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Monday, July 15, 2019

 

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Ninth Circuit:

Supreme Court Response to Certified Question Won’t Be Applied

California High Court’s 2013 Declaration That State Statute Passes Muster Under State Constitution Disregarded; Panel Affirms 2007 Decision Based on Contrary Court of Appeal Opinion That Year

 

By a MetNews Staff Writer

 

An action by the Ninth U.S. Circuit Court of Appeals gives rise to a question as to whether it has breached a 2012 promise to the California Supreme Court that if it would determine whether a Civil Code section violates the state constitutional free-speech provision, the federal court would honor its  interpretation.

On Thursday, a three-judge Ninth Circuit panel affirmed a 2007 decision by then-Judge (now Chief Judge) Virginia A. Phillips of the Central District of California which found that a state Court of Appeal decision declaring the statute invalid had a preclusive effect, spurning the appellants’ insistence that the state high court’s 2013 proclamation of constitutionality should now prevail.

The litigation was initially brought in 2002 by owners of retail pharmacies against certain companies which process prescription drug benefit claims. The complaint alleged that the defendants were in violation of California Civil Code §2527, enacted in 1982 at the behest of the California Pharmacists Association, which requires such processors to conduct studies of retail pharmacy process and provide the information to their “clients.”

Question Certified

On July 10, 2012, the Ninth Circuit, noting that the California Constitution provides broader protection to speech than the First Amendment, certified to the California Supreme Court this question:

“Does California Civil Code section 2527 compel speech in violation of article I, section 2 of the California Constitution?”

It added:

“We…agree to accept and follow the Court’s decision.”

Such a pledge is required under California Rules of Court, rule 8.548, as a prerequisite to accepting a certified question to avoid rendering mere advisory opinions.

The Ninth Circuit speculated that the state Supreme Court might differ with recent Court of Appeal decisions invalidating the requirement as impermissible compelled speech.

The state high court accepted the question on July 18, 2012, and on Dec. 19, 2013, held in Beeman v. Anthem Prescription Management, LLC, that the law is valid under the state Constitution. There was a concurring opinion and a concurring and dissenting opinion.

En Banc Order

A three-judge panel of the Ninth Circuit on March 19, 2014, lifted the stay on proceedings in the District Court for the Central District of California, and remanded the case for further proceedings, noting only that one aspect of the California Supreme Court opinion. On Jan. 29, 2014, sitting en banc, the Ninth Circuit vacated the panel’s order, specifying that the “case is remanded to the three judge panel for consideration in light of the California Supreme Court’s opinion….”

Phillips last Jan. 10 signed a judgment dismissing the action as a sanction for the plaintiffs’ willful spoliation of evidence. The three plaintiffs, remaining at that point, proceeded to appeal her Aug. 27, 2007 order which granted, in part, summary judgment in favor of some of the defendants.

That judgment was based on the preclusive effect of a Feb. 28, 2007 unpublished Court of Appeal decision by then-Presiding Justice Candace Cooper (now a mediator and arbitrator) affirming a decision invalidating §2527 by then-Los Angeles Superior Court Judge Victoria Chaney (now a justice in Div. One of this district’s Court of Appeal.)

2007 Opinion Undisturbed

On Thursday, a Ninth Circuit panel—comprised of Judges Carlos T. Bea and Johnnie B. Rawlinson and Senior Judge Dorothy W. Nelson—left undisturbed the opinion from nearly 12 years ago, which appears to have been generated on a manual typewriter.

Bea wrote a concurring opinion and Rawlinson simply declared, “I concur in the result.”

The lead opinion says:

“This case returns to the Ninth Circuit for the third time in its seventeen-year course. The Plaintiffs-Appellants here litigated their claims in parallel state and federal court actions. The state court reached final judgment first, holding unconstitutional the California statute that provides Appellants a cause of action. In 2007, then, the federal district court held on a motion for summary judgment that Appellants’ claims in federal court were barred by claim and issue preclusion. Twelve years later, after a series of procedural steps and after the district court entered final judgment in 2018. Appellants timely appeal the district court’s summary judgment order.

“Appellants’ core claim is that a 2013 California Supreme Court decision (a decision rendered in this litigation holding the California statute constitutional) overrules the basis of the state court decision accorded preclusive effect by the federal district court in 2007. That intervening development. Appellants contend, implicates equitable exceptions to claim and issue preclusion.”

Rejecting that “core claim,” the opinion says:

“Here, as a direct result of Appellants’ failure to raise the contention that the California Supreme Court’s 2013 decision supplies an equitable ground not to apply the preclusion doctrines, we have no district court finding to review for abuse of discretion. Appellants could have filed to the district court a motion for reconsideration of its summary judgment order at any point between 2014 and 2018. Such a motion would have afforded the district court the opportunity to exercise its discretion first.”

The case is Beeman v. Anthem Prescription Management, 18-55196.

 

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