Merck & Co. v. U.S. Dep't of Health & Human Servs.

385 F. Supp. 3d 81
CourtCourt of Appeals for the D.C. Circuit
DecidedJuly 8, 2019
DocketCase No. 19-cv-01738 (APM)
StatusPublished
Cited by9 cases

This text of 385 F. Supp. 3d 81 (Merck & Co. v. U.S. Dep't of Health & Human Servs.) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Merck & Co. v. U.S. Dep't of Health & Human Servs., 385 F. Supp. 3d 81 (D.C. Cir. 2019).

Opinion

The industry's opposition to using the WAC also manifested itself as a First Amendment argument. See id. at 20,743 -48. The challengers argued that the WAC Disclosure Rule was compelled speech that violated the First Amendment. See id. at 20,743 -44. The forced disclosure, they maintained, did not pass muster under the intermediate scrutiny standard articulated by the Supreme Court in Central Hudson Gas & Electric Corp. v. Public Service Commission of New York , 447 U.S. 557, 100 S.Ct. 2343, 65 L.Ed.2d 341 (1980), or the more relaxed standard used in Zauderer v. Office of Disciplinary Counsel of the Supreme Court of Ohio , 471 U.S. 626, 105 S.Ct. 2265, 85 L.Ed.2d 652 (1985). See id. at 20,744. HHS rejected these arguments, finding that the WAC Disclosure Rule satisfied both tests. See id.

C. Procedural History

1. This Action and the Motion to Stay

Plaintiffs in this case are three pharmaceutical companies-Merck & Co., Inc.; Eli Lilly and Company; and Amgen Inc.-and the National Association of Advertisers, Inc., a membership organization focused on "promot[ing] and protect[ing] the well-being of the marketing community." Compl. ¶ 21. Plaintiffs filed their Complaint on June 14, 2019, approximately five weeks after the Final Rule's publication. See Compl. They named as defendants HHS; Alex M. Azar II, the Secretary of HHS in his official capacity; CMS; and Seema Verma, the Administrator of CMS

*87in her official capacity (collectively "Defendants"). Id. ¶¶ 22-25.

The Complaint contains one count asserting that the WAC Disclosure Rule violates the Administrative Procedure Act ("APA"), 5 U.S.C. §§ 701 - 706. Id. ¶¶ 110-114. Plaintiffs allege three distinct theories of violation: (1) The WAC Disclosure Rule "exceeds the HHS's statutory authority, see 5 U.S.C. § 706(2)(C) ; (2) it is arbitrary, capricious, an abuse of discretion, and otherwise not in accordance with law, id. § 706(2)(A) ; and (3) it is contrary to the First Amendment of the U.S. Constitution, id. § 706(2)(B)." Id. ¶ 111. Plaintiffs ask the court to declare the WAC Disclosure Rule invalid and to vacate the Rule. Id. at 36.

Contemporaneously with their Complaint, Plaintiffs filed a Motion to Stay the effective date of the WAC Disclosure Rule, set for July 9, 2019, see 5 U.S.C. § 705 (authorizing courts to "postpone the effective date" of agency action in order "to preserve status or rights pending conclusion of the review proceedings"). See Pls.' Mot. for a Stay Pending Judicial Review, ECF No. 12 [hereinafter Pls.' Mot.]; Pls.' Mem. of Law in Supp. of Pls.' Mot., ECF No. 12-1 [hereinafter Pls.' Mem.]. The Motion to Stay rests on two of the three theories advanced in the Complaint: (1) the WAC Disclosure Rule is not a valid exercise of HHS's and CMS's rulemaking authority under the SSA, see Pls.' Mem. at 21-28; and (2) the WAC Disclosure Rule compels speech in violation of the First Amendment, see id. at 28-43. The Motion to Stay did not advance the APA arbitrary and capricious claim. See generally Pls.' Mem. Plaintiffs asked the court to expedite consideration of their Motion. See Pls.' Mot. to Expedite Proceedings on Pls.' Mot., ECF No. 13. The court agreed to do so. See Order, ECF No. 17.

2. Consolidation on the Merits

The court held a hearing on the Motion to Stay on July 2, 2019. See July 2, 2019 Hr'g Tr., ECF No. 31 [hereinafter Hr'g Tr.]. At the hearing, the court inquired whether the parties would be amenable to consolidating the Motion to Stay with a motion on the merits, thereby treating the arguments before the court as seeking entry of final judgment. See id. at 4-7. The parties asked for time to consider the question. See id.

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Cite This Page — Counsel Stack

Bluebook (online)
385 F. Supp. 3d 81, Counsel Stack Legal Research, https://law.counselstack.com/opinion/merck-co-v-us-dept-of-health-human-servs-cadc-2019.