Astra USA, Inc. v. Santa Clara County (09-1273)

argument 09-1273

Astra USA, Inc. v. Santa Clara County

Supreme Court of the United States 57 min 5 speakers 8 chapters transcribed 6 days ago official recording ↗

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What are the three reasons Section 340B entities lack a cause of action to enforce the pharmaceutical pricing agreement?

John G. Roberts 0:00

Next this morning in Case 09-1273, Astra USA v. Santa Clara County. Ms. Blatt.

Courtney Rae Hudson 0:07

Thank you, Mr. Chief Justice, and may it please the Court. There are three reasons why Section 340B entities do not have a cause of action to enforce the pharmaceutical pricing agreement between the Secretary and manufacturers. The first reason is that this common law breach of contract suit is indistinguishable from an implied right of action to enforce the statute. A right respondent concedes it does not have.

Elena Kagan 0:38

I don't understand that. Private contract is just that. Two parties go into the contract. They set the terms of their deal. No one forced the manufacturers to enter into this deal. So why isn't the issue exactly what the circuit court said? What was the intent of the parties to the contract? You want to make it Congress's intent, but this is a private deal between you. And Congress may have specified some terms to include, but

Courtney Rae Hudson 1:15

— Yes, and the — what is being challenged here is the contractual term that incorporates in Hike-Verba the manufacturer's ceiling price obligations under the Act. And a third-party beneficiary suit to enforce the contract asserts the same right, seeks the same remedy, and causes all the same disruptions as a right of action to enforce the statute. And another way of saying that is if the case begins with the premise that Congress foreclosed 340 entities from bringing an applied right of action through the front door, Congress did not leave the back door open to essentially the same suit.

Elena Kagan 1:59

How do you answer the point that if Congress wanted to make this a pure regulatory statute, it wouldn't have even required a contract? It would have just passed a statute that says anyone who wants to sell to the States or to the 340B entities, you can't charge more than this price. Why do we even need a contract unless inherent with it is some discretion in the agency who's administering it, discretion that is consistent with normal contracts?

Courtney Rae Hudson 2:36

MS. Right. Well, our position is obviously that the parties had no discretion to confer Article III power on courts to enforce an act of Congress, and this is. But the basic answer is that there has always been a huge difference between the settled rule that parties to a statutory contract are enforceable. They have a cause of action to enforce the contract because Congress spoke with unambiguously clear language that the parties could sue. That's the way statutory contracts must work. They must be enforceable. But your answer sort of is the practical matter, what's the difference, is this is a contract. And we do think that the Federal law of contracts and contractual remedies flow between the parties to the contract.

Courtney Rae Hudson 3:21

It's a bilateral agreement. It's not a regulation. And the Secretary made specific enforceable promises. And there's obviously no even operation of the statutory mandate without the contract. But the reverse, in terms of the long-settled rule that parties must be able to sue to enforce a contract, there's an equally settled rule that beneficiaries under a statute do not have the right to enforce it unless there's a cause of action. Now, the test that I think Respondent advocates and that the Ninth Circuit advocates applied is a test that this Court has long since discarded, which is, well, I'm a beneficiary and this is a good idea and this is sensible. But even if you don't buy our test of you have to imply the implied right of action, these lawsuits are neither sensible nor a good idea and not what Congress intended.

Courtney Rae Hudson 4:11

And here's why. And it's basically the second and third reason. So no matter how you come at this case, and the lens through which you look at this, I think everyone should come out to the same place, which is that neither Congress nor the Secretary nor the manufacturers signed up to what is in essence would be over 14,000 lawsuits against 500 manufacturers, challenging the pricing for over 35,000 medications under Medicaid. JUSTICE SOTOMAYOR

Elena Kagan 4:38

Your adversary claims you gave up your argument that the contract doesn't make