Association for Accessible Medicines v. Keith M. Ellison, in his official capacity as Attorney General of the State of Minnesota

United States Court of Appeals
For the Eighth Circuit
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No. 24-1019
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Association for Accessible Medicines
Plaintiff - Appellee
v.
Keith M. Ellison, in his official capacity as Attorney General of the State of
Minnesota
Defendant - Appellant
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Appeal from United States District Court
for the District of Minnesota
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Submitted: October 23, 2024
Filed: June 12, 2025
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Before COLLOTON, Chief Judge, GRUENDER and KOBES, Circuit Judges.
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KOBES, Circuit Judge.
The Association for Accessible Medicines (AAM) is a trade organization
whose members include generic prescription drug manufacturers. AAM sued
Minnesota Attorney General Keith M. Ellison, challenging the state’s law regulating

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drug prices, Minn. Stat. § 62J.842 (the Act). The district court1 granted AAM’s
motion for a preliminary injunction, finding that the Act likely violated the dormant
Commerce Clause. We affirm.
I.
Drug manufacturers sell prescription drugs to nationwide wholesale
distributors, who then resell to pharmacies, healthcare facilities, and other dispensers
of prescription drugs. Generic drug manufacturers sell drugs in bulk to wholesale
distributors under long-term, nationwide contracts. While manufacturers don’t
control the prices at which wholesalers or retailers sell their products or where they
are eventually sold, manufacturers impact prices downstream by setting the
wholesale acquisition cost. The wholesale acquisition cost is the baseline price
wholesale distributors and retailers use to set their prices.
None of the AAM manufacturers are Minnesota entities. Nor are the three
largest wholesalers. But AAM’s members are licensed in Minnesota because all
manufacturers and wholesalers in the supply chain must be licensed in the state for
a drug to be distributed or sold there. Minn. Stat. § 151.252, subd. 1(g); Minn. Stat.
§ 151.47, subd. 1a(f); Minn. R. 6800.1400, subp. 3.
The Act prohibits manufacturers from “impos[ing], or caus[ing] to be
imposed, an excessive price increase . . . on the sale of any generic or off‐patent drug
sold, dispensed, or delivered to any consumer in the state.” Minn. Stat. § 62J.842
subd. 1. An “excessive price increase” is defined as a price increase that exceeds a
certain percentage over the wholesale acquisition cost or that exceeds $30 for a 30-
day supply of the drug. Id., subd. 2. The Act regulates only manufacturers, not
wholesale distributors or pharmacies. See id., subd. 3.
1 The Honorable Judge Patrick J. Schiltz, Chief Judge, United States District
Court for the District of Minnesota.

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AAM sought injunctive relief claiming, among other things, that the Act
violates the dormant Commerce Clause’s prohibition on state laws that regulate
extraterritorially. In granting the preliminary injunction, the district court concluded
that AAM was likely to succeed on the merits of its claim, that AAM’s members
faced a threat of irreparable harm, and that it was a wash whether AAM’s harm was
greater than any injury suffered by granting the injunction or whether the injunction
would serve the public interest. Minnesota only appeals the likelihood of success
on the merits and the balance of harms/public interest.
II.
“We review a district court’s ultimate ruling on a preliminary injunction for
abuse of discretion, though we review its underlying legal conclusions de novo.”
Home Instead, Inc. v. Florance, 721 F.3d 494, 497 (8th Cir. 2013). A party seeking
to preliminarily enjoin the implementation of a state statute must show that it is likely
to succeed on the merits, that there is a threat of irreparable harm to the movant if
the injunction is not granted, that the balance of harms favors the movant, and that
the injunction is in the public interest. Dataphase Sys., Inc. v. C L Sys., Inc., 640
F.2d 109, 113 (8th Cir. 1981) (en banc); Planned Parenthood Minn., N.D., S.D. v.
Rounds, 530 F.3d 724, 731–32 (8th Cir. 2008) (en banc). “Because our decision is
predominantly one of determining whether the established facts fall within the
relevant legal definition, albeit a constitutional definition, we apply a de novo
standard of review in deciding whether there has been a violation of the commerce
clause.” R & M Oil & Supply, Inc. v. Saunders, 307 F.3d 731, 734 (8th Cir. 2002)
(cleaned up) (citation omitted).
The Commerce Clause grants Congress the power “[t]o regulate
Commerce . . . among the several States.” U.S. Const. art. I, § 8, cl. 3. “Although
the Clause is framed as a positive grant of power to Congress, we have long held
that this Clause also prohibits state laws that unduly restrict interstate commerce.”
Tenn. Wine & Spirits Retailers Ass’n v. Thomas, 588 U.S. 504, 514 (2019) (cleaned
up) (citation omitted). A state violates the so-called dormant Commerce Clause by

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“(1) clearly discriminat[ing] against interstate commerce in favor of in-state
commerce, (2) impos[ing] a burden on interstate commerce that outweighs any
benefits received, or (3) ha[ving] the practical effect of extraterritorial control on
interstate commerce.” Styczinski v. Arnold, 46 F.4th 907, 912 (8th Cir. 2022)
(cleaned up) (citation omitted). The third way of violating the dormant Commerce
Clause—the extraterritoriality doctrine—is at issue here.
In National Pork Producers Council v. Ross, the Supreme Court rejected the
argument that the extraterritoriality doctrine created an “almost per se rule
forbidding enforcement of state laws that have the practical effect of controlling
commerce outside the State.” 598 U.S. 356, 371 (2023) (Pork Producers) (cleaned
up). The Court instead upheld the challenged law, distinguishing it from laws that
“had a specific impermissible ‘extraterritorial effect.’” Id. at 374 (quoting Healy v.
Beer Inst., Inc., 491 U.S. 324, 339 (1989)). Unlike the statute in Pork Producers,
the laws the Court had previously struck down in its extraterritoriality cases like
Baldwin, Brown-Forman, and Healy had the specific impermissible extraterritorial
effect of “deliberately ‘prevent[ing] out-of-state firms from undertaking competitive
pricing’ or ‘depriv[ing] businesses and consumers in other States of “whatever
competitive advantages they may possess.”’” Id. (quoting Healy, 491 U.S. at 338–
339 (quoting Brown-Forman Distillers Corp. v. N.Y. State Liquor Auth., 476 U.S.
573, 580 (1986))) (cleaned up); see also Baldwin v. G.A.F. Seelig, Inc., 294 U.S.
511, 521 (1935). The Court did not overturn “the rule that was applied in Baldwin
and Healy,” preserving its precedent that a state violates the extraterritoriality
principle when it enacts “price control or price affirmation statutes that tie[] the price
of in-state products to out-of-state-prices.” Pork Producers, 598 U.S. at 374
(cleaned up) (citation omitted). So the “classic observation that ‘[a state] has no
power to project its legislation into [another state] by regulating the price to be paid
in that state’” for drugs sold there remains good law. See Pharm. Rsch. & Mfrs. of
Am. v. Walsh, 538 U.S. 644, 669 (2003) (quoting Baldwin, 294 U.S. at 521).
We conclude the Act has the specific impermissible extraterritorial effect of
controlling prices outside of Minnesota. Minnesota insists that the Act does not

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restrict pricing or set policy in other states. But, like our sister circuit when posed
with a challenge to a nearly identical Maryland law, we find this argument
unavailing. See Ass’n for Accessible Meds. v. Frosh, 887 F.3d 664, 672 (4th Cir.
2018). Minnesota argues that because the drugs must eventually end up in
Minnesota for a manufacturer to be subject to liability, the Act is not a price control
and does not set the price of transactions in other states. But Minnesota concedes
that a Colorado manufacturer would be penalized if it sold drugs to a New Jersey
distributor at prices above those proscribed by the Act and those drugs ended up in
Minnesota. Minnesota “cannot, even in an effort to protect its consumers from
skyrocketing prescription drug costs, impose its preferences in this manner.” Id. at
673.
The Supreme Court’s decision in Walsh confirms our conclusion that
Minnesota’s law has the specific impermissible extraterritorial effect of controlling
prices under Baldwin and Healy. There, the Court considered a Maine law
challenged under the extraterritoriality doctrine and concluded that “[t]he rule that
was applied in Baldwin and Healy” did not apply because Maine was not
“regulat[ing] the price of any out-of-state transaction,” “insist[ing] that
manufacturers sell their drugs to a wholesaler for a certain price,” or “tying the price
of its in-state products to out-of-state prices.” Walsh, 538 U.S. at 669 (citation
omitted). But under the Act, Minnesota regulates the price of out-of-state
transactions, insists that out-of-state manufacturers sell their drugs to wholesalers
for a certain price, and ties the price of in-state products—prescription drugs—to the
price that out-of-state manufacturers charge their wholesalers. See Minn. Stat.
§ 62J.842, subd. 1, 2.
Minnesota argues that Pork Producers created a “practical presumption
against dormant Commerce Clause challenges where a state law does not
discriminate.” But the Court did not overturn its cases that applied the dormant
Commerce Clause to invalidate statutes that have the specific impermissible
extraterritorial effect of controlling prices, nor did it once use the word
“presumption.” We cannot conclude that the Court created this presumption while

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admittedly “say[ing] nothing new” about the extraterritoriality doctrine. Pork
Producers, 598 U.S. at 374. We also find the facts in this case analogous to those
in Edgar v. MITE Corp., 457 U.S. 624, 641 (1982) (plurality opinion). Here, as
there, the law “‘directly regulate[s] transactions which [take] place . . . wholly
outside the State.’” Pork Producers, 598 U.S. at 376 n.1 (quoting Edgar, 457 U.S.
at 641). Because discrimination is not required when a statute has the specific
extraterritorial effect of controlling the price of wholly out-of-state transactions, we
think AAM is likely to succeed on the merits of its claim.
Moving to the balance of harms and public interest, these factors “merge”
since Minnesota is the nonmoving party. Eggers v. Evnen, 48 F.4th 561, 564–65
(8th Cir. 2022). The district court found the balance of the harms and the public
interest to be “a wash.” Minnesota insists that the district court erred by finding a
“public interest to protect constitutional rights,” by failing to weigh Minnesota’s
interest in enforcing its laws, and by not considering that the Act serves the public
interest by making prescription drugs cheaper.
We find no abuse of discretion below. Although Minnesota is right that the
public interest is generally “served by maintaining the ability to enforce the law
adopted by the Minnesota Legislature,” Carson v. Simon, 978 F.3d 1051, 1061 (8th
Cir. 2020), it is also “always in the public interest to protect constitutional rights,”
id. (quoting Phelps-Roper v. Nixon, 545 F.3d 685, 694 (8th Cir. 2008), overruled on
other grounds by Phelps-Roper v. City of Manchester, 697 F.3d 678, 692 (8th Cir.
2012) (en banc)).2 And the balance of harms is not as clear as Minnesota insists.
While the Act might make generic prescription drugs more affordable, it could also
backfire and, for example, force generic manufacturers to pull out of the market. All
2 Minnesota also argues that the district court erred by citing Carson for this
proposition, since that case was about First Amendment rights. But we have
considered upholding constitutional rights in the public interest in other contexts too.
See, e.g., D.M. ex rel. Bao Xiong v. Minn. State High Sch. League, 917 F.3d 994,
1003 (8th Cir. 2019) (Equal Protection Clause and Title IX).

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told, the district court did not abuse its discretion by finding that the remaining
factors were neutral and in granting the preliminary injunction based on AAM’s
likelihood of success on the merits—“the most important of the Dataphase
factors”—and irreparable harm. Craig v. Simon, 980 F.3d 614, 617 (8th Cir. 2020)
(per curiam) (cleaned up) (citation omitted).
III.
Affirmed.
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