Appeal from a judgment of the Southern District of New York, Vincent L. Broderick, Judge, denying plaintiffs' motion seeking on constitutional grounds a preliminary injunction restraining enforcement of New York's generic drug substitution law, Ch. 776, Laws of N.Y. 1977, which provides for a druggist's dispensing less expensive bioequivalent generic drugs to fill physicians' prescriptions for higher-priced trade name drugs.
Before Smith, Feinberg and Mansfield, Circuit Judges.
This interlocutory appeal concerns a challenge, on federal constitutional grounds, to New York's generic drug substitution law, Chapter 776 of the Laws of New York, 1977 (hereinafter called the "Generic Drug Act" or "the Act"), which provides, subject to certain conditions, for the druggist's dispensing cheaper generic drugs in lieu of trade name drugs in filling doctors' prescriptions. The Southern District of New York, Vincent L. Broderick, Judge, denied plaintiffs-appellants' motion for a preliminary injunction, invoking the abstention doctrine announced by the Supreme Court in Railroad Commission v. Pullman Co., 312 U.S. 496, 499-501, 61 S. Ct. 643, 85 L. Ed. 971 (1941). While the applicability of the abstention doctrine is questionable, we affirm for the reason that in any event appellants fail to meet basic requirements for issuance of preliminary injunctive relief.
Plaintiffs-appellants are the Pharmaceutical Society of the State of New York (a New York not-for-profit corporation), a registered pharmacist, a physician, and a patient-consumer. They challenge the constitutionality of the Generic Drug Act, which amended New York's Public Health and Education Laws by adding Public Health Law § 206(1)(O ) and Education Law §§ 6810(6) and 6816-a. Section 206(1)(O ) of the Public Health Law provides that the Commissioner of Health of the State of New York shall establish and publish a list of drug products which have been certified or approved by the Federal Food and Drug Administration (FDA) as safe and effective for their labeled uses and which are not questioned by the FDA as failing to meet bioequivalency requirements. Section 6810(6) of the Education Law provides that every prescription form shall have two signature lines, one stating "substitution permissible" and the other stating "dispense as written." If the "substitution permissible" line is signed by the physician, then the physician must inform the patient that the pharmacist "will substitute" a generic drug product on the list established under Public Health Law § 206(1)(O ).
Section 6816-a of the Education Law provides that the pharmacist "shall substitute a less expensive drug product containing the same active ingredients, dosage form and strength as the drug product prescribed" if the prescription indicates "substitution permissible"*fn1 and the substituted drug product is on the established list. The label on the immediate container in which the generic drug is dispensed must reflect the name and strength of the drug product and its manufacturer.
Appellants argue that the Generic Drug Act is unconstitutional on several grounds. First, they assert that on its face it creates an excessive burden on interstate commerce by prohibiting the sale of a safe and effective drug product (i. e., the higher priced brand name drug) solely because of its price. Next, they contend that the Act violates the Supremacy Clause because the Federal Food, Drug, and Cosmetic Act*fn2 preempts the regulation of drug products. It is also claimed that the Generic Drug Act impermissibly infringes on the right of privacy of the patient-consumer. Finally, appellants assert that the Act violates the Equal Protection Clause because it discriminates between pharmacists and other professionals.
Judge Broderick denied appellants' application for a preliminary injunction against enforcement of the Act by the defendants. He rejected the federal preemption claim, finding no direct conflict between federal regulation, which deals with the safety and efficacy of prescription drugs, and state regulation, which is aimed at the sale of such drugs. He also noted that New York's labeling requirement, while varying from federal guidelines, did not address the same problems for which the federal requirements were designed. He abstained under the Pullman doctrine from deciding the Commerce Clause issue, concluding that a New York court should interpret the words "substitution permissible" in the first instance since in his view a ruling that the Act permitted but did not require substitution would moot the constitutional issues. He also abstained from deciding the equal protection and right of privacy claims, reasoning that there would be no irreparable injury if the state courts interpreted the Act to mean that substitution was permissible but not mandatory.
Pullman abstention is a limited judge-made doctrine created by the Supreme Court in Railroad Commission v. Pullman Co., 312 U.S. 496, 61 S. Ct. 643, 85 L. Ed. 971 (1941). That case established that "in special circumstances, where resolution of a federal constitutional issue is controlled by the interpretation of an unclear or complex state statute that is susceptible to a construction which would avoid or modify the necessity of a constitutional adjudication, the federal court should defer to the state court's interpretation of its own statute." McRedmond v. Wilson, 533 F.2d 757, 760 (2d Cir. 1976). The policy behind Pullman was to avoid friction between federal and state authorities in those cases where the federal court judgment could only be an advisory "forecast" of how the state's highest court would finally interpret state law. Railroad Commission v. Pullman Co., supra, 312 U.S. at 499-501, 61 S. Ct. 643.
Three conditions must be met before Pullman abstention is appropriate: (1) the state statute must be unclear, (2) the resolution of the federal constitutional issue must depend on the state law interpretation, and (3) it must be possible to interpret the state law so as to modify or avoid the federal issue. See McRedmond v. Wilson, supra, 533 F.2d at 761. See also Shelton v. Smith, 547 F.2d 768, 770 (2d Cir. 1976); Connecticut State Federation of Teachers v. Board of Education Members, 538 F.2d 471, 483-84 (2d Cir. 1976); cf. Naprstek v. City of Norwich, 545 F.2d 815, 817-18 (2d Cir. 1976) (abstention improper when state court construction of statute cannot avoid adjudication of the constitutional issue).
These necessary conditions do not appear to have been met in this case. The state statute is not unclear. Although § 6810(6) of the N.Y. Education Law provides that a prescription form shall bear a line entitled "substitution Permissible " (emphasis supplied), which the doctor may sign instead of the line "dispense as written," § 6816-a of the Education Law, which is entitled "When substitution is Required " (emphasis supplied), specifically directs that the pharmacist "Shall substitute a less expensive drug product" if the doctor signs the "substitution permissible" line, N.Y. Education Law (McKinney) § 6816-a (emphasis supplied), and § 6810(6)(b) requires the doctor signing the latter line to advise his patient that "the pharmacist Will substitute" a generic equivalent found on the list approved under § 206(1)(O ) of the Public Health Law (emphasis supplied). Moreover, both sides here agree that under the Act, "If substitution is permitted by the doctor, the druggist then Must substitute the generic drug product (presumably less expensive) provided such product is on the Health Commissioner's list." Appellees' Brief, p. 3 (emphasis supplied); Appellant's brief, p. 22 ("there is no question that the law mandates substitution of a cheaper generic drug when it is available").
In the face of the statute's mandatory language and its interpretation as such by the parties, it is unlikely that it would be construed as authorizing a druggist to furnish a prescribed trade name drug in lieu of a lower priced FDA-approved generic substitute on the ground that the mandatory language was modified by the word "permissible." While there may be some ambiguity about the proper application of the new law when the pharmacist has no less expensive generic substitute in stock and the physician indicates "substitution permissible,"*fn3 a state court resolution of that ambiguity cannot avoid or materially modify the constitutional issues, which are raised in the context of both brand name and generic drugs being available at the drug store. Only a state court ruling that the Act makes substitution unqualifiedly permissive, never mandatory, could avoid or modify all of the constitutional issues. However, such a ruling would require the state court to ignore the plain language of the Act. Abstention could hardly be justified on the theory that the state court might invent an interpretation at odds with the statute's clear language.
In Naprstek v. City of Norwich, supra, this court reversed a district court's decision to abstain in a case challenging a city curfew ordinance on grounds of unconstitutional vagueness due to the lack of a cut-off time. The court reasoned that a state court could not supply the missing term, which would require legislative enactment, and therefore there was nothing for the state court to construe. 545 F.2d at 818. So too in this case the state court would have to act as a legislature, rewriting the Act, to avoid the constitutional issues. The possible benefit from abstention would be extremely speculative. See Ohio Bureau of Employment Services v. Hodory, 431 U.S. 471, 481, 97 S. Ct. 1898, 52 L. Ed. 2d 513 (1977). When a state statute appears clear on its face, Pullman abstention is not favored, McRedmond v. Wilson, supra, 533 F.2d at 761-62; Image Carrier Corp. v. Beame, 567 F.2d 1197, 1201 (2d Cir. 1977).
Whether or not it was proper to deny injunctive relief on grounds of abstention, appellants have failed to make out a case for such relief on the merits. A preliminary injunction will issue only upon proof that it is needed to forestall a threat of irreparable harm. The party seeking relief must make a clear showing of probable success on the merits and possible irreparable injury, or sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly in favor of the party seeking relief. Kampmeier v. Nyquist, 553 F.2d 296, 299 (2d Cir. 1977); New York v. Nuclear Regulatory Commission, 550 F.2d 745, 750 (2d Cir. 1977); Sonesta ...