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Argument analysis: Due process, causation and stopping points for a 1945 doctrine in a 2020 world

Argument analysis: Due process, causation and stopping points for a 1945 doctrine in a 2020 world

Attorneys and justices explored competing causation standards and competing understandings of due process on Wednesday during oral argument in Ford v. Montana Eighth Judicial District (consolidated with Ford v. Bandemer). The cases present a question of personal jurisdiction: whether individuals injured in automobile accidents involving Ford cars can sue Ford in the states in which the accidents took place (Montana and Minnesota) if Ford regularly sells, ships and markets cars in those states but manufactured and sold the specific cars involved in the accidents in other states.


Sean Marotta, for Ford, and Deepak Gupta, for plaintiffs, phone in for arguments (Art Lien)

Arguments for Ford

Sean Marotta argued for Ford. He proposed that, for a state court to exercise personal jurisdiction over Ford, the company’s contacts with the state must be the “proximate cause” of the accident and injuries sued upon. The case is controlled by the court’s 2017 decision in Bristol-Myers Squibb v. Superior Court of California, which held that selling a similar product in a state could not provide a basis for jurisdiction in that state. In BMS, the plaintiffs were Ohioans suing in California, whereas in this case, the plaintiffs are citizens of the forum states (Montana and Minnesota). But the plaintiff’s home state is irrelevant under Walden v. Fiore. Personal jurisdiction, Marotta reminded the court, protects defendants, not plaintiffs.

Chief Justice John Roberts. The chief justice proposed a hypothetical in which a car manufacturer advertised cars in all states and the ads prompted the plaintiff to purchase the car, including by highlighting the car’s safety. Marotta said advertising was in the “but-for” causal chain but was too attenuated to be the proximate cause of the accident. A plaintiff “tells the story” of an accident, and only those contacts that are part

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Argument analysis: No clear consensus on states’ authority to regulate prescription-drug middlemen

Argument analysis: No clear consensus on states’ authority to regulate prescription-drug middlemen

Nicholas J. Bronni, solicitor general of Arkansas, argues remotely for petitioner (Art Lien)

The justices heard argument on Tuesday in Rutledge v. Pharmaceutical Care Management Association, which asks them once again to consider the extent of preemption under the Employee Retirement Income Security Act of 1974, commonly called ERISA. In this case, the court considers an Arkansas law that regulates the reimbursements that pharmacies receive when they sell prescription drugs.

The problem arises from the routine use by employee health-insurance plans of pharmacy benefit managers, or “PBMs,” to administer the prescription drug benefits that the plans provide (OptumRX, for example, is one major PBM). Typically, at least with respect to generic drugs, the PBM sets the price it will pay a pharmacy for each drug by reference to a document that establishes a maximum allowable cost, or “MAC,” for each particular medication. Local pharmacies argue that the prices set in the MAC lists are so low that they cannot profitably sell many of the medications on the lists. Responding to those complaints, more than 40 states have adopted rules regulating various activities of PBMs. The statute in this case obligates PBMs to pay retail pharmacies the invoice price stated by the pharmacies’ wholesaler (even if that “invoice price” is higher than the price at which the pharmacy actually purchased the drug from the wholesaler). It also imposes numerous procedural requirements related to the timing for appeals when pharmacies challenge MAC prices, the speed with which PBMs must update their MAC lists, and the like.

The propriety of the Arkansas law – and other similar state statutes – warrants the court’s attention because ERISA preempts state laws that “relate to any employee benefit plan” covered by ERISA. The wide-ranging argument on Tuesday reflected the difficulty the court has had in

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