Brandle et al v. McKesson Corporation et al

Filing 35

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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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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For the Northern District of California

United States District Court

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JAMES BRANDLE, REBECCA GREGG, and DIANA
GUTHRIE
Plaintiffs,

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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,
Defendants.
/

ORDER GRANTING
MOTION TO REMAND

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INTRODUCTION
In this pharmaceutical product-liability action, plaintiffs move to remand back to state
court. Remand is GRANTED.
STATEMENT

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This action is one of many currently pending in state courts alleging injuries from the

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ingestion of propoxyphene. Plaintiffs here allege eighteen discrete state-law claims for relief

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against some or all defendants. The parties dispute when the present action was filed and how

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many times it has been removed: Plaintiffs assert that it was filed in state court in October 2011

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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

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For the Northern District of California

United States District Court

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dispute that in October 2012, plaintiffs, along with others in the similar actions, filed a motion

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for coordination before the California Judicial Counsel. In November 2012, defendants

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removed this action on two grounds: (1) Class Action Fairness Act of 2005 (“CAFA”); and

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(2) federal-question and supplemental jurisdiction. Plaintiffs now move to remand, arguing

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that neither basis was sufficient for removal. For the reasons stated below, this order agrees.

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The motion to remand is GRANTED.

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ANALYSIS
After a case is removed from state court, the federal district court must remand,

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“[i]f at any time before final judgment it appears that the district court lacks subject matter

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jurisdiction.” 28 U.S.C. 1447(c). Furthermore, “the burden of establishing federal jurisdiction is

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upon the party seeking removal[,]” and removal statutes are strictly construed against removal

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jurisdiction. See Emrich v. Touche Ross & Co., 846 F.2d 1190, 1195 (9th Cir. 1988) (citations

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omitted). This order will now examine removal under CAFA before proceeding to an analysis

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of removal on federal-question and supplemental jurisdiction grounds.

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1.

REMOVAL UNDER CAFA WAS IMPROPER.

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Removal of an action under CAFA is proper if it qualifies as a “mass action” with

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monetary relief claims of 100 or more plaintiffs proposed to be tried jointly on the grounds

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that their claims involve common questions of law or fact. Abrego Abrego v. Dow Chem. Co.,
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443 F.3d 676, 689 (9th Cir. 2006). CAFA did not shift the burden of establishing federal

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jurisdiction: “under CAFA[,] the burden of establishing removal jurisdiction remains, as before,

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on the proponent of federal jurisdiction.” Id. at 685. The number of plaintiffs here — three —

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falls far short of 100. Instead, defendant points to the language of the coordination petition and

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to non-binding authority to argue that plaintiffs, by petitioning for coordination, collectively

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qualify as a mass action under CAFA since they number over 100 in the aggregate. Our court

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of appeals has not yet addressed this issue, but for the reasons stated below, this order disagrees

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with defendant.

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A.

Plaintiffs’ Coordination Petition
Does Not Call for a Joint Trial.

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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
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petition, and cannot be reasonably construed as plaintiffs’ intent to pursue a joint trial.
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Defendant also fails to note that 28 U.S.C. Section 1332 specifically singles out those kinds
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of actions from its scope: “the term ‘mass action’ shall not include any civil action in which
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the claims have been consolidated or coordinated solely for pretrial proceedings.” 28 U.S.C.
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1332(d)(11)(B)(ii). Furthermore, our court of appeals has emphasized that “Congress intended
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to limit the numerosity component of mass actions quite severely by including only actions in
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which the trial itself would address the claims of at least one hundred plaintiffs.” Tanoh v. Dow
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Chem. Co., 561 F.3d 945, 954 (9th Cir. 2009). In light of 28 U.S.C. 1332(d)(11)(B)(ii)’s
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limiting language, “[our court of appeals] cannot sensibly entertain the notion that Congress
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intended to allow courts to override the considered legislative limitations on the ‘mass action’
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concept.” Ibid. Plaintiffs insist they filed the coordination petition for pretrial purposes, and
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because the petition contains no explicit request for the claims to be tried jointly, this order finds
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the language of the petition to be unavailing for defendant. If and when a mass trial is scheduled
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in state proceedings, there will be time enough then to remove.
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B.

In re Abbott Is Non-Binding and Inapposite.

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Defendant cites In re Abbott Labs, Inc., 698 F.3d 568 (7th Cir. 2012), for the proposition
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that a coordination petition should be reasonably construed as a proposal for joint trial, even
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though it does not expressly request it. Putting aside for the moment that Seventh Circuit

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decisions are non-binding while our court of appeals’ decision in Tanoh is binding, the Seventh

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Circuit decision is inapposite. In In re Abbott, the plaintiffs’ memorandum specifically

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requested consolidation “through trial,” 698 F.3d at 571. Here, plaintiffs claim they filed

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their petition for pretrial purposes only, and the language of the petition contains no language

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indicating they sought coordination through trial as well. Therefore, this order finds removal

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under CAFA to have been premature. To that extent, this order mirrors a previous ruling of the

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undersigned judge in a similar case, as well as others from our district. See Rice v. McKesson

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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

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For the Northern District of California

United States District Court

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Corp., No. 12-5939, 2013 WL 361168 (N.D. Cal 2013) (Judge Richard Seeborg).

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2.

REMOVAL UNDER FEDERAL-QUESTION
AND SUPPLEMENTAL JURISDICTION GROUNDS WAS IMPROPER.

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In the alternative, however, defendant asserts removal was proper under federal-question
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and supplemental jurisdiction grounds. This order disagrees.
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Defendant cites decisions from both the Supreme Court and our court of appeals which
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stand for the proposition that when certain state claims turn on federal law, removal of an
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action to federal court can be proper (Opp., Dkt. No. 24, at 5–6). This is, of course, an accurate
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portrayal of when removal can generally be appropriate. But defendant stretches these
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authorities too broadly to include the instant action, which only involves whiffs of federal law.
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Our court of appeals has made clear that “[t]he ‘mere presence of a federal issue in a state cause
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of action does not automatically confer federal-question jurisdiction.’” Nevada v. Bank of Am.
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Corp., 672 F.3d 661, 674–75 (9th Cir. 2012) (quoting Merrell Dow Pharms., Inc. v. Thompson,
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478 U.S. 804, 813 (1986)). In other words, if the “gravamen” of the action is not a federal issue,
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or if the federal issues are not “pivotal” to resolution, then federal-question jurisdiction is
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inappropriate. See id. at 675.
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Defendant presents two main arguments that a federal question exists here: (1) plaintiffs
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cited defendants’ alleged “failure to comply with federal standards and requirements” throughout
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their complaint; and (2) the allegations against defendants who manufactured generic
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propoxyphene products (“generic defendants”) revolve around the “federal duty of sameness.”

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More specifically, defendant characterizes plaintiffs’ complaint as one that generally alleged

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that generic defendants violated the federal duty of sameness, which requires that “[t]he [generic

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drug’s] labeling must be the same as the listed drug product’s labeling because the listed drug

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product is the basis for [generic drug] approval.” PLIVA, Inc. v. Mensing, 131 S.Ct. 2567, 2575

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(2011).

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During the hearing, defendant singled out one example where plaintiffs’ complaint

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supposedly implicated a federal question: “As a direct and proximate result of the defective

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and inappropriate warnings and the unreasonably dangerous and defective characteristics of
propoxyphene, and the Defendants’ failure to comply with federal standards and requirements,

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For the Northern District of California

United States District Court

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Plaintiffs suffered severe and permanent injuries herein alleged[]” (Compl. ¶ 428). Vague

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references to federal laws and regulations do not turn what are explicitly or inherently state

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causes of action into federal issues. As masters of their complaint, plaintiffs presumably pleaded

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state-law causes of action to avoid removal to federal court.

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Contrary to defendant’s characterizations, plaintiffs did not simply allege that generic

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defendants breached their “federal duty of sameness” by not including the same labels as the

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brand-name propoxyphene product manufacturers. On the contrary, plaintiffs alleged that

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generic defendants breached their state duty to warn by not making various labeling changes in

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spite of the federal duty of sameness. Specifically, plaintiffs alleged that when the FDA ordered

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brand-name defendants to change their label in 2009 (Compl. ¶ 3), the FDA also authorized

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generic defendants to change their labels to what the FDA ordered, “without running afoul of the

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requirement of ‘sameness’ because federal law expressly permits generic labeling to differ from

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[Reference Listed Drug] labeling where the labeling revision is ‘made to comply with current

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FDA labeling guidelines or other guidance’” (Compl. ¶ 6) (citing 21 C.F.R. 314.94(a)(8)(iv)).

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While not explicitly characterizing its argument as a preemption defense, defendant

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appears to imply that plaintiffs’ failure-to-warn claims are federally preempted (Opp., Dkt.

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No. 24, at 10). Defendant cites Mensing to argue that the “[Supreme Court] explicitly held

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that federal law preempts claims premised on alleged failure to warn about the risks of generic
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medications” (Opp., Dkt. No. 24, at 10) (citing 131 S.Ct. 2567). Even if that were so, such a

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defense — by itself — would not help defendant here, because “it is now settled law that a case

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may not be removed . . . on the basis of a federal defense, including . . . pre-emption, even if the

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defense is anticipated in the plaintiff’s complaint, and even if both parties concede that the

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federal defense is the only question truly at issue.” Caterpillar Inc. v. Williams, 482 U.S. 386,

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393 (1987) (citing Franchise Tax Bd. of Cal. v. Constr. Laborers Vacation Trust for S. Cal.,

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463 U.S. 1, 12 (1983)) (emphasis in original).

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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

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For the Northern District of California

United States District Court

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complaint rule.’” Id. at 393 (quoting Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 65 (1987)).

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Thus, “[o]nce an area of state law has been completely pre-empted, any claim purportedly based

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on that pre-empted state law is considered, from its inception, a federal claim, and therefore

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arises under federal law.” Id. at 393 (citing Franchise Tax Bd., 463 U.S. at 24). Examples

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include the complete preemption of Texas Health Care Liability Act claims by a specific

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provision of ERISA, Aetna Health Inc. v. Davila, 542 U.S. 200 (2004), and the complete

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preemption of state-law usury claims against national banks by the National Bank Act,

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Beneficial Nat’l Bank v. Anderson, 539 U.S. 1 (2003).

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In Mensing, the Supreme Court held that had the generic drug manufacturers

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“independently changed their labels to satisfy their state-law duty, they would have violated

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federal law.” Mensing, 131 S.Ct. 2578. Therefore, “federal drug regulations applicable to

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generic drug manufacturers directly conflict[ed] with, and . . . pre-empt[ed]” state-law claims

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based on generic drug manufacturers’ alleged failure to provide adequate warning labels. Id. at

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2572. In light of that holding, supplemental briefing was requested from counsel as to whether

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state failure-to-warn claims are completely preempted in our own case (Dkt No. 25).

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After reviewing the record before it, however, this order concludes Mensing does not

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apply here. In our case, the FDA allegedly directed brand-name defendants to strengthen their

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label in 2009, and generic defendants were obligated to follow suit. The complaint accuses
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generic defendants of failing to do something that FDA rulings already required. This is unlike

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Mensing, where the complaint criticized the generic defendants for conduct required by federal

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law.

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In its briefs and during the hearing, defendant cited Grable & Sons Metal Prod., Inc. v.

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Darue Eng’g & Mfg., 545 U.S. 308 (2005), to support its contention that plaintiffs’ complaint,

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by trying to artfully avoid Mensing, actually pleaded into federal-question jurisdiction. In

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Grable, the Supreme Court noted that it has refused to adopt a “‘single, precise, all-embracing

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test’ for jurisdiction over federal issues embedded in state-law claims between nondiverse

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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

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For the Northern District of California

United States District Court

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plaintiffs’ complaint implicates a federal issue, that alone is not enough for federal jurisdiction,

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because “[the Supreme Court has not] treated ‘federal issue’ as a password opening federal

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courts to any state action embracing a point of federal law.” Ibid. Therefore, if “the law that

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creates the cause of action is state law . . . federal jurisdiction is unavailable unless it appears that

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some substantial, disputed question of federal law is a necessary element of one of the well-

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pleaded state claims, or that one or the other claim is really one of federal law.” See Franchise

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Tax Bd., 463 U.S. at 13 (internal quotations omitted). Here, the federal duty of sameness is

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incidental to plaintiffs’ state-law claims, and not a necessary element of them.

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Finally, defendant also cited a non-binding decision in support of its opposition to

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remand. While Bowdrie v. Sun Pharm. Indus. Ltd., No. 12-853, 2012 WL 5465994 (E.D.N.Y.

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Nov. 9, 2012) is similar to the instant action, it can be distinguished in that the Bowdrie plaintiffs

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alleged that the brand-name reference drug there did change its label, and the generic drug

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manufacturers failed their federal duty of sameness. Id. at *1. Here, plaintiffs allege that neither

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the brand-name manufacturers nor generic defendants changed their labels, and that the latter

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could have done so in spite of their federal duty of sameness. Bowdrie is not only non-binding,

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it is inapposite.

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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.

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IT IS SO ORDERED.

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Dated: March 28, 2013.

WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE

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For the Northern District of California

United States District Court

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