Brandle et al v. McKesson Corporation et al, No. 3:2012cv05970 - Document 35 (N.D. Cal. 2013)

Court Description: ORDER GRANTING MOTION TO REMAND by Judge William Alsup [granting 19 Motion to Remand]. (whasec, COURT STAFF) (Filed on 3/28/2013)

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Brandle et al v. McKesson Corporation et al Doc. 35 1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA 8 9 11 For the Northern District of California United States District Court 10 JAMES BRANDLE, REBECCA GREGG, and DIANA GUTHRIE Plaintiffs, 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 No. C 12-05970 WHA v. MCKESSON CORPORATION, ELI LILLY AND COMPANY, AAIPHARMA, INC., AAIPHARMA LLC, AAI DEVELOPMENT SERVICES, INC., NEOSAN PHARMACEUTICALS, INC., ANODYNE PHARMACEUTICALS, INC., QUALITEST PHARMACEUTICALS, INC., VINTAGE PHARMACEUTICALS, INC., PROPST DISTRIBUTION, INC., BRENN DISTRIBUTION, INC., BRENN MANUFACTURING, INC., VINTAGE PHARMACEUTICALS, LLC, GENERICS INTERNATIONAL (US), INC., GENERICS BIDCO I, LLC, GENERICS BIDCO II, LLC, GENERICS INTERNATIONAL (US PARENT), INC., ENDO PHARMACEUTICALS, INC., ENDO PHARMACEUTICALS HOLDINGS INC., CORNERSTONE BIOPHARMA, INC., CORNERSTONE BIOPHARMA HOLDINGS, INC., TEVA BIOPHARMACEUTICALS, INC., TEVA PHARMACEUTICALS USA, INC, MYLAN PHARMACEUTICALS, INC., MYLAN, INC, COVIDIEN PLC, COVIDIEN INC., MALLINCKRODT INC., WATSON PHARMACEUTICALS, INC., ABLE LABORATORIES, INC., ARISTOS PHARMACEUTICALS, INC., and DOES 1 through 50, inclusive, ORDER GRANTING MOTION TO REMAND Defendants. / 28 1 2 3 INTRODUCTION In this pharmaceutical product-liability action, plaintiffs move to remand back to state court. Remand is GRANTED. STATEMENT 4 5 This action is one of many currently pending in state courts alleging injuries from the 6 ingestion of propoxyphene. Plaintiffs here allege eighteen discrete state-law claims for relief 7 against some or all defendants. The parties dispute when the present action was filed and how 8 many times it has been removed: Plaintiffs assert that it was filed in state court in October 2011 9 and that it was removed twice, while defendant Eli Lilly and Company claims it was filed in state court in November 2012 and that it was removed once. The parties, however, do not 11 For the Northern District of California United States District Court 10 dispute that in October 2012, plaintiffs, along with others in the similar actions, filed a motion 12 for coordination before the California Judicial Counsel. In November 2012, defendants 13 removed this action on two grounds: (1) Class Action Fairness Act of 2005 (“CAFA”); and 14 (2) federal-question and supplemental jurisdiction. Plaintiffs now move to remand, arguing 15 that neither basis was sufficient for removal. For the reasons stated below, this order agrees. 16 The motion to remand is GRANTED. 17 18 ANALYSIS After a case is removed from state court, the federal district court must remand, 19 “[i]f at any time before final judgment it appears that the district court lacks subject matter 20 jurisdiction.” 28 U.S.C. 1447(c). Furthermore, “the burden of establishing federal jurisdiction is 21 upon the party seeking removal[,]” and removal statutes are strictly construed against removal 22 jurisdiction. See Emrich v. Touche Ross & Co., 846 F.2d 1190, 1195 (9th Cir. 1988) (citations 23 omitted). This order will now examine removal under CAFA before proceeding to an analysis 24 of removal on federal-question and supplemental jurisdiction grounds. 25 1. REMOVAL UNDER CAFA WAS IMPROPER. 26 Removal of an action under CAFA is proper if it qualifies as a “mass action” with 27 monetary relief claims of 100 or more plaintiffs proposed to be tried jointly on the grounds 28 that their claims involve common questions of law or fact. Abrego Abrego v. Dow Chem. Co., 2 1 443 F.3d 676, 689 (9th Cir. 2006). CAFA did not shift the burden of establishing federal 2 jurisdiction: “under CAFA[,] the burden of establishing removal jurisdiction remains, as before, 3 on the proponent of federal jurisdiction.” Id. at 685. The number of plaintiffs here — three — 4 falls far short of 100. Instead, defendant points to the language of the coordination petition and 5 to non-binding authority to argue that plaintiffs, by petitioning for coordination, collectively 6 qualify as a mass action under CAFA since they number over 100 in the aggregate. Our court 7 of appeals has not yet addressed this issue, but for the reasons stated below, this order disagrees 8 with defendant. 9 A. Plaintiffs’ Coordination Petition Does Not Call for a Joint Trial. 10 particular section quoted California Civil Procedure Code Section 404.1 as the basis for the For the Northern District of California United States District Court Although the coordination petition does include the language “for all purposes” that 11 12 petition, and cannot be reasonably construed as plaintiffs’ intent to pursue a joint trial. 13 Defendant also fails to note that 28 U.S.C. Section 1332 specifically singles out those kinds 14 of actions from its scope: “the term ‘mass action’ shall not include any civil action in which 15 the claims have been consolidated or coordinated solely for pretrial proceedings.” 28 U.S.C. 16 1332(d)(11)(B)(ii). Furthermore, our court of appeals has emphasized that “Congress intended 17 to limit the numerosity component of mass actions quite severely by including only actions in 18 which the trial itself would address the claims of at least one hundred plaintiffs.” Tanoh v. Dow 19 Chem. Co., 561 F.3d 945, 954 (9th Cir. 2009). In light of 28 U.S.C. 1332(d)(11)(B)(ii)’s 20 limiting language, “[our court of appeals] cannot sensibly entertain the notion that Congress 21 intended to allow courts to override the considered legislative limitations on the ‘mass action’ 22 concept.” Ibid. Plaintiffs insist they filed the coordination petition for pretrial purposes, and 23 because the petition contains no explicit request for the claims to be tried jointly, this order finds 24 the language of the petition to be unavailing for defendant. If and when a mass trial is scheduled 25 in state proceedings, there will be time enough then to remove. 26 B. In re Abbott Is Non-Binding and Inapposite. 27 Defendant cites In re Abbott Labs, Inc., 698 F.3d 568 (7th Cir. 2012), for the proposition 28 that a coordination petition should be reasonably construed as a proposal for joint trial, even 3 1 though it does not expressly request it. Putting aside for the moment that Seventh Circuit 2 decisions are non-binding while our court of appeals’ decision in Tanoh is binding, the Seventh 3 Circuit decision is inapposite. In In re Abbott, the plaintiffs’ memorandum specifically 4 requested consolidation “through trial,” 698 F.3d at 571. Here, plaintiffs claim they filed 5 their petition for pretrial purposes only, and the language of the petition contains no language 6 indicating they sought coordination through trial as well. Therefore, this order finds removal 7 under CAFA to have been premature. To that extent, this order mirrors a previous ruling of the 8 undersigned judge in a similar case, as well as others from our district. See Rice v. McKesson 9 Corp., No. 12-5949, 2013 WL 97738 (N.D. Cal. 2013); Freitas v. McKesson Corp., No. 12-5948, 2013 WL 685200 (N.D. Cal. 2013) (Judge Samuel Conti); Posey v. McKesson 11 For the Northern District of California United States District Court 10 Corp., No. 12-5939, 2013 WL 361168 (N.D. Cal 2013) (Judge Richard Seeborg). 12 2. REMOVAL UNDER FEDERAL-QUESTION AND SUPPLEMENTAL JURISDICTION GROUNDS WAS IMPROPER. 13 In the alternative, however, defendant asserts removal was proper under federal-question 14 and supplemental jurisdiction grounds. This order disagrees. 15 Defendant cites decisions from both the Supreme Court and our court of appeals which 16 stand for the proposition that when certain state claims turn on federal law, removal of an 17 action to federal court can be proper (Opp., Dkt. No. 24, at 5–6). This is, of course, an accurate 18 portrayal of when removal can generally be appropriate. But defendant stretches these 19 authorities too broadly to include the instant action, which only involves whiffs of federal law. 20 Our court of appeals has made clear that “[t]he ‘mere presence of a federal issue in a state cause 21 of action does not automatically confer federal-question jurisdiction.’” Nevada v. Bank of Am. 22 Corp., 672 F.3d 661, 674–75 (9th Cir. 2012) (quoting Merrell Dow Pharms., Inc. v. Thompson, 23 478 U.S. 804, 813 (1986)). In other words, if the “gravamen” of the action is not a federal issue, 24 or if the federal issues are not “pivotal” to resolution, then federal-question jurisdiction is 25 inappropriate. See id. at 675. 26 Defendant presents two main arguments that a federal question exists here: (1) plaintiffs 27 cited defendants’ alleged “failure to comply with federal standards and requirements” throughout 28 their complaint; and (2) the allegations against defendants who manufactured generic 4 1 propoxyphene products (“generic defendants”) revolve around the “federal duty of sameness.” 2 More specifically, defendant characterizes plaintiffs’ complaint as one that generally alleged 3 that generic defendants violated the federal duty of sameness, which requires that “[t]he [generic 4 drug’s] labeling must be the same as the listed drug product’s labeling because the listed drug 5 product is the basis for [generic drug] approval.” PLIVA, Inc. v. Mensing, 131 S.Ct. 2567, 2575 6 (2011). 7 During the hearing, defendant singled out one example where plaintiffs’ complaint 8 supposedly implicated a federal question: “As a direct and proximate result of the defective 9 and inappropriate warnings and the unreasonably dangerous and defective characteristics of propoxyphene, and the Defendants’ failure to comply with federal standards and requirements, 11 For the Northern District of California United States District Court 10 Plaintiffs suffered severe and permanent injuries herein alleged[]” (Compl. ¶ 428). Vague 12 references to federal laws and regulations do not turn what are explicitly or inherently state 13 causes of action into federal issues. As masters of their complaint, plaintiffs presumably pleaded 14 state-law causes of action to avoid removal to federal court. 15 Contrary to defendant’s characterizations, plaintiffs did not simply allege that generic 16 defendants breached their “federal duty of sameness” by not including the same labels as the 17 brand-name propoxyphene product manufacturers. On the contrary, plaintiffs alleged that 18 generic defendants breached their state duty to warn by not making various labeling changes in 19 spite of the federal duty of sameness. Specifically, plaintiffs alleged that when the FDA ordered 20 brand-name defendants to change their label in 2009 (Compl. ¶ 3), the FDA also authorized 21 generic defendants to change their labels to what the FDA ordered, “without running afoul of the 22 requirement of ‘sameness’ because federal law expressly permits generic labeling to differ from 23 [Reference Listed Drug] labeling where the labeling revision is ‘made to comply with current 24 FDA labeling guidelines or other guidance’” (Compl. ¶ 6) (citing 21 C.F.R. 314.94(a)(8)(iv)). 25 While not explicitly characterizing its argument as a preemption defense, defendant 26 appears to imply that plaintiffs’ failure-to-warn claims are federally preempted (Opp., Dkt. 27 No. 24, at 10). Defendant cites Mensing to argue that the “[Supreme Court] explicitly held 28 that federal law preempts claims premised on alleged failure to warn about the risks of generic 5 1 medications” (Opp., Dkt. No. 24, at 10) (citing 131 S.Ct. 2567). Even if that were so, such a 2 defense — by itself — would not help defendant here, because “it is now settled law that a case 3 may not be removed . . . on the basis of a federal defense, including . . . pre-emption, even if the 4 defense is anticipated in the plaintiff’s complaint, and even if both parties concede that the 5 federal defense is the only question truly at issue.” Caterpillar Inc. v. Williams, 482 U.S. 386, 6 393 (1987) (citing Franchise Tax Bd. of Cal. v. Constr. Laborers Vacation Trust for S. Cal., 7 463 U.S. 1, 12 (1983)) (emphasis in original). 8 9 There is, however, a narrow exception. “On occasion, the Court has concluded that the pre-emptive force of a statute is so ‘extraordinary’ that it ‘converts an ordinary state common-law complaint into one stating a federal claim for purposes of the well-pleaded 11 For the Northern District of California United States District Court 10 complaint rule.’” Id. at 393 (quoting Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 65 (1987)). 12 Thus, “[o]nce an area of state law has been completely pre-empted, any claim purportedly based 13 on that pre-empted state law is considered, from its inception, a federal claim, and therefore 14 arises under federal law.” Id. at 393 (citing Franchise Tax Bd., 463 U.S. at 24). Examples 15 include the complete preemption of Texas Health Care Liability Act claims by a specific 16 provision of ERISA, Aetna Health Inc. v. Davila, 542 U.S. 200 (2004), and the complete 17 preemption of state-law usury claims against national banks by the National Bank Act, 18 Beneficial Nat’l Bank v. Anderson, 539 U.S. 1 (2003). 19 In Mensing, the Supreme Court held that had the generic drug manufacturers 20 “independently changed their labels to satisfy their state-law duty, they would have violated 21 federal law.” Mensing, 131 S.Ct. 2578. Therefore, “federal drug regulations applicable to 22 generic drug manufacturers directly conflict[ed] with, and . . . pre-empt[ed]” state-law claims 23 based on generic drug manufacturers’ alleged failure to provide adequate warning labels. Id. at 24 2572. In light of that holding, supplemental briefing was requested from counsel as to whether 25 state failure-to-warn claims are completely preempted in our own case (Dkt No. 25). 26 After reviewing the record before it, however, this order concludes Mensing does not 27 apply here. In our case, the FDA allegedly directed brand-name defendants to strengthen their 28 label in 2009, and generic defendants were obligated to follow suit. The complaint accuses 6 1 generic defendants of failing to do something that FDA rulings already required. This is unlike 2 Mensing, where the complaint criticized the generic defendants for conduct required by federal 3 law. 4 In its briefs and during the hearing, defendant cited Grable & Sons Metal Prod., Inc. v. 5 Darue Eng’g & Mfg., 545 U.S. 308 (2005), to support its contention that plaintiffs’ complaint, 6 by trying to artfully avoid Mensing, actually pleaded into federal-question jurisdiction. In 7 Grable, the Supreme Court noted that it has refused to adopt a “‘single, precise, all-embracing 8 test’ for jurisdiction over federal issues embedded in state-law claims between nondiverse 9 parties.” 545 U.S. at 314 (quoting Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 821 (1988) (Stevens, J., concurring)). Assuming we have non-diverse parties here, and 11 For the Northern District of California United States District Court 10 plaintiffs’ complaint implicates a federal issue, that alone is not enough for federal jurisdiction, 12 because “[the Supreme Court has not] treated ‘federal issue’ as a password opening federal 13 courts to any state action embracing a point of federal law.” Ibid. Therefore, if “the law that 14 creates the cause of action is state law . . . federal jurisdiction is unavailable unless it appears that 15 some substantial, disputed question of federal law is a necessary element of one of the well- 16 pleaded state claims, or that one or the other claim is really one of federal law.” See Franchise 17 Tax Bd., 463 U.S. at 13 (internal quotations omitted). Here, the federal duty of sameness is 18 incidental to plaintiffs’ state-law claims, and not a necessary element of them. 19 Finally, defendant also cited a non-binding decision in support of its opposition to 20 remand. While Bowdrie v. Sun Pharm. Indus. Ltd., No. 12-853, 2012 WL 5465994 (E.D.N.Y. 21 Nov. 9, 2012) is similar to the instant action, it can be distinguished in that the Bowdrie plaintiffs 22 alleged that the brand-name reference drug there did change its label, and the generic drug 23 manufacturers failed their federal duty of sameness. Id. at *1. Here, plaintiffs allege that neither 24 the brand-name manufacturers nor generic defendants changed their labels, and that the latter 25 could have done so in spite of their federal duty of sameness. Bowdrie is not only non-binding, 26 it is inapposite. 27 28 7 1 2 3 CONCLUSION For the reasons stated above, plaintiffs’ motion to remand is GRANTED. The Clerk shall remand this action to the Superior Court of California, County of San Francisco. 4 5 IT IS SO ORDERED. 6 7 Dated: March 28, 2013. WILLIAM ALSUP UNITED STATES DISTRICT JUDGE 8 9 11 For the Northern District of California United States District Court 10 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8

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