May 23rd, 2022 by Rieders Travis in Civil Rights

Matrix Distrib. v. N.A. of Boards of Pharm., 2022 U.S. App. LEXIS 13517 (3rd Cir. May 19, 2022) (Ambro, C.J.)  Wholesale pharmaceutical distributors PriMed Pharmaceuticals, LLC and Oak Drugs, Inc. have sued two private entities, OptumRx and National Association of Boards of Pharmacy, under § 1983 for alleged violations of constitutional and federal law. Though they undoubtably have alleged real harm caused by OptumRx and NABP’s conduct, their claims are missing an essential element: a state actor. Because they have failed to allege sufficiently that NABP or OptumRx were acting for a particular state, any wrong the plaintiffs suffered does not amount to a constitutional violation, nor can they sue under § 1983. The District Court was thus correct to dismiss those claims.  Here, to state a § 1983 claim, PriMed and Oak Drugs must allege sufficient facts to show that NABP is a state actor. Because NABP (like the NCAA in Tarkanian) is a nationwide membership organization—including not only the boards of pharmacy in each of the 50 states, but also the boards from the District of Columbia, the U.S. territories, and the provinces of Canada—any plaintiff would face an uphill battle showing the NABP acted under color of any particular state or states’ laws when it adopted and administered the VAWD program. But PriMed and Oak Drugs don’t even try. Instead, their complaint focuses on the general public character of the NABP. It broadly alleges that all NABP’s active members are the state boards of pharmacy, that members of the state boards of pharmacy are part of NABP’s leadership, that the states benefit from NABP’s programming and licensing, and that NABP’s revenue mainly stems from the services it offers the states. But it contains no specific allegations connecting any particular state or states to “the challenged action”— denial of VAWD accreditation—sufficient to show NABP is operating under color of state law. See Borrell, 870 F.3d at 160 (emphasis omitted) (internal quotation marks omitted). The District Court was therefore correct to dismiss all PriMed and Oak Drugs’ § 1983 claims for failure to state a claim.  We held that although the Pennsylvania State Board of Medicine (a state entity) used ACGME’s accreditation decisions to inform its approval of medical training facilities, the Board, not the ACGME, “remain[ed] the state actor.” Id. at 524. “Merely because the state Board deems its obligation met by following the ACGME’s accreditation decisions does not imbue the ACGME with the authority of the state nor shift the responsibility from the state Board to the ACGME.” Id. So too here. The states may formally use the NABP’s VAWD program in some fashion, but this allegation alone is not enough to show the states delegated their licensing responsibilities to NABP and made it into a state actor. The District Court was therefore correct to dismiss all PriMed and Oak Drugs’ § 1983 claims for failure to state a claim.  New Jersey law might offer redress, and plaintiffs can proceed on that claim.

Attorney Cliff Rieders

Attorney Cliff RiedersCliff Rieders is a Nationally Board Certified Trial Lawyer practicing personal injury law. A large part of his practice involves multi-district litigation, including cases related to pharmaceuticals, vitamin supplements and medical devices. He is admitted in several state and federal courts, as well as the Supreme Court of the United States. Rieders is the past regional president of the Federal Bar Association and is a life member of the distinguished American Law Institute, which promulgates proposed rules adopted by many state courts. He is a past president of the Pennsylvania Association for Justice, formerly Pennsylvania Trial Lawyers Association. As a founder of the Pennsylvania Patient Safety Authority, he served on the Board for 15 years.

Not only has Rieders held many highly esteemed, leadership positions, he authored legislation related to the Patient Safety Authority and the Mcare Act, which governs medical and hospital liability actions in Pennsylvania. He authored texts upon which both practitioners and judges rely, including Pennsylvania Malpractice Laws and Forms, and Financial Responsibility Law Issues in Pennsylvania, the latter governing auto and truck collisions in Pennsylvania. In addition, he wrote several books on the practice of law in Pennsylvania regarding wrongful death and survivor actions, insurance bad faith, legal malpractice claims and worker rights, among others. Rieders also serves as a resource to practitioners as a regular speaker for Celesq, an arm of the world’s largest legal publisher, Thomson Reuters West Publishing.

As recognition of his wide range of contribution to his profession and of his dedication to protecting the rights of his clients, he received numerous awards, among them the George F. Douglas Amicus Curiae Award, the Milton D. Rosenberg Award, the B’nai B’rith Justice Award, and awards of recognition from the Pennsylvania Trial Lawyers. [ Attorney Bio ]



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