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ADIBI v. CALIFORNIA STATE BOARD OF PHARMACY

October 7, 2005.

AFSHIN ADIBI, et al., Plaintiffs,
v.
CALIFORNIA STATE BOARD OF PHARMACY, et al., Defendants.



The opinion of the court was delivered by: EDWARD CHEN, Magistrate Judge

ORDER DENYING DEFENDANTS' MOTION TO DISMISS (Docket No. 8)

Plaintiffs Afshin Adibi and International Pharmaceutical Services ("IPS") have filed suit pursuant to 42 U.S.C. § 1983 against Defendants the California State Board of Pharmacy ("Board") and its executive director Patricia Harris in her official capacity. Plaintiffs seek (1) a declaration that Defendants have violated the Dormant Commerce Clause by trying to revoke or suspend Plaintiffs' pharmaceutical license and permit and (2) an injunction barring Defendants from revoking or suspending the same. Currently pending before the Court is Defendants' motion to dismiss for failure to state a claim upon which relief can be granted and for lack of subject matter jurisdiction. Having considered the parties' briefs and accompanying submissions, the Court hereby DENIES Defendants' motion to dismiss.

I. FACTUAL & PROCEDURAL BACKGROUND

  In their complaint, Plaintiffs allege the following facts.

  The Board is the official body of the state that regulates licensed pharmacists and licensed wholesalers of pharmaceuticals in the State of California. See Compl. ¶ 4. Ms. Harris is the executive director of the Board. See id. Mr. Adibi has been licensed by the Board as a pharmacist since 1991. See id. ¶ 5. Since 1995, IPS has held a wholesaler permit issued by the Board. See id. Mr. Adibi is the sole owner, president, and operator of IPS. See id.

  Beginning in 1995, Plaintiffs began to export pharmaceuticals to foreign countries. See id. ¶ 6. All of the shipments were made by IPS at the instance and direction of Mr. Adibi. See id. Subsequently, Defendants brought an administrative proceeding against Plaintiffs, seeking to revoke or suspend both Mr. Adibi's license and IPS's wholesaler permit based on Plaintiffs' exportation of pharmaceuticals. See id. ¶ 7. After Defendants initiated the administrative proceeding against Plaintiffs, Plaintiffs filed the instant suit, claiming that Defendants' attempt to revoke or suspend the license and permit was a violation of the Commerce Clause of the Constitution. See id. ¶ 9 ("Defendants' assertion of disciplinary authority over [P]laintiffs' license and permit, respectively, on the basis of [P]laintiffs' conduct which took place entirely in foreign commerce violates that Constitution of the United States in that it constitutes an extraterritorial application of the laws of California and an attempt by [D]efendants as agents of the State of California to regulate the conduct of foreign commerce."); see also Opp'n at 1 ("Does the Commerce Clause, or perhaps what is called the Silent Commerce Clause, of the federal Constitution override the disciplinary authority of the State of California with respect to conduct which has occurred solely in the foreign commerce of the United States and which has no separate effects within that State?").

  Based on papers filed by Defendants,*fn1 it appears that Defendants sought to revoke or suspend Plaintiffs' license and permit for various reasons, including but not limited to the following:

  (1) Dispensing dangerous drugs at retail without being licensed as a pharmacy (as opposed to a wholesaler), a violation of California Business & Professions Code § 4110. See Cal. Bus. & Prof. Code § 4110(a) ("No person shall conduct a pharmacy in the State of California unless he or she has obtained a license from the board."). (2) Failing to obtain a DEA registration to dispense and export dangerous drugs, a violation of 21 C.F.R. § 1301.11(a), thereby violating California Business & Professions Code § 4059.5(e). See 21 C.F.R. § 1301.11(a) ("Every person who manufactures, distributes, dispenses, imports, or exports any controlled substance or who proposes to engage in the manufacture, distribution, dispensing, importation or exportation of any controlled substance shall obtain a registration unless exempted by law or pursuant to §§ 1301.22-1301.26."); Cal. Bus. & Prof. Code § 4059.5(e) ("A dangerous drug or dangerous device shall not be transferred, sold, or delivered to a person outside this state, whether foreign or domestic, unless the transferor, seller, or deliverer does so in compliance with the laws of this state and of the United States and of the state or country to which the dangerous drugs or dangerous devices are to be transferred, sold, or delivered.").

  (3) Transferring, selling, or delivering dangerous drugs outside of the United States to persons unauthorized by local and international law to receive the drugs, a violation of California Business & Professions Code § 4059.5(e). For example, Plaintiffs allegedly exported dangerous drugs to a foreign country subject to a trade embargo by the United States without prior government approval.

  II. DISCUSSION

  A. Legal Standard

  Pursuant to Federal Rule of Civil Procedure 12(b)(6), a defendant may move to dismiss for "failure to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). In deciding whether to dismiss, a court may consider only the facts alleged in the complaint, documents attached as exhibits or incorporated by reference in the complaint, and matters of which the court may take judicial notice. See United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003) ("A court may . . . consider certain materials — documents attached to the complaint, documents incorporated by reference in the complaint, or matters of judicial notice — without converting the motion to dismiss into a motion for summary judgment."). The court must accept the plaintiff's allegations in the complaint as true and construe them in the light most favorable to the plaintiff. See Janas v. McCracken (In re Silicon Graphics Sec. Litig.), 183 F.3d 970, 983 (9th Cir. 1999). Dismissal is improper "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957).

  Pursuant to Federal Rule of Civil Procedure 12(b)(1), a defendant may also move to dismiss for "lack of jurisdiction over the subject matter." Fed.R.Civ.P. 12(b)(1). "A Rule 12(b)(1) jurisdictional attack may be facial or factual. In a facial attack, the challenger asserts that the allegations contained in a complaint are insufficient on their face to invoke federal jurisdiction. By contrast, in a factual attack, the challenger disputes the truth of the allegations that, by themselves, would otherwise invoke federal jurisdiction." Safe Air v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). "In resolving a factual attack on jurisdiction, the district court may review evidence beyond the complaint without converting the motion to dismiss into a motion for summary judgment." Id.

  In their motion, Defendants ask the Court to dismiss Plaintiff's case pursuant to both Rule 12(b)(6) and 12(b)(1). More specifically, Defendants argue that Plaintiffs' case should be dismissed (1) because the State has sovereign immunity under the Eleventh Amendment; (2) because the State is not a "person" who may be sued for a § 1983 violation; (3) because the Board and its officers have absolute immunity from suit; (4) because Burford abstention is applicable; and (5) because Younger abstention is applicable. To the extent that Defendants seek dismissal of the case based on abstention doctrines, Defendants are not so much challenging subject matter jurisdiction (Plaintiffs' § 1983 claim undoubtedly falls under federal question jurisdiction) as arguing that the Court should decline from asserting jurisdiction as a matter of equity and comity. See Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 727-28 (1996) ("[T]he power to dismiss under the Burford doctrine, as with other abstention doctrines, derives from the discretion historically enjoyed by courts of equity. . . . [The] exercise of this discretion must reflect `principles of federalism and comity.'"); Attorney General of Guam v. Torres, 419 F.3d 1017, — (9th Cir. 2005) (stating that "evolution of the Younger abstention doctrine has confirmed that it is based on considerations of equity and comity").

  B. Sovereign Immunity Under the Eleventh Amendment

  Defendants argue first that the case should be dismissed — both against the Board and its executive director Ms. Harris, sued in her official capacity — because they are protected by sovereign immunity pursuant to the Eleventh Amendment. "Eleventh Amendment immunity extends to state agencies and other governmental entities that can be viewed as `arms of the State.'" Maryland Stadium Auth. v. Ellerbe Becket, Inc., 407 F.3d 255, 261 n. 8 (4th Cir. 2005) (citing P.R. Aqueduct & Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 144 (1993) ("[A] State and its `arms' are, in effect, immune from suit in federal court."). As noted by Plaintiffs, however, Defendants have not provided any evidence nor even made any argument as to why the Board is a State agency or arm of the State. See Fresenius Med. Care Cardiovascular Res. Inc. v. Puerto Rico, 322 F.3d 56, 61 (1st Cir. 2003) (stating that the entity asserting Eleventh Amendment immunity "bears the burden of showing it is an arm of the state"); Gragg v. Ky. Cabinet for Workforce Dev., 289 F.3d 958, 963 (6th Cir. 2002) ("[T]he entity asserting Eleventh Amendment immunity has the burden to show that it is entitled to immunity, i.e., that it is an arm of the state."); ITSI TV Prods. v. Agricultural Ass'ns, 3 F.3d 1289, 1292 (9th Cir. 1993) ("[T]he public entity ought to bear the burden of proving the facts that establish its immunity under the Eleventh Amendment."). Accordingly, the Court denies without prejudice the Board's claim of immunity under the Eleventh Amendment.

  While sovereign immunity might protect the Board from suit, see Cozzo v. Tangipahoa Parish Council-President Gov't, 279 F.3d 273, 280-81 (5th Cir. 2002) ("When a state agency is the named defendant, the Eleventh Amendment bars suits for both money damages and injunctive relief unless the state has waived its immunity."), it does not protect Ms. Harris, even in her official capacity, because Plaintiffs do not ...


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