Full Opinion

25-3216-cv Healthcare Distribution Alliance v. Boughton, et al. UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT SUMMARY ORDER RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING TO A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL. At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 20th day of October, two thousand twenty-six. PRESENT: SARAH A. L. MERRIAM, MARIA ARAÚJO KAHN, Circuit Judges, ARUN SUBRAMANIAN, ∗ District Judge. __________________________________________ HEALTHCARE DISTRIBUTION ALLIANCE, Plaintiff-Appellant, v. 25-3216-cv MARK D. BOUGHTON, in his official capacity as Commissioner of the Connecticut Department of Revenue Services; WILLIAM TONG, Attorney General, in his official capacity as Attorney General for the State of Connecticut, ∗ Judge Arun Subramanian of the United States District Court for the Southern District of New York, sitting by designation. Defendants-Appellees. __________________________________________ FOR PLAINTIFF-APPELLANT: JONATHAN S. MASSEY (Austin S. Martin, on the brief), Massey & Gail LLP, Washington, D.C.; Thomas J. Finn and Snigdha Mamillapalli, McCarter & English LLP, Hartford, CT, on the brief. FOR DEFENDANTS-APPELLEES: JOSHUA BRITT, Assistant Attorney General (Patrick T. Ring, on the brief), for William Tong, Attorney General for the State of Connecticut, Hartford, CT. Appeal from an order of the United States District Court for the District of Connecticut (Williams, J.). UPON DUE CONSIDERATION, the December 24, 2025, order of the District Court is AFFIRMED. Plaintiff-appellant Healthcare Distribution Alliance (“HDA”) appeals from the District Court’s order denying HDA’s motion for a preliminary injunction against defendants-appellees Mark D. Boughton, in his official capacity as Commissioner of the Connecticut Department of Revenue Services, and William Tong, in his official capacity as Attorney General for the State of Connecticut (collectively, the “State”). HDA, “a national trade association representing pharmaceutical wholesale distributors,” App’x at 26, sought to enjoin enforcement of the Connecticut Drug Price Cap (the “DPC”). See Conn. Pub. Act No. 25-168 §§345-47 (codified at Conn. Gen. Stat. §12-34f - §12-34h). On appeal, HDA contends that the District Court abused its discretion by determining that 2 HDA had not demonstrated a likelihood of success on the merits of its dormant Commerce Clause claims. 1 We assume the parties’ familiarity with the underlying facts, procedural history, and issues on appeal, to which we refer only as necessary to explain our decision. BACKGROUND HDA alleges that the DPC “seeks to cap the prices charged by manufacturers and wholesale distributors for off-patent branded drugs, generic drugs, and interchangeable biologic products . . . .” App’x at 22. The statute applies to any wholesale distributor – whether located in Connecticut or elsewhere – that sells covered drugs in Connecticut, and imposes civil penalties for noncompliance. See Conn. Gen. Stat. §12-34g(b). HDA alleges that the DPC violates the dormant Commerce Clause in two ways: (1) it discriminates against out-of-state entities, and (2) it is an impermissible extraterritorial regulation. 2 1 HDA’s opening brief to this Court includes passing arguments addressing other constitutional claims. See HDA Br. at 35-37. We decline to address these cursory arguments, finding them forfeited. “Issues not sufficiently argued in the briefs are considered [forfeited] and normally will not be addressed on appeal.” Norton v. Sam’s Club, 145 F.3d 114, 117 (2d Cir. 1998); see also United States v. Botti, 711 F.3d 299, 313 (2d Cir. 2013) (“It is a settled appellate rule that issues adverted to in a perfunctory manner, unaccompanied by some effort at developed argumentation, are deemed [forfeited].” (citation modified)). 2 In the District Court, HDA also contended that the DPC imposed an undue burden on interstate commerce; the District Court concluded that HDA had not shown a likelihood of success on the merits of that claim. See Healthcare Distrib. All. v. Boughton, No. 3:25CV01724(OAW), 2025 WL 3725031 at *5-6 (D. Conn. Dec. 24, 2025). Because HDA does not challenge this holding on appeal, we do not consider it. See Margolin v. Nat’l Ass’n of Immigr. Judges, 608 U.S. 339, 342 (2026) (per curiam). 3 On January 1, 2026, HDA moved for a preliminary injunction barring the State from implementing or enforcing the DPC against its members. See Pl.’s Mot. for Prelim. Inj., Healthcare Distrib. All. v. Boughton, No. 3:25CV01724(OAW), 2025 WL 4954569 (D. Conn. Oct. 23, 2025). The District Court denied the motion, see Healthcare Distrib. All. v. Boughton, No. 3:25CV01724(OAW), 2025 WL 3725031 (D. Conn. Dec. 24, 2025), and HDA appealed. STANDARD OF REVIEW This Court “review[s] a district court’s grant or denial of a preliminary injunction for abuse of discretion.” Upsolve, Inc. v. James, 155 F.4th 133, 139 (2d Cir. 2025), cert. denied, 146 S.Ct 1854 (2026). “A district court has exceeded the permissible bounds of its discretion when its decision rests on an error of law (such as application of the wrong legal principle) or a clearly erroneous factual finding or cannot be located within the range of permissible decisions.” We The Patriots USA, Inc. v. Hochul, 17 F.4th 266, 280 (2d Cir.) (per curiam) (citation modified), opinion clarified, 17 F.4th 368 (2d Cir. 2021). “When, as here, the moving party seeks a preliminary injunction that will affect government action taken in the public interest pursuant to a statutory or regulatory scheme,” the movant must meet a “more rigorous likelihood-of-success standard.” Sussman v. Crawford, 488 F.3d 136, 140 (2d Cir. 2007) (per curiam) (citation modified). “That is, plaintiffs must establish a clear or substantial likelihood of success on the merits.” Id. (citation modified). 4 DISCUSSION As noted, HDA argues that the DPC violates the dormant Commerce Clause by being both protectionist and extraterritorial. See HDA Br. at 2-3. We address each theory in turn. I. Protectionism The District Court did not abuse its discretion by denying a preliminary injunction based on HDA’s claim that the DPC discriminates against out-of-state entities. 3 “A state statute violates the dormant Commerce Clause if it clearly discriminates against interstate commerce in favor of intrastate commerce.” Nat’l Shooting Sports Found., Inc. v. James, 144 F.4th 98, 113 (2d Cir. 2025) (citation modified). HDA argues that the DPC advantages in-state retailers versus out-of-state distributors, but “any notion of [economic] discrimination assumes a comparison of substantially similar entities.” Gen. Motors Corp. v. Tracy, 519 U.S. 278, 298 (1997) (citation modified). The District Court concluded HDA had not shown a likelihood of success on the merits “[b]ecause the [Drug Price Cap] treats all covered distributors the same.” Healthcare Distrib. All., 2025 WL 3 We construe HDA’s protectionism claim as alleging discrimination against interstate commerce. See Nat’l Pork Producers Council v. Ross, 598 U.S. 356, 369 (2023) (The “antidiscrimination principle lies at the very core of our dormant Commerce Clause jurisprudence” and “prohibits the enforcement of state laws driven by economic protectionism – that is, regulatory measures designed to benefit in-state economic interests by burdening out-of-state competitors.” (citation modified)); Town of Southold v. Town of E. Hampton, 477 F.3d 38, 47 (2d Cir. 2007) (“A law that clearly discriminates against interstate commerce in favor of intrastate commerce is virtually invalid per se and will survive only if it is demonstrably justified by a valid factor unrelated to economic protectionism.” (citation modified)). 5 3725031, at *5; see also Pharm. Rsch. and Mfrs. of Am. v. Walsh, 538 U.S. 644, 670 (2003) (rejecting Commerce Clause challenge where challenged fund “would be created entirely from rebates paid by out-of-state manufacturers and would be used to subsidize sales by local pharmacists,” concluding program would not “impose a disparate burden on any competitors” because “[a] manufacturer could not avoid its rebate obligation by opening production facilities in Maine”). We find no abuse of discretion in this determination. II. Extraterritoriality The District Court also did not abuse its discretion by denying a preliminary injunction based on HDA’s extraterritoriality theory. HDA argues the DPC “takes aim at pricing decisions that occur entirely outside Connecticut . . . .” HDA Br. at 16. “A state statute violates the dormant Commerce Clause if it . . . has the practical effect of extraterritorial control of commerce occurring entirely outside the boundaries of the state in question.” Nat’l Shooting Sports Found., 144 F.4th at 113 (citation modified). As the District Court observed, “a challenged law must have the specific impermissible extraterritorial effect of discriminating against interstate commerce, or directly regulating commerce occurring wholly out-of-state, to run afoul of the dormant Commerce Clause.” Healthcare Distrib. All., 2025 WL 3725031, at *4 (citation modified); see also Nat’l Pork Producers Council v. Ross, 598 U.S. 356, 373-74, 376 n.1 (2023). The District Court concluded that HDA had not pointed to any such specific impermissible effect. We concur that HDA did not show that the DPC has a “practical effect” that “requir[es] wholly out-of-state commerce to be conducted at [Connecticut’s] direction.” Nat’l 6 Shooting Sports Found., 144 F.4th at 116 (citation modified). On appeal, HDA points to Association for Accessible Medicines v. Frosh, 887 F.3d 664 (4th Cir. 2018), and Association for Accessible Medicines v. Ellison, 140 F.4th 957 (8th Cir. 2025), as reaching contrary holdings. But the Maryland and Minnesota laws challenged in those cases were materially different from the DPC. The laws at issue in Frosh and Ellison applied to sales and transactions occurring out of state, precisely what the dormant Commerce Clause prohibits. See Frosh, 887 F.3d at 670-72 (noting that Maryland law applied to “transaction[s] that did not result in a single pill being shipped to Maryland” and “control[led] the price of transactions that occur[red] wholly outside the state”); Ellison, 140 F.4th at 960-61 (noting that Minnesota law “regulate[d] the price of out-of-state transactions”). The DPC, on the other hand, applies solely to in-state drug sales. See Healthcare Distrib. All., 2025 WL 3725031, at *3, *7 (noting that defendants “only intend to enforce [the DPC] against covered manufacturers and distributors selling identified drugs where title is taken in Connecticut” and “HDA’s members are free to sell identified drugs in other states at prices lower or higher than the Reference Price”). To the extent that HDA focuses on the fact that the DPC ties in-state prices to the nationally-set “wholesale acquisition cost,” id. at *2, and might incidentally impact pricing decisions in other states, these circumstances do not create an impermissible extraterritorial effect. See VIZIO, Inc. v. Klee, 886 F.3d 249, 255 (2d Cir. 2018) (state fee structure tied to national market share “merely influences national pricing decisions, rather than directly controls out-of-state commerce,” and so plaintiff’s “extraterritorial theory was properly dismissed”). 7 HDA raises a new argument for the first time on appeal, asserting that Section 347, which penalizes distributors for withdrawing certain drugs from the Connecticut market, “is another extraterritorial feature of the” DPC. HDA Br. at 17 (citing Conn. Pub. Act No. 25-168 §347). But in the District Court, HDA did not argue that Section 347 violated the dormant Commerce Clause. Rather, HDA cited that provision solely to show that it had standing to file suit, that the dispute was ripe for resolution, and that it would suffer irreparable harm. See Pl.’s Mot. for Prelim. Inj., Healthcare Distrib. All., 2025 WL 4954569. The District Court did not abuse its discretion by not considering an argument HDA failed to make. Cf. Horoshko v. Citibank, N.A., 373 F.3d 248, 249-50 (2d Cir. 2004) (per curiam) (“The Horoshkos’ contention that the District Court abused its discretion in not permitting an amendment that was never requested is frivolous.”); Tharpe v. Sellers, 583 U.S. 33, 45 (2018) (Thomas, J., dissenting) (observing that a court “did not err in failing to accept” an argument that was “never raised” before it). And of course, we are not in the business of “granting relief on a claim that” HDA never asserted below. Clark v. Sweeney, 607 U.S. 7, 9 (2025). Accordingly, we find no abuse of discretion in the District Court’s denial of a preliminary injunction based on HDA’s theory that the DPC is extraterritorial. * * * We have considered HDA’s remaining arguments and find them unpersuasive. For the foregoing reasons, the judgment of the District Court is AFFIRMED. FOR THE COURT: Catherine O’Hagan Wolfe, Clerk of Court 8