means Lupron only at the reimbursement level of nism, they achieve the same level less-expensive Zoladex. Prior its drugs have different effectiveness. The two adoption, expenditures Palmetto reimbursed action, however, particular rates of and their drug’s for each on the basis of that own implicate different ad- chemical formulations cost. reactions. verse change policy on Palmetto based this liquid form Lupron is administered therapeutic that “there is no dif- conclusion injection 22-gauge with a an intramuscular drugs, although ference between” two needle, as a while Zoladex is administered acknowledged Lupron has a later TAP’s pellet injected larger, with a under skin greater In duration of action. the most recent larger 16-gauge 14- or needle. The needle Lupron policy, version of the Palmetto states administering may used in Zoladex occasion- that “there is no demonstrable difference ally complications, cause such as keloid scar- efficacy” Lupron clinical between and Zola- hematoma, ring bleeding are or which less policy dex. This latest version of the also Lupron injection. The likely to occur with a Lupron loosens the reimburse- restriction that, suggests of Zоladex at manufacturer patients receive ment. It allows who wish to option physician patient, or the of the up the difference in cost Lupron to make bandage in ad- local anesthetic and be used own, Lupron Zoladex on their between drug. procedures ministering the Such are provides and it there are true medi- “[i]f unnecessary Lupron. with Some doctors requiring [Lupron] cal indications the use of prefer Lupron to Zoladex because of its less [Zoladex], Medicare will consider instead of invasive means of administration. in cost if an reimbursement for the difference the medical and documentation of invoice Lupron Zo- Many patients who receive or necessity accompanies the claim.” portion their health care ladex have a that the Medicare Car- Palmetto maintains B, a by Medicare Part federal costs covered adopt the new authorized it to riers Manual provides supplementary medi program that Manual provision of the Lupron policy. One elderly. 42 U.S.C.A. cal insurance to the pay carriers to for durable instructs (West 1395j-1395cec Supp.1998). §§ 1992 & (DME) a level based on the equipment Generally, Part B covers “reason Medicare “medically ap- costly alternative where least necessary” medical services for able and realistically feasible alternative propriate and injury “diagnosis treatment of illness оr or or Compl. at 5 pattern[s] of care” are available. functioning of a malformed improve the 2100.2(B)). pro- § Another (quoting Manual 1395k, §§ body Id. member.” that carriers have of the Manual states vision 1395y(a)(1)(A). Though Medicare Part costly apply least alterna- “discretion” medication, prescription most does not cover payment for non-DME principle “to tive Zoladex, drugs, Lupron like it does cover (quoting well.” See id. items and services as by doctors typically administered which are 7505.1). § Manual hospital Id. during or visits. office reim- 1395x(s)(2)(A). Lupron alleges the new § reimburses doc Medicare regula- a Medicare policy violates cost of such bursement percentage for a tors drugs 1395Z,1395u(o)(l); for 1395k, providing that rеimbursement §§ tion drugs. Id. lower 405.517(b)(1998). “based on the Lupron must be § such as C.F.R. Lupron acquisition right na no cost or the fore had of the estimated drug.” average price light in court. of our tional wholesale resolution 405.517(b). C.F.R.§ TAP asserts appeal, we too need address basing Lupron for reimbursement on the first issue. Zoladex, rather than on cost of
cost
itself,
Al
regulation.
violates
II.
super
though
regulation has now been
(APA)
Procedure Act
Administrative
Act,
by a
amendment
seded
provides
person suffering legal
that “[a]
provides
payment
covered
which
adversely
wrong,
aggrieved
or
affected
average
drugs
95% the
is to be made at
meaning
agency
of a rele
action within
1395(o)(1),
price,
42 U.S.C.
wholesale
*4
statute,
judicial
vant
is entitlеd to
review
regarding
regulation
the
TAP’s contention
(West 1996).
§
thereof.”
5 U.S.C.A.
702
as
applies equally well to the statute
amende
Court, however,
Supreme
has concluded
cost of
d.1 Both base reimbursement on the
provides
APA in fact
more limited
the
used,
Lupron policy
the
the
while
new
statutory
might
rights
language
than the
on the cost of another
bases reimbursement
suggest.
prudential
In accordance with its
drug.
rules,
standing
the Court has held that the
alleges
adopted
also
that Palmetto
party
agency
permits
APA
to
Lupron policy
com
without
notice and
only
sought
action in court
if “the interest
to
statute,
required
5
ment
see
U.S.C.A.
protected by
complainant
arguably
be
is
553(West
1996);
§
42
U.S.C.A.
protected
of
to
within
zone
interests
be
(Wеst
1395hh(a)(2),(b)
1996);
§
that Palmet
ques
...
regulated
is
therapeutic
to’s conclusion that “there
no
Processing
Data
tion."Association
Serv.
of
Lupron
difference between”
and Zoladex
150,
Orgs.
153,
Camp,
v.
397
90
S.Ct.
adoption
lacked
and
of
a scientific basis
so its
827,
(1970) (interpreting
25
5
L.Ed.2d 184
Lupron policy
upon
the new
reliance
702).
§
U.S.C.
arbitrary
capricious,
and
see 5
conclusion was
706(2);
finally
§
U.S.C.A.
and
Palmet
years
of
For a number
Court
to’s
violated 42
reimbursement
explain
did not further
this “zone
how
of
1395y(a)(1)(A),
prohibits
§
U.S.C.A.
which
applied.
interests”
was to be
In the
test
any
payment for
item that
not “reasonable
interim, we and other courts concluded that
necessary.”
and
rests
“the zone test
on the need
secure the
statutory program
of a
for the
benefits
confronting the merits of these
Without
groups
intended
allegations,
dis-
the Government moved to
benefit.”
Block,
Exporters
v.
Tobacco
Ass’n
complaint
grounds.
miss TAP’s
on three
Leaf
(4th Cir.1984)
1106, 1111
(1)
(emphasis
F.2d
add
argued
The Government
that TAP’s com-
ed);
Co.,
Mortgage
Moses v.
standing
not
see also
Banco
plaint
prudential
did
meet
re-
(5th Cir.1985)(“[a]
(2)
267,
778 F.2d
quirements;
that Medicare Part B statu-
(3)
torily
of
if he is a
precluded
complaint;
will fall within
interests
TAP’s
persons
of
class
in
that TAP lacked Article III
The member
who was
complaint
district court dismissed TAP’s
tended
be benefited
statute or
contentions,
solely
regulation”);
Department
v.
based
on the first of these
Alschuler
finding
company
satisfy
Housing
Development,
that the
did not
and Urban
686 F.2d
(7th Cir.1982)
472,
standing
standing requirements
(denying
there-
prudentiаl
amendments,
1395l(a) (West 1992). Drugs
§
1. Prior to the 1997
U.S.C.A.
like
governing
provisions
for medi-
and Zoladex come within the definition
reimbursement
indicated,
services,”
clearly
of "medical and other health
id.
cation also
albeit less
than
TAP,
1395x(s)(2),
regulation
relied on
that reimbursement
therefore the benefit amount
drug actually
provisions
apparently
based on the cost of the
of section 13957 would
to be
(a),
provided.
applied
prior
de-
Section 13957
the section that
have
them
1997 amend
cases,
into
in most
ments. Since
amendments came
ef
termines
amount
benefits
fect, however,
specific language
provides
payment
percentage
cost
of section
for
of a
more
services,”
95u(o)(1)
clearly
which
meаns the ser-
13
has controlled reimbursement
"the
actually
beneficiary.
drugs,
provided
noted in the text.
vices
(the
(1987)
zone of
statutory provi
Id. at 935. the instant protected” by initially “arguably Medi what interests the interests must determine “arguably” pro- conflicting positions sug program B. Their Medicare Part care Part statute, the inter- then ask whether gest tects. We must our examination of what allegedly history have been affected regulations, legislative ests of TAP that leads and the i.e., B, challenged agency many like us conclude: Medicare Part action — among ar- Lupron policy the interests statutes, compromise between embodies —are Part guably protected Mediсare B. feasibili ideals of achievement economic ty puts purposes in tension. basic
III.
The Act
to “make the best of modern
seeks
aged,”
readily
medicine more
available
A.
covering only
tries
do so
“reason
but it
maintains
Government
necessary”
a manner that
able and
care in
protected by
arguably
interest
integrity
sys
will ensure the financial
program is
interest “of
Medicare Part B
Perhaps the clearest indication
tem.
elderly
receiving
affordable medical
pro
in its
competing goals appears
statute’s
insurance,”
inter
that TAP’s commercial
establishing
vision
that health care services
goal.
this
ests are at odds with
statutorily-
generally be covered at
will
Appellees
support
Brief of
this
percentage
their
cost.
defined
position, the
cites the statute’s
Government
(West
Supp.1998).
&
U.S.C.A.
1395l
provision of
for the cost
“reason
insurance
Through
provision, the Act makes all
this
necessary”
able and
medical care.
necessary
levels
reasonable
§ 1395y(a)(1)(A). The Government
U.S.C.A.
readily
aged,
while
care more
available to
argues
statutory language
shows
discouraging
at the same time
excessive ex
enacting
leg
Congress’s
sole intention
*6
penditure by requiring
pay
to
beneficiaries
of protecting
to have been that
islation
proportionate
of the cost of the
a
share
integrity
program.
financial
the Medicare
they
services
use.
in-
important
TAP
that
contends
the most
however, TAP need
standing,
To have
not
protected
the Medicare Part
terest
precisely
an interest
that
assert
coincides
provision
of excellent medical
program is
by Congress
struck
between
with
balance
elderly.
accordingly
to the
It
denies
care
rather,
conflicting purposes;
the Act’s
it
necessary” lan-
that
the “reasonable
only
need
show that its “interests affected
guage in the
a cost limita-
statute involves
“among”
agency
action” are
those that
tion,
instead,
argued;
as the
has
Government
arguably
sought
protect.
long
has
phrase
TAP maintains that the
been
S.Ct. at 935.
interpreted by
itself mean NCTJA
the Government
merely
Appel-
Brief of
“safe and effective.”
only
Considering
the statute’s interest
Shalala,
5;
lant at
see Estate Aitken v.
providing high-quality
care does not
(D.Mass.1997).
TAP
ar-
F.Supp.
also
TAP,
a
lead to resolution favorable
howev-
attempts
gues that the
failed
Government’s
assertions,
Contrary
er.
to TAP’s
the inter-
introducing
promulgate
regulation
est
is
the same as the
that
asserts here
not
existing
cost-based limitation show that
making
statute’s interest in
the best of medi-
regulatory scheme has no such limitation.
readily
aged.
to the
cine more
available
Reg.
Appellant
(citing
Brief of
6-7
54 Fed.
TAP
seeks to increase distribution
Lu-
1989)).
(Jan. 30,
heavily
relies
specifically allege
pron, but it does not
phrase
legislative history stating
medicine,
Lupron
it has
is the best of
not
Part B
“to
Medicare
sеeks
make
best
definitively
otherwise
contended
LU-
readily
medicine more
modern
available
PRON is “better” than Zoladex.
(1965),
aged.”
Rep.
re-
S.
No. 89-404
general
regard
if
TAP’s more
1965. TAP
Even
we
printed in 1965 U.S.C.A.N.N.
superiority
asserting
allegations
in sell-
as
contends
its commercial interests
“mak[ing]
Lupron,
interest
ing
Lupron
possible coincide with
the statute's
as much
readily
the best of modern medicine more
goal.
this
available,
Lupron
but because it fails to make
aged”
would not coincide
available
Quotation
entire
TAP’s
The
with
interest.
available on the same basis as Zoladex.
fragment
much cited
sentence which
legislative history stating that
history
makes the differ-
legislative
occurs
modern
seeks “to make the best of
medicine
рlain:
“The
of insurance
ence
however,
readily
aged,”
more
available to the
encourage
costs would
against the covered
express
cannot be read to
an interest
institutions, agencies, and
participating
making different
treatments
for the same
medi-
individuals to make the best of modern
condition available on the same basis. The
readily
aged.”
cine more
available to
agen-
interest of TAP that is “affected
(1965), reprinted in 1965
S.Rep. No. 89-404
therefore,
cy
question,”
action in
does
express-
This statement
U.S.C.A.N.N. 1965.
making
coincide with the statute’s interest in
that,
expectation
as a result of the
es an
of medicine more available to Medi-
best
coverage of health carе costs under Medicare
recipients.2
care
B,
agencies, and
hospitals,
Part
health care
provide
reluctant to
doctors will become less
B.
elderly patients.
high-quality medical care to
Part B is here envisioned as
Medicare
Although
point
TAP addresses the
rectifying a situation in which
means of
passing,
claim
another
its basic
raises
first-rate ser-
providers
health care
denied
among
“arguably
interest that could be
they
aged
because
lacked insur-
vices
protected” by Medicare Part B. This is
statement,
import
The main
ance.
enforcing
regulatory
interest
TAP’s
then,
that the
to make
statute seeks
statutory provisions
require
reim
readily
“more
available”
best of medicine
drug
for a
tо be based not on the
bursement
than it would be in the absence Medicare
competing drug,
Lupron
as in the
cost of
Lupron
Part B. The
achieves
policy,
rather on the cost of the
but
covered,
statutory purpose:
is still
1395u(o)(1);
§
itself.
42 U.S.C.
See
portion
is still
for a
of its cost
reimbursement
405.517(b).
1395Z;
§
U.S.C.
C.F.R.
Lupron is thus made more
provided, and
decision in NCUA
aged than it would be
Court’s
readily available to the
suggest
Part B. TAP’s
that the
asser-
in the absence of Medicare
could be read
bare
attacking
Lupron policy
enough
must
interest in
an interest would be
tion of such
something
making
than
therefore be in
other
limitations on
prudential
over-come
*7
in the
challenging
the
of medicine more available
best
banks
There the Court held that
history.
legislative
in the
sense articulated
the
agency policy
allegedly
violated
an
provision of the Federal
“common bond”
actually
to make
TAP
seeks not
inter-
Act
the zone of
Union
satisfied
Credit
readily
than it would be
“more
available”
NCUA,
at 936-38.
ests test.
B,
make
Part
but rather to
without Medicare
though
this conclusion even
Court reached
now,
it
under the
it more available than
is
provi-
nothing other than the common bond
sense, TAP’s asserted
Lupron policy. In this
congressional concern
itself indicated a
sion
something very different
claim strives for
interests,
banks,
competitive
for
their
history
legislative
identi-
than that which the
alleged
general.
Id. TAP has
Moreover,
competition
goal.
TAP
fies as a
Lupron policy violated the Medicare
that the
policy
objects
present
the
reimbursement
to
detriment,
claim would
and so its
Lupron more Act to its
it fails to make
not because
making
purpose
holding
reject
the Medicare Act's
of
recognize
we are
related to
We
that in so
elderly.”
available to the
ing
position
Ioptex
the best of medicine
taken in
Research v. Sulli
the
text,
believe,
Dec.10, 1990),
van,
(C.D.Cal.
set forth in
We
for the reasons
Id.
incidental decisions, publish operated by their merely if TAP is an incidental benefi- Thus reimbursing publica- costs courts for the statute, satisfy ciary of the fails way princi- tion. the same that one standing requirements no prudential relevant pal purposes of Medicare Part B—to make acutely it to enforce the matter how desires aged— care more available provisions. statute’s directly implicates the interests of com- *8 TAP, certainly panies purpose the main
Drug companies like TAP do not like directly publication implicates of the Medi- case statute constitute direct beneficiaries companies. reporting of ease program. But NCUA indicates the interests care Part statutory provision Lujan exam- qualify something as more than The they that do contrast, ple, by presumably A enacted as merely beneficiaries. statute incidental part princi- a a more avail- scheme that had strives to make medical care that holding pal purpose that of hear- elderly directly implicates the other than to the able record, reporting companies by expanding ings on the so interests (albeit markets, fairly be de- just conversely) company’s interest there could as their “marginally growth un- incidental or related” of credit scribed as promoting statute Compared plaintiff to the in directly purpose. implicated in inter- ions NCUA then, Lujan example, ap- TAP does not institutions competing financial ests beneficiary. effect, pear merely an working, their markets. be incidental to contract however, above, Lujan a determination v. As noted Supreme The decision Court’s 871, Fed’n, merely benefi- 110 an incidental 497 National U.S. Wildlife
207
521,
necessarily
111
it
at
S.Ct. 913. The Court ruled that
eiary does not mean
only
It
the workers did not come
the zone of
passes the zone of interests test.
within
rejected
monopoly
sought
interests that the
that TAP’s claim cannot be
statutes
means
519, 530,
protect.
“incidental
Id. at
111
913.
on this basis. Other than the
S.Ct.
standard,
distinguished
beneficiary”
proved
has
The Court
its own
which
in-
here,
specific
ruling
referring
forth no
from that in Air Courier
conclusive
NCUA set
one,
cases,
evaluating
like this
to the Air
mention of com-
guidelines for
Courier Court’s
standing
solely petitive
rests
further noted
party’s
[in
a
claim to
interests: “We
Air
where
although
ques-
enforcement оf
the statute in
]
on an asserted interest
Courier
But,
statutory provision.
regulated competition,
the entire thrust
tion
a
interests of
holding
validity
plaintiff employees
nothing
of the NCUA
reiterates
to do
had
NCUA,
requires
competition.”
with
of a zone of interests test that
some-
In these
we do best to hew
if it
interests test
asserts the interests of a
closely
particulars
Supreme
Court
subject
competitor
Data
class.
Pro-
determining
precedent
the limits of the
cessing supports
approach. The
Court
holding
zone of interests test. The NCUA
granted
competitor plaintiffs
there
stand-
finding
resulted
in a
that commercial
ing
part
on the rationale that “those
based
directly regulated
competitors of the entities
directly
are
affected
whose interests
satisfy the zone of interests
interpretation
narrow
of the Acts
broad or
Although
test.
the NCUA Court did not
157,
easily
397
at
90
are
identifiable.”
U.S.
competitors,
expressly limit
rationale to
it
its
When,
here,
concerns
S.Ct. 827.
statute
entirely
rely
on cases in which
did
almost
class,
specified
are
whose interests
cоmpetitors
found to have
were
directly
by a broad or narrow
most
affected
Clarke,
408,
750;
107 S.Ct.
See
U.S.
interpretation of the
are even more
statute
617,
Camp,
v.
401 U.S.
Investment Co. Inst.
Processing
easily
As Data
identifiable.
(1971);
621,
1091,
L.Ed.2d 367
91 S.Ct.
Arnold,
they
progeny suggest,
parties
are the
Tours,
45, 46,
Camp, 400
Inc. v.
expressly subject to the statute and the com-
(1970)
158,
(per
regulatory scheme. argued fully before
ment was not briefed properly court and therefore was not Mortgage Canady v.
raised. See Crestar (4th Cir.1997). As a
Corp., 109 F.3d
result, I the discussion con- conclude that unnecessary.
tained in Part III.B is
AMERICAN AUTOMATIC SPRINKLER
SYSTEMS, INCORPORATED,
Petitioner,
v. LABOR RELATIONS
NATIONAL
BOARD, Respondent, Sprinkler Local No.
Road Fitters Union AFL-CIO,
669, U.A., Intervenor.
National Labor Relations
Board, Petitioner,
.v Systems, Sprinkler
American Automatic Respondent,
Incorporated, Sprinkler Fitters No.
Road Local Union
669, U.A., AFL-CIO Intervenor. 97-1821,
Nos. 97-2014. Appeals, Court of
United States
Fourth Circuit.
Argued Sept. 1998.
Decided Dec.