Court Opinion

ID: 6342248
Source: CourtListenerOpinion
Date Created: 2022-05-19 17:00:20.251917+00
Date Added: 2024-06-11T09:15:17.355656
License: Public Domain

PRECEDENTIAL

    UNITED STATES COURT OF APPEALS
         FOR THE THIRD CIRCUIT

                   No. 20-3638

        MATRIX DISTRIBUTORS, INC.;
            OAK DRUGS, INC.;
      PRIMED PHARMACEUTICALS, LLC

                         v.

  NATIONAL ASSOCIATION OF BOARDS OF
       PHARMACY; OPTUMRX, INC.

         Oak Drugs, Inc.; PriMed Pharmaceuticals, LLC,

                                             Appellants

    Appeal from the United States District Court
            for the District of New Jersey
      (D.C. Civil Action No. 2-18-cv-17462)
     District Judge: Honorable Kevin McNulty

            Argued on January 10, 2022

Before: AMBRO, BIBAS, and ROTH, Circuit Judges

          (Opinion Filed: May 19, 2022)
Brian M. Culnan [Argued]
Linda J. Clark
Brad M. Gallagher
Barclay Damon LLP
80 State Street
Albany, New York 12207
              Counsel for Appellants Oak Drugs, Inc.;
              PriMed Pharmaceuticals, LLC

Brian E. Casey [Argued]
Barnes & Thornburg LLP
201 S. Main Street, Suite 400
South Bend, IN 46601

Regina S.E. Murphy
1000 N. West Street, Suite 1500
Wilmington, DE 19801
             Counsel for Appellee National Association of
             Boards of Pharmacy

Jason R. Asmus [Argued]
Taft Stettinius & Hollister LLP
2200 IDS Center
80 South 8th Street
Minneapolis, MN 55402

Francis X. Manning
Stradley Ronon Stevens & Young, LLP
LibertyView
457 Haddonfield Road, Suite 100
Cherry Hill, NJ 08002
              Counsel for Appellee OptumRx, Inc.

                                2
                          OPINION

AMBRO, Circuit Judge

        Not all wrongs amount to constitutional violations.
Indeed, most constitutional amendments protect only against
wrongs caused by the states or the federal government. And
the main cause of action for seeking damages for constitutional
violations, 42 U.S.C. § 1983, contains a “state actor”
requirement, allowing suit only against those who can be fairly
said to be acting for the state itself.

        The plaintiffs fail to meet this requirement here.
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.

       The plaintiffs’ remaining claims also largely lack merit.
But because we believe that PriMed and Oak Drugs plausibly
allege NABP violated their due process right under New Jersey

                               3
common law, we will affirm the District Court’s judgment in
part and reverse in part.

                       I. Background

       The    pharmaceutical      market    involves      many
interconnected players. In the production and distribution field
are the manufacturers, wholesale distributors, and the
pharmacies. Among distributors, there are three large
“primary” entities who supply drugs to the nationwide
pharmaceutical chains like CVS and Walgreens. Smaller
secondary suppliers distribute drugs to independent
pharmacies that don’t meet the minimum purchasing
requirements of primary distributors.

       On the insurance side, there are insurers and pharmacy
benefit managers. The lesser-known pharmacy benefit
managers are the entities that administer the prescription
benefits of the insurance plans. These entities are middle-men
between pharmacies and insurers, contracting with various
pharmacies to serve patients covered by the benefit managers’
insurance plans.

       Finally, in the regulatory and licensing realm, there is a
mix of public and private entities. Congress, of course, has a
hand in regulating the drug market through various statutes,
including the Drug Supply Chain Security Act, 21 U.S.C.
§ 360eee et seq. States handle pharmaceutical licensing,
including licensing wholesale pharmaceutical suppliers. And
private entities help set uniform professional standards for
pharmacies and pharmaceutical distributors.

                               4
       This case involves players from each of these sectors.
The plaintiffs, PriMed Pharmaceuticals and Oak Drugs, are
small secondary wholesale distributors. PriMed is licensed in
39 states and provides pharmaceutical products to about 2,000
independent pharmacies, while Oak Drugs serves 145
independent pharmacies in the 20 states in which it is licensed.
Nearly 90% of the independent pharmacies they serve have
contracts with United Healthcare’s pharmacy benefit manager,
OptumRx (a defendant here).

        OptumRx requires its network pharmacies to purchase
drugs only from wholesale distributors accredited by the other
defendant, National Association of Boards of Pharmacy.
NABP is a nonprofit membership association committed to
“provid[ing] for interstate transfer in pharmacist licensure” and
“improv[ing] the standards of pharmacist education, licensure,
and practice.” Doc. 158 (Am. Compl.) ¶¶ 14–15. Its
membership consists of the 50 state boards of pharmacy and
the boards of pharmacy of the District of Columbia, the U.S.
territories, and the provinces of Canada. And it offers a range
of services to its members, including educational resources,
licensing exams, a database of information on pharmacists,
and—particularly relevant here—the “Verified Accredited
Wholesale Distributor” program.

        The VAWD accreditation program is at the core of this
case. When OptumRx announced its network pharmacies
could only purchase from VAWD-accredited distributors,
PriMed and Oak Drugs applied for accreditation. But
PriMed’s first two applications came back “canceled” because
it did not satisfy NABP’s accreditation criteria. Oak Drugs’
initial application was also canceled with little explanation.
Each distributor eventually received accreditation on its next

                               5
attempt. But according to PriMed and Oak Drugs, it was
already too late. They had lost dozens of customers because of
their struggles to obtain VAWD accreditation.

        PriMed and Oak Drugs believe NABP violated their
rights to due process by canceling their applications with little
explanation and with no opportunity to challenge the result.
And, because NABP’s criteria for accreditation were more
stringent than the federal Drug Supply Chain Security Act’s
requirements for wholesale drug distributors, they contend
NABP (by implementing the criteria) and OptumRx (by
requiring compliance with the criteria) violated both the Act
and the Supremacy Clause of the Constitution. They thus sued
NABP and OptumRx in New Jersey state court, and the
defendants removed the case to federal court soon after. The
distributors’ amended complaint lodged a litany of claims
against the defendants, including several § 1983 claims, a
claim against NABP for violating the common law right to due
process, and various tortious interference claims against
OptumRx.

       NABP and OptumRx moved to dismiss under Federal
Rule of Civil Procedure 12(b)(6), and the District Court
granted the motion.

                     II. Standard of Review

       We exercise plenary review over the District Court’s
grant of a Rule 12(b)(6) motion to dismiss. Newman v. Beard,
617 F.3d 775, 779 (3d Cir. 2010). We accept the complaint’s
factual allegations as true and construe these allegations in the
light most favorable to the plaintiffs. Id.

                               6
                       III. Discussion1

    A. The § 1983 Claims

        The main theme of PriMed and Oak Drugs’ complaint
is that NABP and OptumRx violated federal law, whether that
be the Due Process Clause, the Supremacy Clause, or the Drug
Supply Chain Security Act. But their cause of action, 42
U.S.C. § 1983, is not a catch-all provision offering remedies
for every violation of federal law. Instead, its narrow scope
offers relief only against a person who violates federal law
while acting “under color of any statute, ordinance, regulation,
custom, or usage, of any State or Territory or the District of
Columbia.” 42 U.S.C. § 1983. This requirement, known in
shorthand as the “state-actor doctrine,” thus allows suit only
against those who act on behalf of a state. Borrell v.
Bloomsburg Univ., 870 F.3d 154, 160 (3d Cir. 2017).

      Usually that’s not a difficult obstacle to surmount. A
government employee (like a police officer) and a public entity

1
  The District Court had jurisdiction under 28 U.S.C. § 1331
and we have jurisdiction under 28 U.S.C. § 1291. Though
PriMed and Oak Drugs at first appealed an order dismissing
the complaint without prejudice and with leave to amend
(which is not usually a final order), they subsequently filed a
notice asking the Court to issue a “final, reviewable order of
dismissal in this action.” Appx. at 169. Their notice expressed
a “clear and unequivocal intent to decline amendment and
immediately appeal that leaves no doubt or ambiguity.” Weber
v. McGrogan, 939 F.3d 232, 240 (3d Cir. 2019). Now that the
Court has entered a final dismissal, we may exercise
jurisdiction over this appeal. Id.

                               7
(like a state university) are classic defendants in § 1983 cases.
But the analysis becomes trickier when the defendant is a
private entity, as both NABP and OptumRx are. While private
parties still may be “state actors,” the plaintiff must show “such
a close nexus between the State and the challenged action that
seemingly private behavior may be fairly treated as that of the
State itself.” Id. (emphasis omitted) (internal quotation marks
omitted). In other words, a plaintiff must show such a tight
connection between a state and the challenged action that the
state could be held responsible for that action.

        Such connection between a state and a private entity is
difficult to show, particularly when it hinges on the state’s
membership in a larger nationwide organization. Take NCAA
v. Tarkanian, 488 U.S. 179 (1988). There, the University of
Nevada, Las Vegas’s former basketball coach, Jerry
Tarkanian, tried to sue the NCAA under § 1983 after he was
suspended by the University for violating NCAA rules. Id. at
185–88. To determine if he could bring a § 1983 suit, the
Supreme Court considered whether the University’s
membership in the NCAA and its adoption of its rules turned
the latter, a private organization, into a state actor. Id. at 193–
95. It held not. To be sure, the University was an NCAA
member and thus the State of Nevada “had some impact on the
NCAA’s policy determinations.” Id. at 193. But it was just
one of “several hundred other public and private member
institutions” that “similarly affected those policies.” Id. Could
the NCAA truly be said to be acting “under color of Nevada
law” when it adopted those standards? No—the “source of the
legislation adopted by the NCAA [was] not Nevada but the
collective membership, speaking through an organization that
is independent of any particular state.” Id.

                                8
       This is not to say it is impossible to show a collective
membership organization is operating under color of a
particular state’s laws. In Brentwood Academy v. Tennessee
Secondary School Athletic Association, for example, the
Supreme Court decided a private collective membership
organization composed of public and private high schools in
Tennessee was a state actor. 531 U.S. 288, 290–91 (2001).
Unlike in Tarkanian, the plaintiff there managed to show a
tight connection between the TSSAA and the State of
Tennessee. Id. at 291. This task was simpler than in Tarkanian
because, although the TSSAA was made up of public and
private school members, the organization’s “member public
schools [were] all within a single State.” Id. at 298. So, with
only one jurisdiction involved, the plaintiffs could trace a
direct connection between Tennessee and the athletic
association’s policies.

       Here, to state a § 1983 claim, PriMed and Oak Drugs
must allege sufficient facts to show that NABP is a state actor.2
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

2
  The plaintiffs conceded at oral argument that if NABP is not
a state actor, neither is OptumRx. We therefore focus our state-
actor analysis only on NABP.

                               9
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.3 See Borrell, 870 F.3d at 160 (emphasis
omitted) (internal quotation marks omitted). The District

3
  We also note that NABP is not a state actor just because the
plaintiffs allege states used VAWD accreditation in various
ways to inform their licensing decisions. We confronted a
similar argument in McKeesport Hospital v. Accreditation
Council for Graduate Medical Education (ACGME), where the
plaintiff hospital tried to argue that a private accrediting body’s
decision to withdraw accreditation of the hospital’s residency
program was “state action.” 24 F.3d 519, 523 (3d Cir. 1994).
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.

                                10
Court was therefore correct to dismiss all PriMed and Oak
Drugs’ § 1983 claims for failure to state a claim.4

    B. Common Law Due Process Claims

      Pivoting from their constitutional arguments, PriMed
and Oak Drugs next contend NABP must comply with due
process requirements because, under federal and New Jersey
common law, “quasi-public” entities must provide fair
procedures when making accrediting decisions. Their due
process arguments fare slightly better here.

        We begin with the federal common law. It is well
established that there is “no federal general common law.”
Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938). But
“limited areas exist in which federal judges may appropriately
craft the rule of decision.” Rodriguez v. Fed. Deposit Ins.
Corp., 140 S. Ct. 713, 717 (2020). PriMed and Oak Drugs
insist federal courts have crafted a federal common law right
to due process “as a check on organizations that exercise
significant authority in areas of public concern such as
accreditation and professional licensing.” Appellant Br. at 35
(quoting Thomas M. Cooley L. Sch. v. ABA, 459 F.3d 705, 712
(6th Cir. 2006)).

       To be sure, some of our sister circuits have recognized
a federal common law due process right. But the cases PriMed
and Oak Drugs cite have a specific context: challenges to a
higher education accreditation decision by an accrediting

4
 Because the plaintiffs cannot meet the threshold showing that
NABP and OptumRx are state actors, we do not reach the
merits of their constitutional and federal law claims.

                             11
agency.5 This makes sense. When deciding whether to craft
federal common law, “one of the most basic” conditions is that
the rule is “necessary to protect uniquely federal interests.”
Rodriguez, 140 S. Ct. at 717 (quoting Tex. Indus., Inc. v.
Radcliff Materials, Inc., 451 U.S. 630, 640 (1981)). And those
interests are present in the college accreditation agency cases.
Courts have mentioned several federal hooks—the Department
of Education’s involvement in approving accrediting agencies
and Title IV funding depending on accreditation, to name a
few—to justify creating federal common law. See, e.g., Pro.
Massage Training Ctr. (PMTC) v. Accreditation All. of Career
Sch. & Colls., 781 F.3d 161, 170–71 (4th Cir. 2015). Congress
has also given federal courts exclusive jurisdiction over any
action brought by a school challenging an accreditation
decision made by a Department of Education-approved
accrediting agency. See id.; 20 U.S.C. § 1099b(f). So, the
courts have reasoned, it would “make little sense” to apply
state common law to claims that could not be heard in state
court. Cooley, 459 F.3d at 712; see also PMTC, 781 F.3d at
170.

        Unlike the school accreditation cases, here PriMed and
Oak Drugs identify no “uniquely federal interest[]” that would
justify expanding federal common law to govern accreditation
of pharmaceutical distributors. Rodriguez, 140 S. Ct. at 717
(internal quotation marks omitted). There is no allegation, for

5
  PriMed and Oak Drugs cite one case that does not deal with
college accreditation, Hospital v. Accreditation Council for
Graduate Medical Education, 24 F.3d 519 (3d Cir. 1994). But
they fail to mention the only discussion of the federal common
law due process right in that case was in the concurrence. See
id. at 534–35 (Becker, J., concurring).

                              12
example, that the federal Government participates in approving
accrediting agencies like NABP, or that VAWD accreditation
is required for PriMed and Oak Drugs to receive federal
funding. There may, of course, be other ways for them to show
a uniquely federal interest, but they do not try to do so here. So
we will not consider whether NABP violated federal common
law due process standards.

       Next, New Jersey common law. In a handful of cases,
the New Jersey Supreme Court has recognized a right to
judicial review when quasi-public associations have
improperly excluded or expelled members. For instance, in
Falcone v. Middlesex County Medical Society, the Court
determined a medical society improperly excluded a doctor
from membership for reasons that were “patently arbitrary and
unreasonable and beyond the pale of the law.” 170 A.2d 791,
800 (N.J. 1961). Although the plaintiff “received a full
medical course” at an accredited school of osteopathy and had
“an unrestricted license to practice medicine and surgery” in
New Jersey, he was barred from membership because he didn’t
meet the society’s unwritten requirement that applicants attend
four years at a medical college approved by the American
Medical Association. Id. at 793–94, 800.

        The Court was reluctant to interfere with the “internal
affairs of membership associations,” id. at 796, but it did so for
a few reasons. For one, the medical society’s “declaration of
[the doctor’s] ineligibility and its refusal to admit him to
membership . . . had seriously adverse economic and
professional effects on Dr. Falcone.” Id. at 794. He was let go
from the staff of two hospitals because they, “like other
hospitals in the area,” required doctors to be members of the
society. Id. The “virtual monopoly” that the society had over

                               13
the hospitals meant that Falcone could not “successfully
continue his practice”; to earn a livelihood, he needed “to
belong to the local society.” Id. (internal quotation marks
omitted). Another factor was that the society was an
association “with which the public is highly concerned and
which engages in activities vitally affecting the health and
welfare of the people.” Id. at 799. So the Court needed to step
in to limit the society’s “unbridled” power to exclude a doctor
from a profession based on arbitrary criteria. Id.; see also
Matthews v. Bay Head Improv. Ass’n, 471 A.2d 355, 366 (N.J.
1984) (“The general rule is that courts will not compel
admission to a voluntary association,” but when “an
organization is quasi-public, its power to exclude must be
reasonably and lawfully exercised in furtherance of the public
welfare related to its public characteristics.”); Moore v. Loc.
Union No. 483, Int’l Ass’n of Bridge, Structural & Ornamental
Ironworkers, AFL-CIO, 334 A.2d 1, 5–6 (N.J. 1975)
(reviewing a union’s “arbitrary” refusal to accept transferring
members because union membership “affect[s] the economic
welfare of the individual applicant” and the union has “public
importance”).

        Here the District Court dismissed the plaintiffs’ New
Jersey common law due process claim because the state courts
had all recognized this “right in the context of associations’
exclusion or discipline of members.” Dist. Ct. Op. at 26
(emphasis in original). PriMed and Oak Drugs were “not
members of NABP and do not seek membership.” Id. The
plaintiffs pointed to “no New Jersey case . . . in which a court
recognized that common-law due process extends to
accreditation decisions like NABP’s,” so the Court refused to
expand state law beyond what was “foreshadowed by state

                              14
precedent.” Id. (quoting City of Philadelphia v. Beretta U.S.A.
Corp., 277 F.3d 415, 421 (3d Cir. 2002)).

        While the District Court was right to be cautious, we are
not convinced PriMed and Oak Drugs’ claim moves the needle
“in ways not foreshadowed” by the New Jersey Supreme
Court. Beretta, 277 F.3d at 421. Indeed, if we take the
plaintiffs’ allegations as true and “construe the amended
complaint in the light most favorable to [them],” Newman, 617
F.3d at 779, as we must, this case bears a strong resemblance
to Falcone.

       The complaint plausibly alleges NABP is a “quasi-
public” association because (1) it is “dedicated . . . to the vital
public use” of (among other things) “improv[ing] the standards
of pharmacist education, licensure, and practice,” see
Matthews, 471 A.2d at 366 (internal quotation marks omitted);
Am. Compl. ¶ 15, and (2) it has “enjoyed monopoly power
with respect to pharmaceutical wholesale distributor
accreditation” since establishing the VAWD accreditation
program, Am. Compl. ¶ 337; see Matthews, 471 A.2d at 366;
Falcone 170 A.2d at 799.

       And, as in Falcone, the plaintiffs allege NABP’s denial
of accreditation has “had seriously adverse economic and
professional effects on [them].” 170 A.2d at 794; see Am.
Compl. ¶¶ 257–70. There, Dr. Falcone could not work for any
New Jersey hospital absent membership in the County Medical
Society. And here, the plaintiffs allege they were cut off from
serving most pharmacies nationwide because OptumRx
required pharmacies to source only from VAWD-accredited
distributors. Am. Compl. ¶ 18 (“OptumRx maintains a
nationwide network of approximately 67,000 pharmacies,

                                15
which is about the same as the total number of pharmacies
located in the United States.”). In both cases, the denial of
membership or accreditation substantially limited the
plaintiffs’ ability to work in their chosen professions. That the
necessary professional qualification was, in one case,
membership in a medical society and, in the other,
accreditation by a pharmaceutical association, is a distinction
without a difference.

        The final question, then, is whether the plaintiffs
sufficiently alleged the cancelation of their applications was
arbitrary. See Falcone, 170 A.2d at 800; Matthews, 471 A.2d
at 367; Moore, 334 A.2d at 6. Though this is a close question,
we think that, when construing the allegations in the plaintiffs’
favor, they have met the low plausibility threshold. NABP sets
out criteria for applicants to comply with before receiving
accreditation. But PriMed and Oak Drugs suggest that, when
evaluating their applications, NABP ignored evidence showing
compliance with those criteria and canceled their accreditation
applications by adopting an unreasonable and overbroad
interpretation of certain criteria. If this is true, the plaintiffs
may be able to show NABP’s denial of accreditation was
“patently arbitrary and unreasonable” conduct. Falcone, 170
A.2d at 800. We thus will reverse the dismissal of the
plaintiffs’ New Jersey common law due process claim and
remand.6

6
  Judge Bibas would affirm on this issue. New Jersey has not
yet recognized a due-process right for entities to challenge
accreditation decisions made by nationwide organizations.
Thus, recognizing that right here, he thinks, “expand[s] state
law in ways not foreshadowed by state precedent.” Beretta,
277 F.3d at 421.

                                16
   C. Tortious Interference Claims

      PriMed and Oak Drugs’ final claims focus on
OptumRx. They suggest it interfered with their relationships
with current and prospective customers by mandating its
network pharmacies deal only with VAWD-accredited
wholesalers.

        A New Jersey tortious interference claim has four
elements: (1) “a protected interest,” (2) “malice,” (3) “a
reasonable likelihood that the interference caused the loss of
the prospective gain,” and (4) “resulting damages.” Vosough
v. Kierce, 97 A.3d 1150, 1159 (N.J. Super. Ct. App. Div. 2014)
(internal quotation marks omitted). Malice means that “harm
was inflicted intentionally and without justification or excuse.”
Lamorte Burns & Co. v. Walters, 770 A.2d 1158, 1170 (N.J.
2001); see also Mylan Inc. v. SmithKline Beecham Corp., 723
F.3d 413, 422 (3d Cir. 2013) (“Under New Jersey law, a
plaintiff must demonstrate interference with a contractual
relationship that is knowing, intentional, and wrongful.”).

       The plaintiffs’ complaint failed to allege malice
adequately. When determining whether a defendant acted with
malice, a court considers “whether the conduct was sanctioned
by the rules of the game, for where a plaintiff’s loss of business
is merely the incident of healthy competition, there is no
compensable tort injury.” Lamorte, 770 A.2d at 1170 (internal
quotation marks omitted). But here, as the District Court
noted, the complaint itself recognizes a “justification or
excuse” for the VAWD requirement: OptumRx was
“address[ing] concerns about its network pharmacies’ sourcing
of medications,” and it decided to address those concerns by
“‘partnering with an accreditation’ provider to have wholesale

                               17
distributors meet OptumRx guidelines and the standards of the
accrediting agency.” Am. Compl. ¶¶ 145–46; see also Dist. Ct.
Op. at 30–31. And the plaintiffs have not plausibly alleged that
OptumRx pursued this goal through means that were
“fraudulent, dishonest, or illegal.”7 Lamorte, 770 A.2d at
1171. So we affirm dismissal of the tortious interference
claims.
                       *       *      *

       Based on the allegations in the complaint, OptumRx’s
requirement that its network pharmacies contract only with
VAWD-accredited distributors has certainly led to substantial
business setbacks for PriMed and Oak Drugs. But the
allegations in the complaint are insufficient to show that

7
   The plaintiffs suggest OptumRx deceived New York
pharmacies because it didn’t tell them the VAWD requirement
was illegal under New York Public Health Law § 280-c(2)(i).
That provision states: “When conducting an audit of a
pharmacy’s records, a pharmacy benefit manager shall . . . in
the case of invoice audits, accept as validation invoices from
any wholesaler registered with the department of education
from which the pharmacy has purchased prescription drugs or,
in the case of durable medical equipment or sickroom supplies,
invoices from an authorized distributor other than a
wholesaler.” N.Y. Pub. Health L. § 280-c(2)(i). The District
Court held, and we agree, that this argument is meritless.
Because the statute just requires a pharmacy benefits manager
to “accept an invoice from a registered wholesaler as sufficient
proof that the transaction occurred[,] . . . it is hard to see how
the statute has anything to do with a [pharmacy benefits
manager’s] decision to impose sourcing requirements in its
contracts with pharmacies.” Dist. Ct. Op. at 32.

                               18
federal law or New Jersey tortious interference law offer relief
for these injuries. But because the plaintiffs have plausibly
alleged NABP violated their right to due process under New
Jersey’s common law, they may proceed on that claim. For
these reasons, we affirm in part and reverse in part.

                              19