Aetna Inc. v. Gilead Sciences, Inc. et al

Filing 39

ORDER by Judge Edward M. Chen Granting 18 Plaintiff's Motion to Remand, and Denying 26 Defendants' Cross-Motion. (emcsec, COURT STAFF) (Filed on 4/20/2022)

1
2
3
4

UNITED STATES DISTRICT COURT

5

NORTHERN DISTRICT OF CALIFORNIA

6
7

AETNA INC.,
Plaintiff,

8
v.

9
10

GILEAD SCIENCES, INC., et al.,
Defendants.

11

United States District Court
Northern District of California

Case No. 22-cv-00740-EMC
ORDER GRANTING PLAINTIFF’S
MOTION TO REMAND, AND
DENYING DEFENDANTS’ CROSSMOTION
Docket Nos. 18, 26

12
13
Aetna initiated this antitrust lawsuit in state court against Gilead, BMS, and Janssen. In its

14
15

complaint, it asserted only state law claims. Gilead subsequently removed the case to federal

16

court. Currently pending before the Court is Aetna’s motion to remand and Defendants’ cross-

17

motion to enjoin Aetna. Having considered the parties’ briefs and accompanying submissions, as

18

well as the oral argument of counsel, the Court hereby GRANTS Aetna’s motion and DENIES

19

Defendants’ cross-motion.
I.

20

The pending motions implicate two cases filed by Aetna: the instant lawsuit (hereinafter

21
22

FACTUAL & PROCEDURAL BACKGROUND

Aetna II) and an earlier-filed suit (hereinafter Aetna I1) that Aetna voluntarily dismissed.

23

12/14/2021. Aetna filed Aetna I in state court. Aetna asserted only state law claims. At or

24

about the same time, Aetna’s counsel (the Crowell law firm) also filed a number of cases on behalf

25

of other individual health plans in federal court. Those cases had federal claims as well as state

26

claims.

27
28

1

The case number for Aetna I is No. C-21-9827 EMC (N.D. Cal.).

1
2
3

12/20/2021. Gilead removed Aetna I to federal court. Gilead claimed both diversity
jurisdiction and federal question jurisdiction as the basis for removal.
With respect to diversity jurisdiction, Gilead took note of (1) complete diversity and (2) an

4

amount in controversy well in excess of $75,000. Gilead acknowledged the removal statute’s

5

forum defendant rule – and the fact that it is a forum defendant. See 28 U.S.C. § 1441(b)(2) (“A

6

civil action otherwise removable solely on the basis of the jurisdiction under section 1332(a) of

7

this title [i.e., diversity jurisdiction] may not be removed if any of the parties in interest properly

8

joined and served as defendants is a citizen of the State in which such action is brought.”)

9

(emphasis added). However, Gilead argued that the forum defendant rule was not applicable

10

United States District Court
Northern District of California

11

because, at the time it removed the case to federal court, it had not been “properly served.”
On federal question jurisdiction, Gilead contended, inter alia, that substantial federal

12

issues were raised regarding federal patent law, the Hatch-Waxman Act and the FDA regulatory

13

scheme, and federal antitrust law.

14
15
16
17
18

1/18/2022. Aetna moved to remand in Aetna I. The opposition was set to be filed on
2/1/2022.
1/31/2022. Aetna filed Aetna II (the instant action) in state court. The Aetna II complaint
is basically the same as the Aetna I complaint.
2/1/2022. The following day, Aetna filed a notice of voluntary dismissal in Aetna I. (This

19

was before Gilead could file its opposition to the motion to remand in Aetna I.) Thus, implicitly,

20

Aetna was intending to use Aetna II as its litigation vehicle rather than Aetna I. On the same day,

21

Aetna served the Aetna II complaint on the U.S.-based defendants, including Gilead. Aetna was

22

thus trying to claim the benefit of the forum defendant rule to preclude removal in Aetna II.

23
24
25

2/3/2022. Gilead nevertheless removed Aetna II from state to federal court. Again, Gilead
invoked both diversity jurisdiction and federal question jurisdiction.
2/7/2022. Defendants filed a motion asking for the voluntary dismissal in Aetna I to be

26

vacated. The Court denied that motion. Thus, Aetna I is effectively a “dead” case, leaving only

27

Aetna II.

28
2

1

2/16/2022. In Aetna II, Defendants filed a motion to dismiss.2

2

3/2/2022. In Aetna II, Aetna filed the pending motion to remand.

3

3/16/2022. Defendants filed their opposition to the motion to remand, along with a cross-

4

motion to enjoin Aetna from prosecuting its claims in state court. According to Defendants, if the

5

Court grants the motion to remand, then it should issue an injunction preventing Aetna from

6

prosecuting Aetna II in state court.
II.

7
8

A.

DISCUSSION

Removal Jurisdiction
Title 28 U.S.C. § 1441(a) provides that a case may be removed to federal court so long as

9

there is original jurisdiction – e.g., diversity or federal question jurisdiction. See 28 U.S.C. §

11

United States District Court
Northern District of California

10

1441(a). However, under the forum defendant rule, “[a] civil action otherwise removable solely

12

on the basis of the jurisdiction under section 1332(a) of this title [i.e., diversity jurisdiction] may

13

not be removed if any of the parties in interest properly joined and served as defendants is a citizen

14

of the State in which such action is brought.” Id. § 1448(b)(2).
As noted above, Gilead removed the instant case invoking both diversity jurisdiction and

15
16

federal question jurisdiction. Thus, for the Court to remand, it would have to find both that (1)

17

diversity jurisdiction is lacking or the forum defendant rule applies and that (2) federal question

18

jurisdiction is lacking.

19

B.

Diversity Jurisdiction – Forum Defendant Rule
There is no dispute between the parties that there is diversity jurisdiction – i.e., the parties

20
21

are completely diverse and the amount in controversy exceeds $75,000. The only dispute is

22

whether the forum defendant rule applies.
“Properly Served”

23

1.

24

As an initial matter, Defendants suggest that the forum defendant rule does not apply

25

because, even though Gilead is a citizen of California, it was not “properly served.” According to

26

Defendants, Gilead cannot be said to have been properly served in Aetna II because Aetna’s

27
28

The motion was heard on 3/31/2022 – the same day as the challenges to the other Individual
Health Plan Plaintiffs’ complaints.
3
2

1

actions of filing Aetna II and then voluntarily dismissing Aetna I were part of “an attempt to

2

subvert this Court’s removal jurisdiction.” Opp’n at 5.

3

Defendants’ argument is not persuasive. On its face, “properly served” indicates that the

4

only question is whether there was service on a defendant in compliance with state law. Notably,

5

Defendants do not cite any authority suggesting that “properly served” could have a different

6

meaning. In fact, case law is, if anything, contrary to Defendants’ position. Cf. Gibbons v.

7

Bristol-Myers Squibb Co., 919 F.3d 699, 705 (2d Cir. 2019) (“In the usual case, application of the

8

forum defendant rule is straightforward: a defendant is sued in a diversity action in the state courts

9

of its home state, is served in accordance with state law, attempts to remove the case, and is

10

rebuffed by a district court applying Section 1441(b)(2).”) (emphasis added).

United States District Court
Northern District of California

11

Here, there appears to be no dispute that Gilead was served in compliance with state law.

12

See Sasse Decl. ¶ 7 (“On February 1, 2022, Aetna personally served the registered agents for 6 of

13

the 8 Defendants named in the new state action [Aetna II].”).

14

2.

Waiver and/or Estoppel

15

Defendants assert that, even if the forum defendant rule is applicable (i.e., Gilead was

16

“properly served”), that is not the end of the matter because the forum defendant rule is not

17

jurisdictional in nature – which means that a plaintiff may waive the forum defendant rule or that a

18

plaintiff may be estopped from invoking the rule.

19

Defendants are correct that the forum defendant rule is not jurisdictional. See 16 Moore’s

20

Fed. Prac. – Civ. § 107.55 (2022) (“All circuits that have addressed the issue have now held that

21

the ban on local defendants is procedural and nonjurisdictional.”). The Ninth Circuit has

22

expressly held such. See Lively v. Wild Oats Mkts., Inc., 456 F.3d 933, 939 (9th Cir. 2006)

23

(stating that the forum defendant rule “is a procedural, or non-jurisdictional, rule”); Infuturia Glob.

24

Ltd. v. Sequus Pharm., Inc., 631 F.3d 1133, 1137 (9th Cir. 2011) (stating that “[b]oth the forum

25

defendant rule and the requirement for diversity at the time of removal are statutory requirements

26

imposed by the general removal statute, 28 U.S.C. § 1441, not jurisdictional requirements”). The

27

Ninth Circuit has also explicitly held that the rule may be waived. See Lively, 456 F.3d at 942

28

(stating that “the forum defendant rule . . . is a procedural requirement, and thus a violation of this
4

1

rule constitutes a waivable non-jurisdictional defect subject to the 30-day time limit imposed by §

2

1447(c)”). Although the Ninth Circuit has not made any ruling as to estoppel, at least some

3

district courts have. For example, in In re Sorin 3T Heater-Cooler Sys. Prods. Liab. Litig. (No.

4

II), MDL No. 2816, 2021 U.S. Dist. LEXIS 225175 (M.D. Pan. Nov. 22, 2021), the court noted

5

that

6
7
8
9
10

courts within our circuit and elsewhere have long recognized that
. . . grounds [other than waiver] may exist for declining to strictly
enforce [the forum defendant] rule. Relevant factors include the
amount of time elapsed before a remand motion is filed, whether the
movant has made use of federal processes or sought relief from the
federal court before moving to remand, and whether the movant has
engaged in conduct or reaped some benefit "which would make it
inequitable to remand the case."

United States District Court
Northern District of California

11

Id. at *15-16 (emphasis added); cf. United States v. Wen, 454 F. Supp. 3d 187, 193 (W.D.N.Y.

12

2020) (in discussing exhaustion requirement under the First Step Act (i.e., before a motion for

13

compassionate release may be filed), stating that “the law is well-established that even statutory

14

exhaustion requirements – so long as not jurisdictional in nature – are subject to the doctrines of

15

waiver and equitable estoppel”). For purposes of the pending motion, the Court assumes that

16

estoppel is a viable doctrine to prevent application of the forum defendant rule.

17

In the instant case, Defendants do not really make an argument of waiver but rather focus

18

on estoppel – i.e., contending that, as a matter of fairness, Aetna must be prevented from trying to

19

subvert the Court’s removal jurisdiction. Although this argument is not entirely lacking in merit,

20

the Court rejects it.

21
22

a.

Forum Shopping Motive

As an initial matter, the Court takes into consideration that there has been gamesmanship

23

or forum shopping by both parties, and not just Aetna. As noted above, Aetna I came to this Court

24

from state court because of Gilead’s “snap removal.” That is, even though Gilead is a California

25

resident and thus a forum defendant, it was able to remove Aetna I and argue against application of

26

the forum defendant rule because it managed to remove the case before Aetna was able to serve it.

27

Defendants protest that snap removal is legally permissible, as this Court and others have held

28

(though not all courts agree). This is true. Nevertheless, that does not mean that the Court cannot
5

1
2

take into account that conduct as part of the equities.
Indeed, it is worth noting that Aetna can make an argument similar to that made by
Defendants – i.e., that its forum shopping conduct is legally permissible under Federal Rule of

4

Civil Procedure 41. The literal text of Rule 41 allows a plaintiff to unilaterally voluntarily

5

dismiss, so long as it does so before an answer or a motion for summary judgment. Furthermore,

6

nothing on the face of Rule 41 precludes a plaintiff from refiling the same exact case based on the

7

same exact facts and asserting the same exact claims. In fact, Rule 41 states that, unless a notice

8

of dismissal “states otherwise, the dismissal is without prejudice.” Fed. R. Civ. P. 41(a)(1)(B)

9

(emphasis added). It so states without qualification. See also Concha v. London, 62 F.3d 1493,

10

1506 (9th Cir. 1995) (noting that, “[u]nless otherwise stated, the dismissal is ordinarily without

11

United States District Court
Northern District of California

3

prejudice to the plaintiff's right to commence another action for the same cause against the same

12

defendants”).

13

Moore’s treatise also lends support to Aetna’s position. The treatise notes that, when a

14

plaintiff files a notice of voluntary dismissal under Rule 41, the “plaintiff’s motive for dismissal is

15

generally irrelevant if the dismissal is effected by notice in the early stages of the litigation.”

16

Moore’s § 41.11 (emphasis added). That is what happened in the instant case. Aetna I was filed

17

on 12/20/2021; Aetna voluntarily dismissed the case on 2/2/2022. A forum shopping motive thus

18

does not vitiate an otherwise proper dismissal.

19

Indeed, Moore’s treatise also notes that, even when a plaintiff is required to file a motion

20

for a voluntary dismissal under Rule 41, a “bad” motive on the part of the plaintiff is not

21

necessarily a bar. The treatise states:

22
23
24
25
26
27

A plaintiff’s intention to pursue the litigation in state court does not,
by itself, constitute [legal] prejudice [to the defendant] sufficient to
justify denial of a motion for a voluntary dismissal.
Accordingly, some courts have held that a plaintiff may seek to
dismiss federal claims to defeat subject matter jurisdiction, or to
refile a complaint naming nondiverse parties to defeat diversity
jurisdiction. Similarly, other courts have held that dismissal is
permissible even though the plaintiff’s only motive is to defeat
removal jurisdiction.

28
6

1

Moore’s § 41.40.3 See, e.g., Breuer v. Weyerhaeuser NR Co., No. C20-0479JLR, 2020 U.S. Dist.

2

LEXIS 131565, at *2-4 (W.D. Wash. July 24, 2020) (granting plaintiffs’ motion to voluntarily

3

dismiss even after plaintiffs withdrew their motion to remand; acknowledging that plaintiffs

4

sought voluntarily dismissal so that they could refile in state court but that defendant’s loss of a

5

federal forum did not constitute prejudice to defendant); Covington v. Syngenta Corp., 225 F.

6

Supp. 3d 384, 390-91 (D.S.C. 2016) (denying plaintiff’s motion to remand but stating that this

7

“does not mean that Plaintiff cannot seek voluntary dismissal without prejudice as a mechanism to

8

remand,” i.e., so as “to litigate the case in state court”); Hunter v. Surgitek/Medical Engineering

9

Corp., No. S92-56M, 1992 U.S. Dist. LEXIS 9696, *4-5 (N.D. Ind. May 29, 1992) (noting that
“[d]ismissals without prejudice are granted in removed actions so that a plaintiff may proceed with

11

United States District Court
Northern District of California

10

the litigation in a state court, even if the intention or result is to defeat federal diversity

12

jurisdiction”).4
The Wright & Miller treatise is in accord with the Moore’s treatise, noting that

13
14

removal followed by dismissal frequently is employed when a
plaintiff who is unwilling to prosecute the action in federal court
wishes to dismiss to start a new action in state court and preclude
removal by joining on or more nondiverse parties, changing the
amount sought, eliminating any federal claim, or otherwise.

15
16
17

Wright & Miller, Fed. Prac. & Proc. § 2363. Notably, in Wilson v. City of San Jose, 111 F.3d 688

18

(9th Cir. 1997) the Ninth Circuit quoted this statement in Wright & Miller approvingly, adding

19
20
21
22
23
24
25
26
27
28

The treatise adds, however, that this is not true in the Eighth Circuit. See Moore’s § 41.40
(“[T]he Eighth Circuit has ruled that a plaintiff should not be permitted to dismiss voluntarily an
action merely to deprive the defendant of federal court jurisdiction. This is in line with the Eighth
Circuit’s general rule that it is inappropriate for a plaintiff to use voluntary dismissal as a means of
seeking a more favorable forum.”); see also Thatcher v. Hanover Ins. Grp., Inc., 659 F.3d 1212,
1214 (8th Cir. 2011) (“In addressing whether a district court should allow voluntary dismissal, we
have repeatedly stated that it is inappropriate for a plaintiff to use voluntary dismissal as an avenue
for seeking a more favorable forum.”).
3

4

See also Johnson v. Pharmacia & Upjohn Co., 192 F.R.D. 226, 228 (W.D. Mich. 1999)
(acknowledging that “the obvious reason [plaintiff] seeks a voluntary dismissal is to defeat federal
jurisdiction” but stating that “the fact that a voluntary dismissal will destroy federal jurisdiction is
insufficient to constitute [legal] prejudice to a defendant”); Katzman v. Am. Airlines, No. 97 Civ.
8321 (JSM), 1997 U.S. Dist. LEXIS 19303, at *2-3 (S.D.N.Y. Dec. 4, 1997) (stating that, “even
when plaintiffs seek discretionary dismissal under Rule 41(a)(2), nearly all courts grant those
dismissals when defendant's only argument against dismissal is that the plaintiff manifestly seeks
to defeat federal jurisdiction”).
7

1

that “voluntary dismissal of an action that has been removed to federal court does not constitute

2

the sort of egregious forum shopping that federal courts have sought to discourage.” Id. at 694;

3

see also Chen v. eBay Inc., No. 15-cv-05048-HSG, 2016 U.S. Dist. LEXIS 28100, at *8 (N.D.

4

Cal. Mar. 4, 2016) (stating that “[t]he Ninth Circuit’s reasoning in Wilson makes clear that even if

5

Plaintiffs dismissed Chen I with the sole intention of filing Chen II to avoid CAFA jurisdiction,

6

that strategy should not be considered ‘egregious forum shopping’”).

7
8
9
10

United States District Court
Northern District of California

11

According to Defendants, Wilson and Chen are distinguishable because they
focus on whether a plaintiff may make jurisdictional changes in a
subsequent action to prevent removal, such as “by the joinder of
nondiverse parties” or making “change in the amount sought.”
Here, Aetna did not make any jurisdictional changes in its refiled
complaint – diversity jurisdiction indisputably still exists. Rather,
Aetna simply refiled suit to manipulate the statutory procedures
governing removal and remand.

12

Opp’n at 8-9 (emphasis in original). But it is far from clear that was either Wilson or Chen’s

13

focus. In Wilson, the Ninth Circuit quoted Wright & Miller verbatim – referring to a plaintiff who

14

“‘wishes to dismiss in order to start a new action in state court and preclude removal by the

15

joinder of nondiverse parties, a change in the amount sought, or otherwise.’” Wilson, 111 F.3d at

16

694 (emphasis added). In Chen, it appears that the plaintiffs simply wanted to clarify in Chen II

17

that the class was composed of only California citizens given the defendant’s position that the

18

class definition in Chen I “is unclear as to the applicable time frame and could potentially include

19

individuals who previously resided in California ‘as far back as the year 2010’ but do not currently

20

reside in California.” Chen I, No. C-15-3444 SC (N.D. Cal.) (Docket No. 1) (Not. of Removal ¶

21

11); see also Chen I (Docket No. 2) (Compl. ¶ 56) (alleging that “Plaintiffs bring this California

22

class action on behalf of themselves and a class defined as all residents of the State of California

23

who are sellers of goods and services emanating from California who have or have had user

24

agreements with [Defendants] as far back as the year 2010, and who have utilized and are utilizing

25

the services provided by [Defendants]”).

26

Moreover, aside from Wilson and Chen, the Eleventh Circuit’s decision in Goodwin v.

27

Reynolds, 757 F.3d 1216 (11th Cir. 2014), strongly supports Aetna’s position that its actions were

28

entirely appropriate. In Goodwin, the plaintiff sued several defendants in state court.
8

1

One of the defendants is a citizen of the forum state. The two nonforum defendants, however, [snap] removed the case to federal court
before the forum defendant had yet been served, and indeed before
any defendant had been served. The district court subsequently
granted Plaintiff's motion to dismiss the case without prejudice
pursuant to Federal Rule of Civil Procedure 41(a)(2) so that Plaintiff
could refile the case in state court in such a manner as to irrefutably
trigger the forum-defendant rule and, thereby, preclude a second
removal. Defendants argue that this was an abuse of discretion.

2
3
4
5
6

Id. at 1218. The Eleventh Circuit disagreed.

7

First, the court rejected the defendants’ contention that “dismissal was improper because it

8

defeated their ‘substantial’ right of removal.” Id. at 1219. The defendants cited an Eighth Circuit

9

case stating that “a party is not permitted to dismiss merely . . . to seek a more favorable forum.”
Id. at 1220 (internal quotation marks omitted). But the Eleventh Circuit noted that a prior

11

United States District Court
Northern District of California

10

Eleventh Circuit case was in some tension with the Eighth Circuit and, even putting that tension

12

aside, in both of those cases,

13

the removability of the case was based on the substance of the
action. In seeking dismissal, the plaintiffs sought to modify that
substance in order to preclude a second removal. By contrast, the
purported removability of the present case was based on a
technicality. Plaintiff need not modify the substance of her action in
order to irrefutably preclude a second removal. This is an indication
that Defendants' right of removal, if any, was not as substantial as in
Thatcher and American National Bank.

14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

Id.
Second, the Eleventh Circuit assumed that the defendants’ snap removal was permissible
under the law but held that the
[d]efendants' right of removal, if any, was not at the core of what the
removal statute protects.
The forum-defendant rule clearly contemplates Plaintiff's ability to
defeat Defendants' purported right of removal in this case. It is
undisputed that if [the forum defendant] Reynolds had been served
before Fikes and Precoat removed this case, the forum-defendant
rule would have barred removal. The only reason this case is in
federal court is that the non-forum defendants accomplished a preservice removal by exploiting, first, Plaintiff's courtesy in sending
them copies of the complaint and, second, the state court's delay in
processing Plaintiff's diligent request for service. Defendants would
have us tie the district court's hands in the face of such
gamesmanship on the part of Defendants. Moreover, their
argument, if accepted, would turn the statute's "properly joined and
9

served" language on its head.

1

Congress added the "properly joined and served" language to the
statute in 1948. The published legislative history apparently
contains no explanation for this addition. Multiple courts, however,
have interpreted it as an effort to prevent gamesmanship by
plaintiffs. In the view of these courts, the purpose of the language is
"to prevent a plaintiff from blocking removal by joining as a
defendant a resident party against whom [the plaintiff] does not
intend to proceed, and whom [the plaintiff] does not even serve."
We find this interpretation persuasive. Because the likely purpose
of this language is to prevent gamesmanship by plaintiffs, moreover,
we cannot believe that it constrains the district court's discretion
under Rule 41(a)(2) to undo Defendants' gamesmanship in the
circumstances at bar.

2
3
4
5
6
7
8
9

Id. at 1221 (emphasis added).
Finally, the Eleventh Circuit noted that there was no indication that (1) the plaintiff had

10

United States District Court
Northern District of California

11

fraudulently joined the forum defendant5 or that (2) “Defendants suffered any prejudice form the

12

dismissal, other than the loss of their preferred federal forum.” Id. at 1222. Regarding the latter,

13

the court did not find that loss to be legal prejudice as “Defendants’ purported right to be in federal

14

court was based on a technicality; it was not at the core of what the removal statute protects.” Id.

15

Arguably, Goodwin is distinguishable on the basis that the Eleventh Circuit was not asked

16

to consider whether a plaintiff could “unilaterally orchestrate a ‘self-help’ remand,” Opp’n at 10

17

(emphasis in original) – i.e., in Goodwin, the plaintiff was moving for a voluntary dismissal, not

18

just filing a notice of voluntary dismissal. Although that is a distinction, it is not material to the

19

reasoning of the Eleventh Circuit. Accordingly, the authorities above all weigh in favor of Aetna

20

more than Defendants. As for the two main cases on which Defendants rely – Sorin, 2021 U.S.

21

Dist. LEXIS 225175, a district court decision from Pennsylvania, and Lou v. Belzberg, 834 F.2d

22

730 (9th Cir. 1987), a Ninth Circuit decision – both are distinguishable.
b.

23

Other Basis for Equitable Estoppel

24
25
26
27
28

5

It is worth noting than the jurisdictional inquiry into fraudulent joinder focuses on the objective
futility of the claim against the joined defendant, not the subjective motive of the plaintiff in
thwarting federal jurisdiction. See Selman v. Pfizer, Inc., No. 11-cv-1400-HU, 2011 U.S. Dist.
LEXIS 145019, at *18, 34 (D. Or. Dec. 16, 2011) (stating that “[t]The Ninth Circuit has never
strayed from the straightforward test set forth in McCabe” – i.e., “joinder is fraudulent if the
plaintiff ‘fails to state a cause of action against a resident defendant, and the failure is obvious
according to the settled rules of the state’”; adding that “other circuits have stated that a plaintiff's
motive has no bearing on a fraudulent joinder analysis”).
10

In Sorin, the plaintiffs had notified the defendants of a potential lawsuit in November

1
2

2019. The parties later entered into a tolling agreement. In October 2020, the plaintiffs

3

terminated the tolling agreement and filed suit against the defendants. The defendants promptly

4

removed before the plaintiffs were able to serve (i.e., the defendants snap removed). Shortly

5

thereafter, the plaintiffs filed a notice of voluntary dismissal. Because the defendants suspected

6

that the plaintiffs might try to refile and quickly serve the new complaint to prevent a second

7

removal, they began a process of searching the state court docket to look for a new filing. See

8

Sorin, 2021 U.S. Dist. LEXIS 225175, at *7-8. The plaintiffs then asked the defendants if they

9

would agree to a new tolling agreement. The defendants agreed and, in reliance on that agreement
– “which expressly barred plaintiffs from refiling suit” – the defendants “discontinued their

11

United States District Court
Northern District of California

10

docket-monitoring efforts.” Id. at *9. But “[u]nbeknownst to defendants, at the same time

12

plaintiffs were seeking to extend the tolling agreement, they were also attempting to refile their

13

lawsuit in state court.” Id. The plaintiffs managed to file the new lawsuit in state court and serve

14

the defendants before the defendants filed their notice of removal to federal court. See id. at *9-

15

10.
The plaintiffs moved the federal court for a remand. They invoked the forum defendant

16
17

rule as a basis to remand. The district court noted that the forum defendant was not jurisdictional

18

in nature and that there were various grounds for a court to decline to enforce the forum defendant

19

rule:

20

Relevant factors include the amount of time elapsed before a remand
motion is filed, whether the movant has made use of federal
processes or sought relief from the federal court before moving to
remand, and whether the movant has engaged in conduct or reaped
some benefit "which would make it inequitable to remand the case."

21
22
23

Id. at *15-16. The court then found that there were equitable circumstances that weighed against

24

removal.

25
26
27
28

Plaintiffs have had nearly a year to respond to defendants' claim that
plaintiffs breached the tolling agreement and commenced this
lawsuit in state court to avoid snap removal. . . . As it stands,
defendants' lead argument in favor of this court exercising
jurisdiction is entirely unopposed. The only conclusion to be
reached on this record is that plaintiffs engaged in Janus-faced
gamesmanship, contractually representing to defendants that no
11

lawsuit would be filed for at least another month, while preparing
and filing that lawsuit just three days later. The court will not
countenance such underhanded conduct by remanding the case to
state court.

1
2
3
4

Id. at *16-18 (emphasis added).
The case at hand is distinguishable from Sorin for several reasons. First, in Sorin, the

5

plaintiffs made an express promise that they would not file a lawsuit. Here, Aetna did not make

6

an express promise that it would not voluntarily dismiss Aetna I.

7

Second, Aetna did not make an implicit agreement not to voluntarily dismiss Aetna I.

8

Aetna’s statements that it would file a motion to remand in Aetna I (which it did) and that the

9

Court would need to adjudicate that motion (although it never did because of Aetna’s voluntary
dismissal) does not invariably imply that Aetna was thereby waiving its right to voluntarily

11

United States District Court
Northern District of California

10

dismiss. Motions to remand and voluntary dismissals are separate and distinct. In this regard, it is

12

notable that, in Wilson, the Ninth Circuit did not take issue with the plaintiffs’ voluntary dismissal

13

of their case even though that act took place after the lower court denied their motion to remand.

14

See Wilson, 111 F.3d at 694. Aetna could have dismissed after a remand decision was rendered –

15

with the same effect.

16

Third, Defendants cannot argue that Aetna’s same statements led them to reasonably rely

17

on Aetna not filing a voluntary dismissal. That argument runs up against Wilson. Furthermore,

18

Defendants could have filed answers to Aetna’s complaint – which would have barred any

19

voluntary dismissal by Aetna – without any detriment to their position opposing the motion to

20

remand.

21

Defendants protest that, on 1/27/2022 (i.e., just days before Aetna filed Aetna II), the

22

Individual Health Plan Plaintiffs (including Aetna) and Defendants filed a stipulation stating that

23

“Defendants shall have until 30 days after a ruling on Aetna’s motion [to remand in Aetna I], or

24

such other time as the parties may agree” to respond to the Aetna I complaint. Aetna I, No. C-21-

25

9827 EMC (Docket No. 16) (Stip. ¶ 6). But it appears that Defendants were the ones to propose

26

that specific term in the stipulation, not Aetna. See Sasse Reply Decl. ¶¶ 2-3 (testifying that

27

Defendants “emailed a preliminary draft of a stipulation . . . which included, among other things, a

28

proposed answer date of February 16, 2022 for all Individual Health Plan actions”; that Aetna told
12

1

Defendants that it would agree to be bound by the Staley orders only if its case was not remanded;

2

and that Defendants thereafter proposed a “separate date for responding to the Aetna Complaint”).

3

In any event, as Aetna points out, in Hamilton v. Shearson-Lehman American Express, Inc., 813

4

F.2d 1532 (9th Cir. 1987), the Ninth Circuit implicitly rejected the contention that the plaintiff

5

should be estopped “from employing notice dismissal” under Rule 41 simply because the parties

6

had stipulated that the defendants were not required to file an answer if a pending motion to

7

compel arbitration were granted. Id. at 1533, 1535.
This leaves Defendants with the Lou case which the Court previously considered when

9

Defendants moved to vacate Aetna’s voluntary dismissal in Aetna I. Lou does not provide any

10

real support to Defendants. There, the Ninth Circuit simply noted that, where a case has been

11

United States District Court
Northern District of California

8

removed from state to federal court, the federal court has the authority to enjoin the state court

12

action from proceeding. The Ninth Circuit noted that such action is permitted by the Anti-

13

Injunction Act because the statute provides that a federal court “‘may not grant an injunction to

14

stay proceedings in a State court except as expressly authorized by Act of Congress,’” Lou, 834

15

F.2d at 739 (quoting that Anti-Injunction Act, 28 U.S.C. § 2283; emphasis added), and the

16

removal statute, 28 U.S.C. § 1446(e), has “been construed as an express congressional

17

authorization to enjoin or stay the state court proceedings.” Id. at 740 (noting that § 1446(e)

18

provides that “‘the State court shall proceed no further unless and until the case is remanded’”).

19

Defendants, of course, point to the fact that the Ninth Circuit went on to consider what to

20

do when “a new action is filed in state court.” Id. The Ninth Circuit took note of a case where the

21

Fifth Circuit

22

26

state[d] that "where a district court finds that a second suit filed in
state court is an attempt to subvert the purposes of the removal
statute, it is justified and authorized by § 1446(e) in enjoining the
proceedings in the state court." It would be of little value to enjoin
continuance of a state case after removal and then permit the refiling
of essentially the same suit in state court. We agree with the Fifth
Circuit that where a second state court suit is fraudulently filed in an
attempt to subvert the removal of a prior case, a federal court may
enter an injunction.

27

Id. at 741. But Lou involved a situation where a federal suit obtained while an identical state suit

28

was filed. It did not address the situation where a plaintiff exercised its unilateral right to

23
24
25

13

1

voluntarily dismiss the first suit under Rule 41. See Marsoobian v. Transamerica Life Ins. Co.,

2

No. 1:16-cv-1412-LJO-MJS, 2016 U.S. Dist. LEXIS 170998, at *17 (E.D. Cal. Dec. 7, 2016)

3

(pointing out that Lou “dealt with the district court's power to enjoin duplicative, subsequent state

4

court proceedings that were initiated after the court declined to remand an original suit” and did

5

not “address[] extending jurisdiction from a dismissed prior suit to a second suit[;] Marsoobian I

6

was dismissed unilaterally by Plaintiffs under Rule 41(a)(1)(A)(i), which was their absolute and

7

unfettered right” which “immediately divested the Court of all jurisdiction over that action”).

8

C.

9

Federal Question Jurisdiction
Defendants argue that, even if the forum defendant rule is applicable, that would only

prevent removal based on diversity jurisdiction. Defendants assert federal question jurisdiction as

11

United States District Court
Northern District of California

10

an independent basis for removal. In the instant case, there is no dispute that Aetna pleads only

12

state law claims and no federal claims. However, in Grable & Sons Metal Products v. Darue

13

Engineering & Manufacturing, 545 U.S. 308 (2005), the Supreme Court held that a federal cause

14

of action is not required as a condition of exercising federal question jurisdiction. According to

15

Defendants, even though Aetna has not asserted any federal claims in its complaint, there is still

16

federal question jurisdiction under Grable.

17

1.

Grable Test

18

In Grable, the Supreme Court noted that, “for nearly 100 years,” it had recognized that, “in

19

certain cases federal-question jurisdiction will lie over state-law claims that implicate significant

20

federal issues” – which reflects “the commonsense notion that a federal court ought to be able to

21

hear claims recognized under state law that nonetheless turn on substantial questions of federal

22

law, and thus justify resort to the experience, solicitude, and hope of uniformity that a federal

23

forum offers on federal issues.” Id. at 312. The Supreme Court emphasized, however, that it was

24

not taking “the expansive view that mere need to apply federal law in a state-law claim will suffice

25

to open the ‘arising under’ door.” Id. at 313. “Instead, the question is, does a state-law claim

26

necessarily raise a stated federal issue, actually disputed and substantial, which a federal forum

27

may entertain without disturbing any congressionally approved balance of federal and state

28

judicial responsibilities.” Id. at 314.
14

1

In Grable itself, that test was satisfied. The plaintiff had owned certain real property that

2

the IRS seized to satisfy a tax delinquency. The defendant purchased the real property from the

3

IRS. The plaintiff subsequently filed suit in state court, claiming that the defendant’s “record title

4

was invalid because the IRS had failed to notify [the plaintiff] of its seizure of the property in the

5

exact manner required by [26 U.S.C.] § 6335.” Id. at 311. The defendant removed the case from

6

state to federal court, asserting federal question jurisdiction. The Supreme Court agreed that

7

federal question jurisdiction was proper.

8

[The plaintiff] Grable has premised its superior title claim on a
failure by the IRS to give it adequate notice, as defined by federal
law. Whether Grable was given notice within the meaning of the
federal statute is thus an essential element of its quiet title claim, and
the meaning of the federal statute is actually in dispute; it appears to
be the only legal or factual issue contested in the case. The meaning
of the federal tax provision is an important issue of federal law that
sensibly belongs in a federal court. The Government has a strong
interest in the "prompt and certain collection of delinquent taxes,"
and the ability of the IRS to satisfy its claims from the property of
delinquents requires clear terms of notice to allow buyers like [the
defendant] Darue to satisfy themselves that the Service has touched
the bases necessary for good title. The Government thus has a
direct interest in the availability of a federal forum to vindicate its
own administrative action, and buyers (as well as tax delinquents)
may find it valuable to come before judges used to federal tax
matters. Finally, because it will be the rare state title case that
raises a contested matter of federal law, federal jurisdiction to
resolve genuine disagreement over federal tax title provisions will
portend only a microscopic effect on the federal-state division of
labor.

9
10

United States District Court
Northern District of California

11
12
13
14
15
16
17
18
19
20

Id. at 314-15.
In contrast, the Supreme Court held that the Grable test had not been satisfied in Empire

21

HealthChoice Assurance, Inc. v. McVeigh, 547 U.S. 677 (2006). The plaintiff in Empire was a

22

local Blue Cross Blue Shield company. It had contracted with the federal government (OPM) to

23

provide a health care plan for federal employees. OPM was authorized to contract with the

24

plaintiff pursuant to the Federal Employees Health Benefits Act of 1959. See id. at 682.

25
26
27
28

The instant case originated when the administrator of a Plan
beneficiary's estate pursued tort litigation in state court against
parties alleged to have caused the beneficiary's injuries. The carrier
had notice of the state-court action, but took no part in it. When the
tort action terminated in a settlement, the carrier filed suit in federal
court seeking reimbursement of the full amount it had paid for the
beneficiary's medical care.
15

1
2

Id. at 683.
One of the arguments raised by the plaintiff was that federal question jurisdiction was

3

proper over its reimbursement claim under Grable. The Supreme Court rejected the contention. It

4

indicated first that Grable simply established a “special and small category” of cases over which

5

federal question jurisdiction was appropriate. Id. at 699. But

6
7
8
9
10

United States District Court
Northern District of California

11
12
13
14
15

[t]his case is poles apart from Grable. The dispute there centered on
the action of a federal agency (IRS) and its compatibility with a
federal statute, the question qualified as "substantial," and its
resolution was both dispositive of the case and would be controlling
in numerous other cases. Here, the reimbursement claim was
triggered, not by the action of any federal department, agency, or
service, but by the settlement of a personal-injury action launched in
state court, and the bottom-line practical issue is the share of that
settlement properly payable to [the plaintiff] Empire.
Grable presented a nearly "pure issue of law," one "that could be
settled once and for all and thereafter would govern numerous tax
sale cases." In contrast, Empire's reimbursement claim . . . is factbound and situation-specific. [The defendant] McVeigh contends
that there were overcharges or duplicative charges by care providers,
and seeks to determine whether particular services were properly
attributed to the injuries caused by the 1997 accident and not
rendered for a reason unrelated to the accident.

16

Id. at 700-01. The Court underscored that, under Grable, “it takes more than a federal element ‘to

17

open the “arising under” door,’” and “[t]his case cannot be squeezed into the slim category Grable

18

exemplifies.” Id. at 701.

19

Similarly, in Gunn v. Minton, 568 U.S. 251 (2013), the Supreme Court concluded that the

20

Grable test had not been satisfied. The plaintiff in Gunn filed a legal malpractice suit in state

21

court. According to the plaintiff, his former lawyers had committed malpractice while

22

representing him in a patent infringement suit – specifically, by failing to argue the experimental

23

use exception to the on-sale bar. (Because of the on-sale bar, the plaintiff’s patent had been

24

invalidated during the patent infringement proceedings.) See id. at 253-54. The plaintiff lost in

25

his malpractice suit. On appeal, the plaintiff raised a new argument:

26
27
28

Because this legal malpractice claim was based on an alleged error
in a patent case, it “aris[es] under” federal patent law for purposes of
28 U.S.C. § 133(a)[,] [a]nd because, under § 1338(a), “[n]o State
court shall have jurisdiction over any claim for relief arising under
any Act of Congress relating to patents,” the Texas court – where
16

[the plaintiff] Minton had originally brought his malpractice claim –
lacked subject matter jurisdiction to decide the case.

1
2
3

Id. at 255.
The Supreme Court held that, under Grable, federal jurisdiction was not proper. The Court

4

acknowledged first that “resolution of a federal patent question is ‘necessary’ to [the plaintiff]

5

Minton’s case” because, “[t]o prevail on his legal malpractice claim, . . . Minton must show that he

6

would have prevailed in his patent infringement case if only petitioners had timely made an

7

experimental-use argument on his behalf. This will necessarily require application of patent law

8

to the facts of Minton’s case.” Id. at 259. The Court then acknowledged that the federal issue was

9

“‘actually disputed’ . . . – indeed, on the merits, it is the central point of dispute.” Id. However,

10

United States District Court
Northern District of California

11
12
13
14
15
16

the Court concluded, the federal issue was “not substantial in the relevant sense.” Id. at 260.
The Texas Supreme Court had “focused on the importance of the issue to the plaintiff’s
case and to the parties before it” but,
[a]s our past cases show, . . . it is not enough that the federal issue be
significant to the particular parties in the immediate suit; that will
always be true when the state claim “necessarily raise[s]” a disputed
federal issue, as Grable separately requires. The substantiality
inquiry under Grable looks instead to the importance of the issue to
the federal system as a whole.

17

Id. (emphasis added). The Supreme Court underscored that a legal malpractice claim is

18

“backward-looking” in nature and poses a question

19
20
21
22

in a merely hypothetical sense: If Minton's lawyers had raised a
timely experimental-use argument, would the result in the patent
infringement proceeding have been different? No matter how the
state courts resolve that hypothetical “case within a case,” it will not
change the real-world result of the prior federal patent litigation.
Minton's patent will remain invalid.

23

Id. at 261 (emphasis in original). Thus, the federal issue in Gunn was not substantial. The Court

24

added that, “even assuming that a state court's case-within-a-case adjudication may be preclusive

25

under some circumstances, the result would be limited to the parties and patents that had been

26

before the state court.” Id. at 263 (citing Empire). There was no indication that the federal issue

27

was “significant to the federal system as a whole.” Id. at 264.

28

Finally, the Court held that, given its analysis on whether there was a substantial federal
17

1

issue, “Grable’s fourth element is also not met.” Id. “We have no reason to suppose that

2

Congress – in establishing exclusive federal jurisdiction over patent cases – meant to bar from

3

state courts state legal malpractice claims simply because they require resolution of a hypothetical

4

patent issue.” Id.

5

2.

6

As noted above, Grable establishes a “slim category” of cases in which federal jurisdiction

Balderas

7

is appropriate over state law claims. Empire, 547 U.S. at 701. Specifically, “federal jurisdiction

8

over a state law claim will lie if a federal issue is: (1) necessarily raised, (2) actually disputed, (3)

9

substantial, and (4) capable of resolution in federal court without disrupting the federal-state

10

United States District Court
Northern District of California

11

balance approved by Congress.” Gunn, 568 U.S. at 258.
In its papers, Aetna points out that a New Mexico district court has already considered

12

whether there is federal question jurisdiction under Grable in a case that is largely the same as that

13

brought by Aetna. See N.M. ex rel. Balderas v. Gilead Scis., Inc., 548 F. Supp. 3d 1098 (D.N.M.

14

2021). In Balderas, the state of New Mexico sued Gilead, BMS, and Teva based on, inter alia, (1)

15

reverse payment settlement agreements between Gilead and Teva, (2) a joint venture agreement

16

between Gilead and BMS related to the drug Atripla, and (3) Gilead’s delay in launching TAF, see

17

id. at 1101 – i.e., many of the same facts involved in the instant case. All of the causes of action

18

asserted by the state were predicated on state law (e.g., antitrust and consumer protection). The

19

state filed its action in state court, but the defendants removed to federal court. The state court

20

then moved for a remand, asserting lack of subject of matter jurisdiction.

21

The district court held that the Grable test had not been satisfied – primarily because

22

defendants did not establish that the state law claims at issue “necessarily raise[d] a stated federal

23

issue.” Id. at 1103 (emphasis added). The court took into account the defendants’ contention that

24

federal issues necessarily raised included “a determination of the strength and validity of [the

25

defendants’] patents, interpretation of the State’s Medicaid rebate agreements with the U.S.

26

Secretary of Health and Human Services, application of federal drug pricing laws, and proof that

27

the U.S. Food and Drug Administration . . . would have approved a new combination of

28

branded/generic drugs.” Id. But according to the court, “even though patent law, the FDA drug
18

1

approval process and federal Medicaid regulations loom in the background of all seven of the

2

State’s claims,” the claims “do not necessarily ‘turn’ on resolution of a federal question.” Id. at

3

1104. That is, the state could “establish the facts necessary for holding Defendants liable for

4

breaches of state law without forcing a court to interpret or even apply federal statutes or

5

regulations.”6 Id. at 1103.
The district court went on to question whether any federal issue – even if necessarily raised

6
7

and actually disputed – was substantial, although the court ultimately did not decide the matter.

8

See id. at 1106 (“[T]he Court is not convinced that either the overlap between this case and Staley

9

or New Mexico’s status as a government payor is significant enough to render the background
federal issues ‘substantial.’”). Similarly, the court “assume[d] without deciding that Defendants’

11

United States District Court
Northern District of California

10

claim of jurisdiction further falters at the final prong of the Grable . . . test: whether a federal court

12

could resolve the federal question without disrupting the federal-state balance approved by

13

Congress.” Id. at 1107. The court stated that “[t]he New Mexico state court in which this suit was

14

lodge[d] is competent to apply federal law, to the extent it is relevant, and would seem best

15

positioned to determine whether Defendants are liable under two of its state laws.” Id.
Balderas, of course, is not binding on this Court and the analysis therein should not serve

16
17

as a substitute for the Court’s own analysis; nevertheless, the case is noteworthy.

18

3.

Federal Issues

19

According to Defendants, Aetna’s state law claims necessarily raise substantial federal

20

issues related to (1) federal drug regulatory law, (2) federal patent law, and (3) federal antitrust

21

law. (The Court focuses on the “necessarily raise” and “substantial” requirements of the Grable

22
23
24
25
26
27
28

The New Mexico court’s understanding of “necessarily raised” is consistent with case law in the
Ninth Circuit. See Rains v. Criterion Sys., 80 F.3d 339, 346 (9th Cir. 1996) (“When a claim can
be supported by alternative and independent theories – one of which is a state law theory and one
of which is a federal law theory – federal question jurisdiction does not attach because federal law
is not a necessary element of the claim.”); Sangimino v. Bayer Corp., No. C 17-01488 WHA, 2017
U.S. Dist. LEXIS 89152, at *7 (N.D. Cal. June 9, 2017) (“Our court of appeals has made it clear
that where a complaint pleads alternative theories to support a claim – one federal and one statebased – it does not satisfy the ‘necessarily raised’ requirement of federal-question jurisdiction.”);
cf. Kripke v. Safeway, Inc., No. 3:18-cv-02808-WHO, 2018 U.S. Dist. LEXIS 121935, at *20-21
(N.D. Cal. July 20, 2018) (“If there is a question whether those state laws ‘can and do[] serve the
same purpose’ as the federal laws [the plaintiff] relies on, that does not alter the conclusion that his
claims ‘can be supported by an independent state theory . . . .’”).
19
6

1

test as they are the most significant with respect to resolution of this matter before the Court.)
a.

2

Federal Drug Regulatory Law

In their opposition, Defendants point out that the claims based on the patent settlement

3
4

agreements between Gilead and Teva are based on allegations that the companies “tried to ‘game’

5

the federal drug-regulatory system” – e.g., with the Atripla/Truvada settlement agreement, the

6

companies tried to restore Teva’s forfeiture of its 180-day first-filer exclusivity. Opp’n at 14. It is

7

questionable whether Aetna has necessarily raised a federal issue here. For example, there is no

8

suggestion that federal law is an element of the claims based on the settlement agreements.

9

Compare Grable, 545 U.S. at 315 (noting that “[w]hether [the plaintiff] Grable was give notice
within the meaning of the federal [tax] statute is . . . an essential element of its quiet title claim”);

11

United States District Court
Northern District of California

10

see also Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Manning, 578 U.S. 374, 384 (2016)

12

(noting that Grable “typically fits cases . . . in which a state-law cause of action is ‘brought to

13

enforce’ a duty created by the Exchange Act because the claim’s very success depends on giving

14

effect to a federal requirement”); Franchise Tax Bd. v. Constr. Laborers Vacation Tr., 463 U.S. 1,

15

9 (1983) (stating that “[w]e have often held that a case ‘arose under’ federal law where the

16

vindication of a right under state law necessarily turned on some construction of federal law”).

17

The mere fact that Aetna charges the companies with trying to set up a structure that would

18

emulate first-filer exclusivity does not mean that first-filer exclusivity is itself an element of any

19

claim.

20

Defendants have a better argument that Aetna has necessarily raised a federal issue

21

because all of its the claims, including but not limited to those based on the No-Generic Restraints

22

(“NGRs”), are based on allegations that generic versions of the drugs would have launched earlier

23

but for the alleged unlawful conduct: “[P]roving whether and when competing generics could have

24

obtained final FDA approval requires the interpretation and application of federal law.” Opp’n at

25

14-15. Here, Aetna has arguably raised a federal issue, and necessarily so. A major predicate of

26

Aetna’s suit is that generics would have launched earlier.

27

That being said, even if Aetna has necessarily raised federal issues related to federal drug

28

regulatory law, the federal issues cannot be characterized as substantial. Defendants contend that
20

there is substantiality because “the federal drug-regulatory, patent, and antitrust questions are

2

being litigated in nearly identical nationwide class actions and opt-out actions in this Court by

3

various plaintiff groups.” Opp’n at 20. But just because other cases exist that involve similar

4

issues is not dispositive. The question is whether there is a “nearly ‘pure issue of law,’ one ‘that

5

could be settled once and for all and thereafter would govern numerous [other] cases.” Empire,

6

547 U.S. at 700 (emphasis added). Here, there is no pure issue of law or nearly pure issue of law.

7

There is no key question regarding the interpretation of federal law. Rather, the claims related to

8

the settlement agreements are “fact bound and situation specific” – asking the Court to consider

9

the specific settlement agreements negotiated between Gilead and Teva. Id. at 701; see also City

10

of Oakland v. BP Pub. Ltd. Co., 969 F.3d 895, 906-07 (9th Cir. 2020) (asking whether there is a

11

United States District Court
Northern District of California

1

“‘context-free inquiry into the meaning of a federal law’”).

12

Defendants also suggest that there is a substantial federal issue here because “the

13

Complaint seeks broad injunctive relief and compulsory licenses for the patents at issue and

14

allegedly ongoing conduct.” Opp’n at 21. But in Gunn, the Supreme Court emphasized that

15

“[t]he substantiality inquiry under Grable” does not look to the “significan[ce] to the particular

16

parties in the immediate suit” but rather “to the importance of the issue to the federal system as a

17

whole.” Gunn, 568 U.S. at 260 (emphasis added). As the Gunn Court pointed out, this was

18

satisfied in Grable because there was “broader significance” with respect to

19
20
21

the notice question for the Federal Government. We emphasized the
Government's “strong interest” in being able to recover delinquent
taxes through seizure and sale of property, which in turn “require[d]
clear terms of notice to allow buyers . . . to satisfy themselves that
the Service has touched the bases necessary for good title.”

22

Id. at 260. Similarly, there was broader significance in Smith v. Kansas City Title & Trust Co.,

23

255 U.S. 180 (1921).

24
25
26
27
28

In Smith, the plaintiff argued that the defendant bank could not
purchase certain bonds issued by the Federal Government because
the Government had acted unconstitutionally in issuing them. We
held that the case arose under federal law, because the “decision
depends upon the determination” of “the constitutional validity of an
act of Congress which is directly drawn in question.” Again, the
relevant point was not the importance of the question to the parties
alone but rather the importance more generally of a determination
that the Government “securities were issued under an
21

unconstitutional law, and hence of no validity.”

1
2

Gunn, 568 U.S. at 261. In the instant case, there is no comparable significance. The

3

constitutionality of a federal law is not at issue. Nor have Defendants identified any requirement

4

here of an interpretation of federal law that has broad consequences important to “the federal

5

system as a whole.”
b.

6
7

Federal Patent Law

In their opposition brief, Defendants point to allegations in the complaint that Gilead knew
its “patents were weak and likely to be invalidated,” Compl. ¶ 116; see also Compl. ¶ 160

9

(similarly alleging that BMS knew certain of its “patents were weak and likely to be invalidated”)

10

– and thus expected that it would lose the patent infringement suits brought against Teva and other

11

United States District Court
Northern District of California

8

generic manufacturers, which, in turn, would lead to early generic entry into the market. See

12

Compl. ¶ 175. According to Defendants, at the very least, Aetna’s claims based on the settlement

13

agreements with Teva necessarily raise a federal issue – i.e., validity of Gilead’s patents: “The

14

Complaint’s sole theory of causation for its patent settlement claims is that but for the settlement

15

of patent litigations . . . , Teva would have prevailed, leading to earlier generic competition.”

16

Opp’n at 16.

17

As an initial matter, the Court questions whether it would be required to adjudicate the

18

validity of the patents per se. Actual invalidity (as opposed to the likelihood of invalidity) may

19

not require adjudication. But even if Defendants were correct, they would still encounter the same

20

obstacle as above. That is, even if Aetna has necessarily raised a federal issue here, it is not

21

substantial as that requirement has been framed by the Supreme Court, particularly in Gunn.

22

There is, for instance, no novel issue of patent law that will need to be decided in this litigation.

23

Rather, Defendants simply make the same problematic arguments on substantiality that the Court

24

rejected above.

25

Finally, as Aetna points out in its papers, in Gunn, the Supreme Court noted that the

26

plaintiff’s legal malpractice claim was “backward looking” and posed a question

27

in a merely hypothetical sense: If Minton's lawyers had raised a
timely experimental-use argument, would the result in the patent
infringement proceeding have been different? No matter how the

28

22

state courts resolve that hypothetical “case within a case,” it will not
change the real-world result of the prior federal patent litigation.
Minton's patent will remain invalid.

1
2
3

Gunn, 568 U.S. at 261 (emphasis in original). Here, Aetna fairly contends that the patent validity

4

issue in the case at bar would be similarly backward looking and hypothetical, and thus

5

substantiality would be lacking. There would no real world impact as a result of looking at the

6

validity (or, more accurately, probable invalidity) of the main Gilead patents (related to TDF and

7

FTC) because the patents at issue “have all since expired.” Mot. at 13.
c.

8

Federal Antitrust Law

Finally, Defendants contend that Aetna’s case necessarily raises a federal issue because at

9

least part of the California antitrust claim is actually a federal claim: “[T]he Complaint asserts

11

United States District Court
Northern District of California

10

unilateral monopolization and attempted monopolization claims, supposedly under California’s

12

Cartwright Act[,] [b]ut ‘[a]n alleged unilateral attempt to establish a monopoly is not cognizable

13

under the Cartwright Act’ [and] must be asserted under the federal Sherman Act.” Opp’n at 18.

14

This argument lacks merit. Aetna’s complaint makes clear that its monopolization claims are

15

based on concerted, and not unilateral, conduct. See Dimidowich v. Bell & Howell, 803 F.2d

16

1473, 1478 (9th Cir. 1986) (stating that “[c]ombinations to monopolize would appear to fall within

17

the general prohibitions of the Cartwright Act, but [the] statute does not address unilateral

18

conduct”) (emphasis in original). See, e.g., Compl. ¶ 430 (in Count V, claim for monopolization

19

and monopolistic scheme in violation of the Cartwright Act, alleging that “Gilead, acting

20

individually and with other defendants and co-conspirators, willfully obtained and maintained its

21

monopoly power in the cART market and narrower markets therein using restrictive or

22

exclusionary conduct”); Compl. ¶ 460 (in Count VII, claims for attempted monopolization in

23

violation of the Cartwright Act, alleging that “Gilead, acting individually and in concert with other

24

defendants and co-conspirators, knowingly, willfully, and wrongfully attempted to acquire and/or

25

maintain monopoly power”).

26

D.

27
28

Cross-Motion for Permanent Injunction
For the foregoing reasons, the Court grants Aetna’s the motion to remand. The forum

defendant rule does apply (e.g., Aetna is not estopped from relying on the rule), and the Grable
23

1

test for federal question jurisdiction has not been satisfied.
As a last-ditch effort, Defendants argue that, if the Court grants the motion to remand, it

2
3

should still enjoin Aetna from prosecuting its case in the state court. See Opp’n at 21; Cross-Mot.

4

at 1. This makes little sense. Because the Court concludes that Aetna acted within its rights in

5

voluntarily dismissing Aetna I – even if that involved gamesmanship – then there is no basis to

6

enjoin Aetna from prosecuting Aetna II in state court. Defendants’ reliance on Lou is of no

7

assistance because, there, there was a pending federal action which was the predicate for decision

8

to enjoin the state court action. Here, the Court is remanding Aetna II; thus, there is no pending

9

federal action and thus no federal predicate upon which to base any injunction.
III.

10

Aetna’s motion to remand is granted, and Defendants’ cross-motion for an injunction is

United States District Court
Northern District of California

11
12
13

CONCLUSION

denied.
This order disposes of Docket Nos. 18 and 26.

14
15

IT IS SO ORDERED.

16
17

Dated: April 20, 2022

18
19
20

______________________________________
EDWARD M. CHEN
United States District Judge

21
22
23
24
25
26
27
28
24