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Stormans, Inc. v. Selecky

October 28, 2009

STORMANS, INC., DOING BUSINESS AS RALPH'S THRIFTWAY; RHONDA MESLER; MARGO THELEN, PLAINTIFFS-APPELLEES,
v.
MARY SELECKY, SECRETARY OF THE WASHINGTON STATE DEPARTMENT OF HEALTH; LAURIE JINKINS, ASSISTANT SECRETARY OF WASHINGTON HEALTH SYSTEMS QUALITY ASSURANCE; GEORGE ROE; SUSAN THIEL BOYER; DAN CONNOLLY; GARY HARRIS; VANDANA SLATTER; REBECCA HILLE; ROSEMARIE DUFFY, MEMBERS OF THE WASHINGTON BOARD OF PHARMACY; ELLIS CASSON; DEBORAH SIOUS CANO-LEE; JERRY HEBERT; SHAWN MURINKO, COMMISSIONERS FOR THE WASHINGTON HUMAN RIGHTS COMMISSION; MARK BRENMAN, EXECUTIVE DIRECTOR OF THE WASHINGTON HUMAN RIGHTS COMMISSION; YVONNE LOPEZ MORTON ACTING COMMISSIONER OF THE HUMAN RIGHTS COMMISSION OF THE STATE OF WASHINGTON, DEFENDANTS-APPELLANTS, AND JUDITH BILLINGS; RHIANNON ANDREINI; JEFFREY SCHOUTEN; MOLLY HARMON; CATHERINE ROSMAN; EMILY SCHMIDT; TAMI GARRARD, DEFENDANT-INTERVENORS.
STORMANS, INC., DOING BUSINESS AS RALPH'S THRIFTWAY; RHONDA MESLER; MARGO THELEN, PLAINTIFFS-APPELLEES,
v.
MARY SELECKY, SECRETARY OF THE WASHINGTON STATE DEPARTMENT OF HEALTH; LAURIE JINKINS, ASSISTANT SECRETARY OF WASHINGTON HEALTH SYSTEMS QUALITY ASSURANCE; GEORGE ROE; SUSAN THIEL BOYER; DAN CONNOLLY; GARY HARRIS; VANDANA SLATTER; REBECCA HILLE; ROSEMARIE DUFFY, MEMBERS OF THE WASHINGTON BOARD OF PHARMACY; ELLIS CASSON; DEBORAH SIOUS CANO-LEE; JERRY HEBERT; SHAWN MURINKO, COMMISSIONERS FOR THE WASHINGTON HUMAN RIGHTS COMMISSION; MARK BRENMAN, EXECUTIVE DIRECTOR OF THE WASHINGTON HUMAN RIGHTS COMMISSION, DEFENDANTS, AND YVONNE LOPEZ MORTON, ACTING COMMISSIONER OF THE HUMAN RIGHTS COMMISSION OF THE STATE OF WASHINGTON, DEFENDANT-APPELLANT,
JUDITH BILLINGS; RHIANNON ANDREINI; JEFFREY SCHOUTEN; MOLLY HARMON; CATHERINE ROSMAN; EMILY SCHMIDT; TAMI GARRARD, DEFENDANT-INTERVENORS-APPELLANTS.



Appeal from the United States District Court for the Western District of Washington Ronald B. Leighton, District Judge, Presiding. D.C. No. CV-07-05374-RBL.

The opinion of the court was delivered by: Wardlaw, Circuit Judge

FOR PUBLICATION

ORDER AND OPINION

Argued and Submitted July 8, 2008-Seattle, Washington

Before: Kim McLane Wardlaw, Richard R. Clifton, and N. Randy Smith, Circuit Judges.

ORDER

Appellees' petition for panel rehearing is GRANTED. The prior opinion filed on July 8, 2009, and reported at 571 F.3d 960 is vacated concurrent with the filing of a New Opinion today.

The full court has been advised of the petition for rehearing en banc and no active judge has requested a vote on whether to rehear the matter en banc. Fed. R. App. P. 35.

The petition for rehearing en banc is DENIED. Subsequent petitions for panel rehearing and for rehearing en banc may be filed with respect to the New Opinion.

IT IS SO ORDERED.

OPINION

We must decide whether the district court abused its discretion by preliminarily enjoining the enforcement of new rules promulgated by the Washington State Board of Pharmacy ("Board") that require pharmacies to deliver lawfully prescribed Federal Drug Administration ("FDA")--approved medications and prohibit discrimination against patients, on the ground that the rules violate pharmacies' or their licensed pharmacists' free exercise rights under the First Amendment to the U.S. Constitution. We have jurisdiction pursuant to 28 U.S.C. § 1292. Because we conclude that the district court incorrectly applied a heightened level of scrutiny to a neutral law of general applicability, and because the injunction is overbroad, we vacate, reverse, and remand.

I. FACTUAL AND PROCEDURAL BACKGROUND

The practice of pharmacy in the state of Washington is regulated by the Washington State Board of Pharmacy pursuant to a comprehensive regulatory scheme which directs the Board to "[r]egulate the practice of pharmacy and enforce all laws placed under its jurisdiction," "[e]stablish the qualifications for licensure," conduct disciplinary proceedings, and "[p]romulgate rules for the dispensing, distribution, wholesaling, and manufacturing of drugs and devices and the practice of pharmacy for the protection and promotion of the public health, safety, and welfare." Wash. Rev. Code Ann. § 18.64.005. Under the Code, a license is required for "any person to practice pharmacy or to institute or operate any pharmacy." Id. at § 18.64.020. A "pharmacist" is defined as "a person duly licensed by the Washington state board of pharmacy to engage in the practice of pharmacy," id. at § 18.64.011(10), and a "pharmacy" is defined as "every place properly licensed by the board of pharmacy where the practice of pharmacy is conducted," id. at § 18.64.011(12). The "practice of pharmacy" "includes the practice of and responsibility for: [i]nterpreting prescription orders [and] the compounding, dispensing, labeling, administering, and distributing of drugs and devices," in addition to information-sharing and monitoring responsibilities. Id. at § 18.64.011(11).

In January 2006, the Board became concerned with the lack of clear authority regarding destruction or confiscation of lawful prescriptions and refusals by pharmacists to dispense lawfully prescribed medications. Recognizing the importance of providing Washington patients timely access to all medications, the Board initiated a rulemaking process to address these issues. For sixteen months, the Board considered its various rulemaking options, receiving 21,000 written comments and testimony from the public and various interest groups. Pursuant to the Washington Administrative Procedure Act, Wash. Rev. Code Ann. § 34.05.325, the Board conducted well-attended hearings on the proposed rules.

Some public comments addressed the availability of a variety of prescription medicines and devices, such as syringes, prenatal vitamins, oral contraceptives, and AIDS medications. Most of the comments, however, focused on whether pharmacists should be allowed to refuse to dispense a lawful prescription for Plan B based on their personal, moral, or religious beliefs.

Approved by the FDA on July 28, 1999, Plan B is a post-coital hormonal emergency contraceptive which contains the same hormones as ordinary birth control pills, estrogen and progestin, in much stronger dosages. It is used to prevent pregnancy after the intended method of birth control fails or after unprotected sexual activity. Plan B is most effective within the first 12 to 24 hours after sexual intercourse and becomes less effective with each passing hour. It should be taken within 72 hours of sexual intercourse. After 120 hours, it has no effect. Plan B is approved for over-the-counter dispensation nationwide to adults eighteen and over. The drug must be held behind the pharmacist's counter and can be sold to any adult, male or female, upon age verification. At the time of the district court's decision, females younger than eighteen were required to present a medical prescription to obtain the drug.*fn1

The drug is generally available to Washington residents through pharmacies, physicians' offices, government health centers, hospital emergency rooms, Planned Parenthood, the Internet, and a toll-free hotline. Seventy-seven percent of Washington pharmacies, responding to a sample survey of 121 pharmacies conducted before the adoption of the challenged new rules,*fn2 typically stock Plan B. Those who did not cited low demand (15 percent)*fn3 or an easy alternative source (2 percent). Only two pharmacies (2 percent) surveyed did not stock the drug because of personal, religious, or moral objections. If the survey is accurate and representative, that translates into approximately 27 of the 1,370 licensed pharmacies in Washington. The survey does not reveal how many pharmacists in the state decline to dispense the drug.

One of the comments received by the Board during its rule-making process was set forth in an April 17, 2006, letter from the Washington State Human Rights Commission's ("HRC") Executive Director, Marc Brenman. HRC was created by the legislature and is authorized to act to prevent discrimination in violation of the Washington Law Against Discrimination ("WLAD"). Wash. Rev. Code Ann. § 49.60.010. It may issue and investigate complaints, attempt conciliation, or refer matters to the Attorney General's Office for a hearing before an administrative law judge. Id. §§ 49.60.230, .250; Wash. Admin. Code §§ 162-08-071 to -190. HRC is not authorized to make a final determination that discrimination occurred or to issue penalties. See Wash. Rev. Code Ann. § 49.60.240. HRC is authorized to comment on rules being considered by other agencies or state officials. See id. § 49.60.110 ("[HRC] shall formulate policies to effectuate the purposes of this chapter and may make recommendations to agencies and officers of the state or local subdivisions of government in aid of such policies and purposes."). It was under this authority that the Executive Director submitted a letter to the Board, which concluded:

It is illegal and bad policy to permit pharmacists to deny services to women based on the individual pharmacists' religious or moral beliefs. We have examined the issue from federal and state law perspectives, from the public interest, and from possible defenses and compromises that could be raised and made. On no ground would refusal to fill a lawful prescription for emergency contraception be appropriate.

The letter also posited that any pharmacy or pharmacist who declined to dispense Plan B for any reason engaged in sex discrimination in violation of federal and state law, even if another on-site pharmacist filled the prescription. It concluded that the Board itself risked liability under WLAD if it were to permit such refusals.

After considering a number of draft rules,*fn4 the Board adopted two rules by unanimous vote on April 12, 2007. The first rule, an amendment to Washington Administrative Code section 246-863-095, governs pharmacists. Under this rule, a pharmacist may be subject to professional discipline for destroying or refusing to return an unfilled lawful prescription, violating a patient's privacy, or unlawfully discriminating against, or intimidating or harassing a patient. The rule, however, does not require an individual pharmacist to dispense medication in the face of a personal objection.

The second rule, Washington Administrative Code section 246-869-010, governs pharmacies. It requires pharmacies "to deliver lawfully prescribed drugs or devices to patients and to distribute drugs and devices approved by the U.S. Food and Drug Administration for restricted distribution by pharmacies . . . in a timely manner consistent with reasonable expectations for filling the prescription." A pharmacy may substitute a "therapeutically equivalent drug" or provide a "timely alternative for appropriate therapy," but apart from certain necessary exceptions,*fn5 a pharmacy is prohibited from refusing to deliver a lawfully prescribed or approved medicine. A pharmacy is also prohibited from destroying or refusing to return an unfilled lawful prescription, violating a patient's privacy, or unlawfully discriminating against, or intimidating or harassing a patient.

In the Concise Explanatory Statement accompanying the regulations, the Board noted that it created a right of refusal for individual pharmacists by allowing a pharmacy to "accommodate" a pharmacist who has a religious or moral objection. A pharmacy may not refer a patient to another pharmacy to avoid filling a prescription because the pharmacy has a duty to deliver lawfully prescribed medications in a timely manner. A pharmacy may accommodate a pharmacist's personal objections in any way the pharmacy deems suitable, including having another pharmacist available in person or by telephone.

The regulations took effect on July 26, 2007.

Stormans, Inc., doing business as Ralph's Thriftway, a grocery store in Olympia, Washington, which also operates a pharmacy, and individual pharmacists Rhonda Mesler and Margo Thelen (collectively, "Appellees"), filed a lawsuit pursuant to 42 U.S.C. § 1983 on July 25, 2007, the day before the effective date of the rules, in the U.S. District Court for the Western District of Washington.*fn6 They allege as-applied violations of the Equal Protection and Due Process Clauses of the Fourteenth Amendment, the Supremacy Clause, and Title VII. They ultimately seek a permanent prohibition against enforcement of the new rules and the Washington State antidiscrimination law, WLAD, Wash. Rev. Code Ann. § 49.60, against "pharmacists and pharmacies that object to dispensing Plan B on moral or religious grounds."

Appellees assert that their personal religious views do not permit them to dispense Plan B, and, consequently, they refuse to provide Plan B to patients who request it. They claim that the Board's rules impinge on their constitutional right of free exercise of religion, arguing that the rules force them to choose between their religious beliefs as Christians and their livelihood.

The two individual pharmacists claim that by compelling their employers to hire another pharmacist to work with them during their shift-an accommodation about which their employers have expressed varying degrees of concern-the regulations will cause them to voluntarily leave their jobs or be terminated. Mesler has so far remained with her employer, who accommodated her during the five months between the effective date of the new rules and the issuance of the preliminary injunction. Mesler alleges, however, that without the court's injunction, she expects to be fired, because her employer has told her that it would not be able to accommodate her. Thelen voluntarily resigned from her former employment to work at a pharmacy that accommodates her religious belief by ensuring there is always another pharmacist on duty.

Stormans, which is owned by Ken Stormans and his three children, claims that it has been under investigation since May 2006, and that the Board is investigating complaints that its pharmacy has refused to stock or sell Plan B. In his declaration, Vice President Kevin Stormans states that he received a phone call in May 2006 asking whether Ralph's Thriftway carried Plan B. He did not know the answer and did not know much about the drug. After a pharmacy employee told him that Ralph's did not carry Plan B because customers had not requested it, he told the caller that the store did not carry the product. Soon afterwards, Stormans received a few other inquiries as to why Ralph's did not stock Plan B. These inquiries prompted Kevin Stormans to research Plan B. After he learned that Plan B can prevent a fertilized egg from implanting in the uterus, and because Stormans's owners believe life begins with fertilization, Stormans decided that it would not sell the drug.

In the summer of 2006, the Board began investigating Ralph's Thriftway and questioned Kevin Stormans, requiring a written statement. Though the Board closed that investigation without taking any action, in January 2007, the Board initiated a new investigation against Ralph's. Kevin Stormans asserts that the matter has been referred to the Board's legal counsel for final review. After Stormans filed suit, the Board began a new investigation of Ralph's under the new rules. This investigation is pending. Stormans expects that the Board's investigation will result in disciplinary charges, including possible revocation of its pharmacy license, as well as the initiation of an enforcement action by HRC if the preliminary injunction is overturned.

The district court granted the motion of seven individuals to intervene pursuant to Federal Rule of Civil Procedure 24(a). These individuals (collectively, "Intervenors") are five women who have been refused Plan B and/or may need timely access to Plan B in the future, and two HIV-positive individuals who need timely access to prescribed medications to manage their illness.*fn7

Plaintiffs moved for a preliminary injunction, asking that the court enjoin enforcement of the new rules against them pending litigation. On November 8, 2007, the district court issued an order granting a preliminary injunction based solely on plaintiffs' free exercise claim. Stormans, Inc. v. Selecky, 524 F. Supp. 2d 1245, 1266 (W.D. Wash. 2007). The court enjoined the State Defendants "from enforcing [Washington Administrative Code] §§ 246-863-095(4)(d) and 246-869-010(4)(d) (the anti-discrimination provisions) against any pharmacy which, or pharmacist who, refuses to dispense Plan B but instead immediately refers the patient either to the nearest source of Plan B or to a nearby source for Plan B." Id.*fn8

The State Defendants and the Intervenors timely appealed and asked the district court to stay the preliminary injunction pending appeal. Plaintiffs opposed the stay, but apparently recognizing that the injunction was overbroad, moved to modify the preliminary injunction, seeking to narrow its scope only to the named plaintiffs and their employees. The district court denied the motions.

On May 1, 2008, another panel of our court denied Intervenors' motion to stay the district court's injunction pending appeal. Stormans Inc. v. Selecky, 526 F.3d 406, 408 (9th Cir. 2008). Judge Tashima dissented from the denial of the stay. Id. at 409-18 (Tashima, J., dissenting in part).

II. JURISDICTION AND STANDARD OF REVIEW

The district court's jurisdiction is based on 28 U.S.C. §§ 1331 and 1343. We have jurisdiction under 28 U.S.C. § 1292(a)(1).

The district court's grant of a preliminary injunction is reviewed for "abuse of discretion" and should be reversed if the district court based "its decision on an erroneous legal standard or on clearly erroneous findings of fact." FTC v. Enforma Natural Prods., Inc., 362 F.3d 1204, 1211-12 (9th Cir. 2004). "[W]e consider a finding of fact to be clearly erroneous if it is implausible in light of the record, viewed in its entirety, or if the record contains no evidence to support it." Nat'l Wildlife Fed'n v. Nat'l Marine Fisheries Serv., 422 F.3d 782, 794 (9th Cir. 2005) (citations omitted). The district court's interpretation of the underlying legal principles, however, is subject to de novo review. See Cal. Pharmacists Ass'n v. Maxwell-Jolly, 563 F.3d 847, 849 (9th Cir. 2009); Brown v. Cal. Dep't of Transp., 321 F.3d 1217, 1221 (9th Cir. 2003). Finally, because "[i]njunctive relief . . . must be tailored to remedy the specific harm alleged," Lamb-Weston, Inc. v. McCain Foods, Ltd., 941 F.2d 970, 974 (9th Cir. 1991), "[a]n overbroad injunction is an abuse of discretion," id.

The district court's determination whether a party has standing is reviewed de novo. See Buono v. Norton, 371 F.3d 543, 546 (9th Cir. 2004). Ripeness is also a question of law reviewed de novo. See Manufactured Home Cmtys. Inc. v. City of San Jose, 420 F.3d 1022, 1025 (9th Cir. 2005). Questions of standing and ripeness may be raised and considered for the first time on appeal, including sua sponte. See Wash. Legal Found. v. Legal Found. of Wash., 271 F.3d 835, 850 (9th Cir. 2001) (en banc), aff'd sub nom. Brown v. Legal Found. of Wash., 538 U.S. 216 (2003); Columbia Basin Apartment Ass'n v. City of Pasco, 268 F.3d 791, 796-97 (9th Cir. 2001) (reviewing standing sua sponte even though not raised by either party).

III. DISCUSSION

A. Justiciability

Federal jurisdiction is limited to "actual 'cases' and 'controversies.' " Allen v. Wright, 468 U.S. 737, 750 (1984). We conclude that Appellees have standing to assert their claims under the Free Exercise Clause. Although their claims against the State Appellants are ripe for review, the claims they assert against HRC are not ripe for consideration and should be dismissed.

1. Standing

[1] "Article III standing is a controlling element in the definition of a case or controversy." Alaska Right to Life Political Action Comm. v. Feldman, 504 F.3d 840, 848 (9th Cir. 2007) (alteration and internal quotation marks omitted). "[T]o satisfy Article III's standing requirements, a plaintiff must show (1) it has suffered an 'injury in fact' that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision." ...


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