FLAG ON THE PLAY: THE NINTH CIRCUIT’S END-RUN AROUND IMPLIED RIGHTS OF ACTION RUNS AFOUL IN COUNTY OF SANTA CLARA v. ASTRA, USA INC.

Brooke Burns

Abstract

In County of Santa Clara v. Astra, USA Inc., the Ninth Circuit held that a third party was entitled to bring a private right of action for breach of contract under federal common law, even though the governing statute neither expressly nor impliedly provides for this right. Because the Supreme Court has increasingly limited the ability of a third party to bring an implied right of action claim, private parties have pursued third party beneficiary claims instead. As a result, a considerable circuit split has resulted as to whether federal common law provides a private right of action to a third party beneficiary absent a statutory remedy. The Ninth Circuit’s decision in Santa Clara, therefore, deepens an existing circuit split and creates an “end-run” around Supreme Court jurisprudence by enabling a third party to assert a third party beneficiary claim and avoid the Supreme Court’s restrictions imposed on implied right of action claims. This Casenote addresses the false dualism of the two rights in the context of contracts between private parties and the government, identifying a problem that is not specific to the pharmaceutical industry. This Casenote explains the Ninth Circuit’s holding in light of recent Supreme Court jurisprudence, the circuit split, and the impact not only on the pharmaceutical industry but the greater impact on the partnership between the private and public sector.