HUNTON & WILLIAMS LLP / ORR & RENO, P.A. 

UNITED STATES DISTRICT COURT FOR 

THE DISTRICT OF NEW HAMPSHIRE 

IMS HEALTH INCORPORATED, a Delaware ) 

corporation; VERISPAN, LLC, a Delaware ) 

limited liability company, ) 

 ) 

 Plaintiffs, ) Case No. 06-CV-280-PB 

 ) 

vs. ) 

 ) 

KELLY A. AYOTTE, as Attorney General of ) 

the State of New Hampshire, ) 

 ) 

 Defendant. ) 

 ) 

______________________________________________________ 

Plaintiffs’ Memorandum of Law 

Regarding Jurisdictional Issues 

______________________________________________________ 

Thomas R. Julin & Patricia Acosta 

Hunton & Williams LLP 

Fla. Bar Nos. 325376 & 614499 

1111 Brickell Avenue - Suite 2500 

Miami, FL 33131 

305.810.2516 Fax 2460 

tjulin or pacosta@hunton.com 

James P. Bassett & Jeffrey C. Spear 

Orr & Reno, P.A. 

N.H. Bar Nos. 358 & 14938 

One Eagle Square 

P.O. Box 3550 

Concord, NH 03302-3550 

603.223.9100 Fax 9000 

jbassett or jspear@orr-reno.com 

Attorneys for IMS Health Incorporated & Verispan, LLC 

Case 1:06-cv-00280-PB Document 14 Filed 08/22/2006 Page 1 of 12
HUNTON & WILLIAMS LLP / ORR & RENO, P.A. 

TABLE OF CONTENTS

INTRODUCTION ...........................................................................................................................3 

THE RELEVANT FACTS ..............................................................................................................3 

ARGUMENT...................................................................................................................................3 

 I. The Law Restricts Dissemination 

 of the Prescriber-Identifiable Data in Prescription Records ................................................3 

 II. There is No Basis for the Court to Abstain..........................................................................5 

 III. Plaintiffs Have Standing to Raise the 

 Speech Rights of Pharmacies & Similar Entities.................................................................6 

 IV. Plaintiffs Have Suffered an Injury in Fact ...........................................................................7 

 V. The Eleventh Amendment is No Bar to Adjudication of the Claims ................................10 

CONCLUSION..............................................................................................................................10 

CERTIFICATE OF SERVICE ......................................................................................................12 

Case 1:06-cv-00280-PB Document 14 Filed 08/22/2006 Page 2 of 12
3 

HUNTON & WILLIAMS LLP / ORR & RENO, P.A. 

INTRODUCTION

 Although the defendant has not yet raised any jurisdictional question and ultimately may 

not do so, every federal court has an obligation to examine its own jurisdiction. See Ruhrgas AG 

v. Marathon Oil Co., 526 U. S. 574, 583 (1999). Plaintiffs submit this memorandum to assist the 

Court with this task. The memorandum demonstrates that the Court has jurisdiction and that it 

should exercise that jurisdiction. 

THE RELEVANT FACTS

 In this lawsuit, three companies in the business of gathering prescription records that 

contain prescriber-identifiable data (and not patient-identifiable data), aggregating and analyzing 

the data, and selling the aggregated data to pharmaceutical companies for marketing purposes 

seek a declaratory judgment that a recently-enacted New Hampshire statute that prohibits the 

licensing, sale, use and transfer of prescription records containing prescriber-identifiable data for 

commercial purposes violates the First and Fourteenth Amendments and the Commerce Clause 

of the United States Constitution. They also seek a preliminary and permanent injunction against 

enforcement of the statute. 

 The language of the statute is set forth in the complaint and in the memorandum of law 

filed by the plaintiffs in support of their motion for a preliminary injunction. 

ARGUMENT

I. 

The Law Restricts Dissemination 

of the Prescriber-Identifiable Data in Prescription Records 

 The plaintiffs challenge to the Prescription Restraint Law, 2006 N.H. Laws 328, codified 

as N.H. Rev. Stat. Ann. §§ 318:47-f & 318:47-g & 318-B:12, IV (2006), fundamentally is based 

on their conclusion that the statute imposes restrictions on the licensing, transfer, use or sale of 

Case 1:06-cv-00280-PB Document 14 Filed 08/22/2006 Page 3 of 12
4 

HUNTON & WILLIAMS LLP / ORR & RENO, P.A. 

prescription records containing either prescriber-identifiable data or patient-identifiable data. 

The language of the statute restricts licensing, transfer, use or sale of “patient-identifiable and

prescriber-identifiable data.” (Emphasis added). The use of the conjunction “and” creates the 

possibility that the statute could be interpreted and applied so that it would have no impact on the 

plaintiffs because the plaintiffs do not license, accept, use or purchase patient-identifiable data. 

Their interest is in obtaining prescriber-identifiable data only. 

 The Court has a duty, of course, to avoid placing a construction on a statute that renders 

the statute unconstitutional if that is at all possible.1

 If plaintiffs’ construction of the statute is 

deemed by the Court to be incorrect, plaintiffs have no standing and, indeed, no need, to bring 

this action.2 In a sense then, “standing turns on an initial construction of the Act.”3 But at this 

preliminary stage, the Court should not interpret the Act as if it were deciding the case on the 

merits.4 “Construction is the pith of this case, so interpreting a statute in the guise of standing 

merely permits a court to disingenuously disguise a decision on the merits.”5

 

 Nevertheless, the Court must make at least a determination that the plaintiffs have a 

reasonable fear that the statute ultimately will be interpreted to prohibit the protected expressive 

 1

 See R.I. Ass’n of Realtors, Inc. v. Whitehouse, 199 F.3d 26, 36 (1st Cir. 1999) (“a 

federal court considering a pre-enforcement challenge sometimes will presume a narrowing 

construction to which the law is fairly susceptible”) (citing City of Lakewood v. Plain Dealer 

Pub. Co., 486 U.S. 750, 770 n. 11). 

2

 See, e.g., Rodos v. Michaelson, 527 F.2d 582, 585 (1st Cir. 1975). 

3

 R.I. Med. Soc’y v. Whitehouse, 66 F. Supp. 2d 288, 302 (D.R.I. 1999). 

4

 See N.H. Right to Life Political Action Comm. v. Gardner, 99 F.3d 8, 16 (1st Cir. 

1996) (“[I]t is risky business for a district court to enter final judgment at the preliminary 

injunction stage”); see also Warth v. Seldin, 490 U.S. 500 (1975) (standing does not turn on the 

merits, but it often turns on the nature and source of the claim); R.I. Med. Soc’y, 66 F. Supp. 2d 

at 302. 

5

 Id.

Case 1:06-cv-00280-PB Document 14 Filed 08/22/2006 Page 4 of 12
5 

HUNTON & WILLIAMS LLP / ORR & RENO, P.A. 

activity in which they plan to engage. Plaintiffs would prefer for the statute to be interpreted as 

allowing their business activities to be continued, but, candidly, they do not believe that the 

statute may be so interpreted. As a general matter, the word “and” is to be interpreted as 

conjunctive or disjunctive on the basis of the context in which it appears.6

 Statutes also should 

not be interpreted in a fashion that is contrary to legislative intent.7

 

 If “and” were interpreted as having been used conjunctively rather than disjunctively, the 

statute would not operate to impose any restrictions on the sale and use of prescription records 

that do not contain patient-identifiable data for marketing activities directed at specific 

prescribers on the basis of their prescribing practices. It appears from the history of the statute 

set forth above that the Legislature’s objective was to prohibit such sales and uses and therefore 

it seems certain that the word “and” is used disjunctively. 

II. 

There is No Basis for the Court to Abstain

 The abstention doctrine allows a federal court to stay disposition of federal constitutional 

claims when the claims are based on an unsettled question of state law and disposition of that 

unsettled question could make disposition of the federal claim unnecessary. R.R. Comm'n v. 

Pullman Co., 312 U.S. 496 (1941). However, abstention rarely should be invoked in cases 

involving facial challenges to statutes allegedly violative of the First Amendment. Dombrowski 

v. Pfister, 380 U.S. 479, 489-90 (1965) (holding abstention “inappropriate for cases [where] . . . 

statutes are justifiably attacked on their face as abridging free expression”). 

 6

 See generally OfficeMax, Inc. v. United States, 428 F.3d 583, 588 (6th Cir. 2005) 

(holding “and” must be interpreted as conjunctive in tax legislation where such interpretation 

favored taxpayer). 

7

 See, e.g., United States v. Colon-Ortiz, 866 F.2d 6, 10 (1st Cir. 1989). 

Case 1:06-cv-00280-PB Document 14 Filed 08/22/2006 Page 5 of 12
6 

HUNTON & WILLIAMS LLP / ORR & RENO, P.A. 

 Even where a state statute is challenged under the First Amendment as void for 

vagueness, abstention is not appropriate. See Baggett v. Bullitt, 377 U.S. 360 (1964) (although 

state courts had never construed or reviewed statute requiring loyalty oath, abstention deemed 

inappropriate). 

 The reluctance to abstain in First Amendment cases recognizes that the delay abstention 

imposes has a further chilling effect on speech.8 In accordance with this principle, the First 

Circuit routinely has held that courts should not abstain in First Amendment cases.9

 

III. 

Plaintiffs Have Standing to Raise the 

Speech Rights of Pharmacies & Similar Entities 

 Another potential standing issue arises because the statute is targeted at the speech of 

pharmacy benefits managers; insurance companies; electronic transmission intermediaries; retail, 

mail order, or Internet pharmacies; and “other similar entities.” In Virginia Pharmacy Board v. 

Virginia Citizens Consumer Council, Inc., 425 U.S. 748 (1976), the Supreme Court held that 

individuals seeking information from pharmacies had standing to challenge a statute that 

restricted the pharmacies dissemination of certain information. “[W]here a speaker exists, as is 

the case here, the protection afforded is to the communication, to its source and to its recipients 

 8

 Zwickler v. Koota, 389 U.S. 241, 252 (1967). 

9

 See Bonas v. Town of N. Smithfield, 265 F.3d 69, 76 n.5 (1st Cir. 2001) (“the 

consequences of abstention here would be too grave to accept, because the plaintiffs now do not 

have time, as a practical matter, to obtain the requested relief from a state court”); Mangual v. 

Rotger-Sabat, 317 F.3d 45 (1st Cir. 2003) (abstention not warranted in challenge to criminal libel 

statute); Cuesnongle, O.P. v. Ramos, 835 F.2d 1486 (1st Cir. 1987) “we heed the Supreme 

Court’s warning that ‘because of the delays inherent in the abstention process and the danger that 

valuable federal rights might be lost in the absence of expeditious adjudication in the federal 

court, abstention must be invoked only in “special circumstances”’” (quoting Harris County 

Comm'rs Court v. Moore, 420 U.S. 77, 83, (1975) (quoting Zwickler, 389 U.S. at 248 (1967))). 

Case 1:06-cv-00280-PB Document 14 Filed 08/22/2006 Page 6 of 12
7 

HUNTON & WILLIAMS LLP / ORR & RENO, P.A. 

both. This is clear from the decided cases.” Virginia Pharmacy Board, 425 U.S. at 757.10 The 

plaintiffs here therefore have standing to challenge the restrictions placed on the entities that 

have been selling information to them and that wish to continue to do so. 

IV. 

Plaintiffs Have Suffered an Injury in Fact

 Of course, a plaintiff “must have suffered an injury in fact -- an invasion of a legally 

protected interest that is (a) concrete and particularized, and (b) actual or imminent, not 

conjectural or hypothetical[.]” Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992) 

(footnote, citations, and internal quotation marks omitted) (quoting Whitmore v. Arkansas, 495 

U.S. 149, 155 (1990)). “[T]here must be a causal connection between the injury and the conduct 

complained of” so that the injury is fairly traceable to the defendant’s challenged action rather 

than to some third party’s independent action, and it must be likely that a favorable decision will 

redress the injury. Lujan, 504 U.S. at 560. The plaintiff health information companies are 

themselves directly injured by the operation of the statute because it precludes pharmacies and 

similar entities from continuing to provide them with the basic resource that is needed for their 

business -- information concerning the prescribing practices of physicians. 

 There also must be a credible threat that the statute will be enforced. The conflict that 

now exists “between state officials empowered to enforce a law and private parties subject to 

 10 See also Lamont v. Postmaster General, 381 U.S. 301 (1965) (First Amendment 

protects right of citizens to receive publications sent from abroad); Kleindienst v. Mandel, 408 

U.S. 753, 762-63 (1972) (First Amendment protects the right to “receive information and ideas” 

and freedom of speech “necessarily protects the right to receive”); Procunier v. Martinez, 416 

U.S. 396, 408-09 (1974) (censorship of prison inmates’ mail abridges rights of non-inmates to 

whom correspondence was addressed). 

Case 1:06-cv-00280-PB Document 14 Filed 08/22/2006 Page 7 of 12
8 

HUNTON & WILLIAMS LLP / ORR & RENO, P.A. 

prosecution under that law is a classic ‘case’ or ‘controversy’ within the meaning of Art. III.”11

The plaintiffs need not “first expose [themselves] to actual arrest or prosecution to be entitled to 

challenge a statute that [they claim] deters the exercise of [their] constitutional rights.”12 

“Because it ordinarily will be too late to obtain a federal forum once the state has initiated 

criminal proceedings, see Younger v. Harris, 401 U.S. 37, 41 (1971), persons who are confronted 

by criminal laws of questionable constitutionality should be afforded recourse to the federal 

courts as soon as state sanctions have been threatened.”13 

 “In a pre-enforcement challenge to a statute carrying criminal penalties, standing exists 

when ‘the plaintiff has alleged an intention to engage in a course of conduct arguably affected 

with a constitutional interest, but proscribed by [the] statute, and there exists a credible threat of 

prosecution.’”14 The First Circuit has held that “in these purlieus, standing requires an 

‘objectively reasonable’ fear of prosecution.”15 Objective reasonableness is determined from “a 

frank consideration of the totality of the circumstances, including the nature of the conduct that a 

particular statute proscribes.”16 

 In Rhode Island Association of Realtors, Inc. v. Whitehouse, 199 F.3d 26 (1st Cir. 1999), 

 11 Diamond v. Charles, 476 U.S. 54, 64 (1986); see also R.I. Ass’n of Realtors, 199 F.3d 

at 30 (1st Cir. 1999) (citing Diamond and affirming grant of summary judgment for plaintiff). 

12 Steffel v. Thompson, 415 U.S. 452, 459 (1974); see also R.I. Med. Soc’y, 66 F. Supp. 

2d at 301 (“Plaintiffs in these cases need not violate the law and volunteer their heads on the 

chopping block”). 

13 R.I. Ass’n of Realtors, 199 F.3d at 30 (citing ACLU v. Fla. Bar, 999 F.2d 1486, 1493 

(11th Cir. 1993)). 

14 Gardner, 99 F.3d at 14 (1st Cir. 1996) (quoting Babbitt v. United Farm Workers Nat’l 

Union, 442 U.S. 289, 298, (1979)). 

15 R.I. Ass’n of Realtors, 199 F.3d at 31 (citing Gardner, 99 F.3d at 14). 

16 Id.

Case 1:06-cv-00280-PB Document 14 Filed 08/22/2006 Page 8 of 12
9 

HUNTON & WILLIAMS LLP / ORR & RENO, P.A. 

the First Circuit held that the controversy was ripe even though the statute at issue had been on 

the books for two decades without enforcement because the plaintiff association alleged that it 

“intended to engage” in expressive activity prohibited by the statute at issue. The Court noted 

that “when First Amendment values are at risk, courts must be especially sensitive to the danger 

of self-censorship.”17 The Court reiterated that “when dealing with pre-enforcement challenges 

to recently enacted (or, at least, non-moribund) statutes that facially restrict expressive activity 

by the class to which the plaintiff belongs, courts will assume a credible threat of prosecution in 

the absence of compelling contrary evidence.”18 

 The First Circuit noted that the statute set severe sanctions for noncompliance, that “the 

Attorney General had issued no statement interpreting the statute to mean anything other than 

what its plain language portends,” that “the Supreme Court repeatedly has found standing to 

mount pre-enforcement challenges to laws that had never been enforced” and announced it 

would “emulate these examples” because “[i]t would be little short of perverse to deny a party 

standing because the statute she challenges is so potent that no one dares violate it, especially 

when the result is widespread self-censorship.”19 

 In the instant case, the plaintiffs are not faced with a mature, unenforced statute, but 

rather one that is freshly minted and expressly targeted at the expressive activities in which the 

plaintiffs and their business associates engage. The plaintiffs have consulted with the assistant 

Attorney General present during the legislative birth process and who will be principally 

 17 Id. at 31 (citing Va. v. Am. Booksellers Ass’n, 484 U.S. 383, 393 (1988), and Meese v. 

Keene, 481 U.S. 465, 473 (1987)). 

18 R.I. Ass’n of Realtors, 99 F.3d at 31 (quoting Gardner, 99 F.3d at 15). 

19 Id. 32-33 (citing Am. Booksellers Ass'n, 484 U.S. at 393; United Farm Workers, 442 

U.S. at 302; and Doe v. Bolton, 410 U.S. 179, 188 (1973)). 

Case 1:06-cv-00280-PB Document 14 Filed 08/22/2006 Page 9 of 12
10 

HUNTON & WILLIAMS LLP / ORR & RENO, P.A. 

responsible for enforcement of the law. He has been unable to provide any assurance that the 

plaintiffs would not be criminally prosecuted if they continued to engage in the purchase of 

prescription records reflecting prescriber-identifiable data for marketing purposes -- a practice 

that has been central to their business activities for many years. Like the Rhode Island 

Association of Realtors case, the controversy here is no hypothetical case. 

V. 

The Eleventh Amendment is No Bar to Adjudication of the Claims

 The Eleventh Amendment immunizes states from damage actions in federal court, but 

does not create any impediment to this lawsuit. Here, the plaintiffs have sued a state official, the 

Attorney General, in her official capacity and they have sought solely declaratory and injunctive 

relief to prevent violations by her of federal law. Such suits have been expressly permitted in 

federal court since the early days of the Republic.20 Plaintiffs also seek to recover under 42 

U.S.C. § 1988, the costs and attorneys’ fees that they have and will incur. The Supreme Court 

has held that claims for such ancillary relief also are not barred by the Eleventh Amendment.21 

CONCLUSION

 The Court has jurisdiction over this case and it should exercise that jurisdiction. The 

Prescription Restraint Law plainly prohibits the continued licensing, sale, use and transfer of 

prescriber-identifiable data in prescription records, it would not be appropriate to abstain from 

 20 See Edelman v. Jordan, 415 U.S. 651 (1971); Ex Parte Young, 209 U.S. 123 (1908); 

Tindal v. Wesley, 167 U.S. 204 (1897); Osborn v. Bank of the United States, 22 U.S. (Wheat.) 

738 (1824); Neo Gen Screening, Inc. v. New England Newborn Screening Program, 187 F.3d 24, 

27 (1st Cir. 1999) (“the [Ex Parte Young] doctrine removes the Eleventh Amendment bar where 

the private suit is directed not against the state or a state agency eo nomine but instead against 

state officials acting in violation of federal law and where (in addition) retrospective damages or 

property transfers are not sought for official acts”). 

21 See Hutto v. Finney, 437 U.S. 678 (1978). 

Case 1:06-cv-00280-PB Document 14 Filed 08/22/2006 Page 10 of 12
11 

HUNTON & WILLIAMS LLP / ORR & RENO, P.A. 

determining the constitutionality of this restraint, the plaintiffs have standing to raise the rights of 

the entities directly restrained by the law, the plaintiffs are themselves injured by enforcement of 

the law, and the Eleventh Amendment is no bar to the adjudication of this case. 

 Respectfully submitted, 

Hunton & Williams LLP 

Thomas R. Julin22 & Patricia Acosta23

Fla. Bar Nos. 325376 & 614599 

1111 Brickell Avenue - Suite 2500 

Miami, FL 33131 

305.810.2516 Fax 2460 

tjulin or pacosta@hunton.com 

Orr & Reno, P.A. 

By /s/ Jeffrey C. Spear 

James P. Bassett & Jeffrey C. Spear 

New Hampshire Bar Nos. 358 & 14938 

One Eagle Square - P.O. Box 3550 

Concord, NH 03302-3550 

603.223.9100 Fax 9000 

jbassett or jspear@orr-reno.com 

 Attorneys for IMS Health Incorporated and Verispan LLC 

 

 22 Assented to Motion for Pro Hac Vice Admission pending. 

23 Assented to Motion for Pro Hac Vice Admission pending. 

Case 1:06-cv-00280-PB Document 14 Filed 08/22/2006 Page 11 of 12
12 

HUNTON & WILLIAMS LLP / ORR & RENO, P.A. 

CERTIFICATE OF SERVICE

 I hereby certify that a true and correct copy of the foregoing was hand-delivered July 28, 

2006, to: 

 The Hon. Kelly Ayotte 

 Attorney General of the State of New Hampshire 

 33 Capitol Street 

 Concord, NH 03301 

 603.271.3658 Fax 2110 

 /s/Jeffrey C. Spear 

 Jeffrey C. Spear 

Case 1:06-cv-00280-PB Document 14 Filed 08/22/2006 Page 12 of 12