Anne Arundel County, Maryland v. Purdue Pharma L.P. et al

Filing 57

MEMORANDUM OPINION. Signed by Judge George Levi Russell, III on 4/25/2018. (hmls, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
ANNE ARUNDEL COUNTY,
MARYLAND,

:
:

Plaintiff,
v.

:

PURDUE PHARMA L.P., et al.,

:

Defendants.

Civil Action No. GLR-18-519

:
MEMORANDUM OPINION

THIS MATTER is before the Court on Plaintiff Anne Arundel County,
Maryland’s (the “County”) Motion for Remand (ECF No. 10). The Motion is ripe for
disposition, and no hearing is necessary. See Local Rule 105.6 (D.Md. 2016). For the
reasons outlined below, the Court will grant the Motion.1
I.

BACKGROUND

Anne Arundel County is the fifth most populous county in Maryland.
(Compl. ¶ 31, ECF No. 2).

The County provides many services for its residents,

including public health, public assistance, law enforcement, emergency care, and services
for family and children. (Id.). The County also funds health insurance and workers’

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Also pending before the Court are the County’s Motion for Protective Order
(ECF No. 30), Defendants Jackie Syme, MD’s and Arundel Neurology’s Motion to
Dismiss Pursuant to Fed. R. Civ. P. 21 (ECF No. 37), Defendant Minnie Ndem, NP’s
Motion to Dismiss for Failure to File in the Health Care Alternative Dispute Resolution
Office (ECF No. 50), and Defendant Happiness Aguzie’s Motion to Dismiss (ECF No.
51). Because the Court will remand this case to state court, the Court will deny these
Motions as moot.

compensation claims for its employees. (Id.). For the purposes of this action, the County
is a citizen of Maryland. (See id. ¶¶ 29–32).
Defendants Purdue Pharma L.P., Purdue Pharma, Inc., The Purdue Frederick
Company, Inc., Teva Pharmaceuticals USA, Inc., Cephalon, Inc., Johnson & Johnson,
Janssen Pharmaceuticals, Inc., Ortho-McNeil-Janssen Pharmaceuticals, Inc., Endo Health
Solutions, Inc., and Endo Pharmaceuticals, Inc. (collectively, the “Manufacturer
Defendants”) and Insys Therapeutics, Inc. (“Insys”) manufacture, market, and sell
prescription opioid pain medications. (Id. ¶ 2). Manufacturer Defendants and Insys are
not citizens of Maryland. (Id. ¶¶ 33–41).
Defendants

Cardinal

Health,

Inc.,

McKesson

Corporation,

and

AmerisourceBergen Drug Corporation (collectively, the “Distributor Defendants”)
distribute opioid medications to pharmacies, pain clinics, and other dispensaries across
the country, including the County. (Id. ¶ 3). Each Distributor Defendant is not a citizen
of Maryland. (Id. ¶¶ 42–45).
Defendants William Tham, M.D., Physical Medicine and Pain Management
Associates, P.C., Kofi Shaw-Taylor, Happiness Aguzie, Tormarco Harris, Minnie Ndem,
Starlife Wellness Center LLC, Lawrence Vidaver, M.D., Maryland Healing Waters, LLC,
Jackie Syme, M.D., and Arundel Neurology (collectively, the “Prescriber Defendants”)
are healthcare providers in the County and the medical practices where the alleged overprescribing of opiates occurred. (Id. ¶ 4). Each Prescriber Defendant is a citizen of
Maryland. (Id. ¶¶ 47–57, 62).

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The County filed the present action in the Circuit Court for Anne Arundel County,
Maryland on January 3, 2018. (ECF No. 2). In its eight-count Complaint, the County
alleges: (1) public nuisance against all Defendants (Count I); (2) violation of the
Maryland False Claims Act, Md. Code Ann., Gen. Prov. §§ 8-101 et seq. (West 2018),
against Manufacturer Defendants, Insys, and Prescriber Defendants (Count II); (3)
violation of the Maryland Consumer Protection Act, Md. Code Ann., Com. Law §§ 13101 et seq. (West 2018), against Manufacturer Defendants and Insys (Count III); (4)
fraudulent misrepresentation against Manufacturer Defendants and Insys (Count IV); (5)
negligent misrepresentation against Manufacturer Defendants and Insys (Count V); (6)
negligence against Manufacturer Defendants, Insys, and Distributor Defendants (Count
VI); (7) gross negligence against Manufacturer Defendants, Insys, and Distributor
Defendants (Count VII); and (8) unjust enrichment against all Defendants (Count VIII).
(Compl. ¶¶ 321–421). The County seeks injunctive and monetary relief. (Id. ¶¶ a–m).
The thrust of the County’s Complaint is that the Manufacturer Defendants and
Insys fraudulently marketed and promoted opioids, the Prescriber Defendants
fraudulently over-prescribed opioids, and the Distributor Defendants failed to limit
fraudulent or suspicious distribution of opioids, causing widespread opioid use and
exacting a high monetary cost to the County. (See id. ¶¶ 1–28). This action is one of
hundreds of lawsuits filed against manufacturers, distributors, and prescribers of opioid
products on behalf of state and local governments related to alleged harms stemming

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from opioid abuse. See Feb. 28, 2018 Cond’l Trans. Order (CTO-13) [“CTO-13”], In re
Nat’l Prescription Opiate Litig. (MDL 2804), MDL No. 2804 (J.P.M.L.), ECF No. 798.2
On December 5, 2017, before the County initiated this lawsuit, the United States
Judicial Panel on Multidistrict Litigation (“JPML”) created a Multidistrict Litigation
(“MDL”) in the United States District Court for the Northern District of Ohio (the “MDL
Court”) to manage all federal cases in which “cities, counties, and states . . . allege that:
(1) manufacturers of prescription opioid medications overstated the benefits and
downplayed the risks of the use of their opioids and aggressively marketed . . . these
drugs to physicians, and/or (2) distributors failed to monitor . . . and report suspicious
orders of prescription opiates.” Dec. 5, 2017 Trans. Order at 3, MDL 2804, ECF No.
328.
On February 28, 2018, the JPML conditionally transferred this action to the MDL
Court. CTO-13, MDL 2804, ECF No. 798. On March 7, 2018, the County filed a Notice
of Opposition to the Conditional Transfer Order. Notice Opp’n Cond’l Trans. Order
(CTO-13), MDL 2804, ECF No. 866.

The County filed a Motion to Vacate the

Conditional Transfer Order on March 22, 2018. Pl.’s Mot. Vacate Cond’l Trans. Order
(CTO-13), MDL 2804, ECF No. 1005. The Manufacturer Defendants filed a Response in
Opposition on April 12, 2018. Defs.’ Joint Opp’n Pl.’s Mot. Vacate CTO-13, MDL
2804, ECF No. 1191. The County filed a Reply on April 18, 2018. Pl.’s Reply Br. Supp.
Mot. Vacate CTO-13, MDL 2804, ECF No. 1242.

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The Court includes the ECF numbers for the filings in MDL 2804 for ease of
reference.
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Defendants Endo Health Solutions Inc. and Endo Pharmaceuticals Inc.
(collectively, “Endo”) filed a Notice of Removal from the Circuit Court to the United
States District Court for the District of Maryland on February 20, 2018. (ECF No. 1).
On February 26, 2018, the County filed a Motion for Remand. (ECF No. 10). Endo filed
an Opposition on March 12, 2018. (ECF No. 31). The County filed a Reply on March
22, 2018. (ECF No. 38).
II.
A.

DISCUSSION

Standard of Review
The party seeking removal carries the burden of establishing federal jurisdiction.

Mulcahey v. Columbia Organic Chems. Co., 29 F.3d 148, 151 (4th Cir. 1994) (citing
Wilson v. Republic Iron & Steel Co., 257 U.S. 92 (1921)). The Court must strictly
construe removal jurisdiction because removal jurisdiction “raises significant federalism
concerns.” Id. (citing Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (1941)).
Accordingly, if federal jurisdiction is doubtful, the Court should grant a motion to
remand. Id. (citing In re Bus. Men’s Assur. Co. of Am., 992 F.2d 181, 183 (8th Cir.
1993); then citing Cheshire v. Coca-Cola Bottling Affiliated, Inc., 758 F.Supp. 1098,
1102 (D.S.C. 1990)).
A defendant may remove a state court action to federal court if the federal court
would have original jurisdiction over the action. 28 U.S.C. § 1441(a) (2018). Federal
district courts have original jurisdiction over civil actions that arise under federal law, 28
U.S.C. § 1331 (2018), or have an amount in controversy exceeding $75,000, exclusive of
interests and costs, and complete diversity of citizenship, 28 U.S.C. § 1332(a) (2018). If
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a civil action is not based on a question of federal law, then a federal court may only
exercise original jurisdiction based on diversity of citizenship.
The purpose of the diversity requirement “is to provide a federal forum for
important disputes where state courts might favor, or be perceived as favoring, homestate litigants.” Exxon Mobil Corp. v. Allapattah Servs., 545 U.S. 546, 553–54 (2005).
As the U.S. Supreme Court has explained, “[t]he presence of parties from the same State
on both sides of a case dispels this concern, eliminating a principal reason for
conferring § 1332 jurisdiction over any of the claims in the action.” Incomplete diversity,
however, “destroys original jurisdiction with respect to all claims.” Id. at 554.
B.

Analysis
Endo urges the Court to deny the County’s Motion for Remand as to the

Manufacturer and Distributor Defendants. As a preliminary matter, Endo maintains that
the Court should defer its ruling on the Motion to permit the MDL Court to resolve all
pending motions to remand collectively. Alternatively, Endo contends that the Court has
diversity jurisdiction over this action because the Court can sever the Prescriber
Defendants under Federal Rule of Civil Procedure 21 or apply the fraudulent misjoinder
doctrine. The Court begins by discussing whether it must defer to the MDL Court.
1.

Deference to MDL Court

Endo argues that the Court should stay its ruling on the County’s Motion for
Remand to permit the MDL Court to resolve all pending remand motions in MDL 2804
collectively. The County contends that the Court should rule on its Motion expeditiously

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because this case does not belong in federal court and, therefore, should not be
transferred to the MDL. The Court agrees with the County.
This Court has the authority to rule on pending motions any time before the JPML
issues a transfer order. Stephens v. Kaiser Found. Health Plan of the Mid-Atl. States,
Inc., 807 F.Supp.2d 375, 381 (D.Md. 2011) (quoting Moore v. Wyeth–Ayerst Labs., 236
F.Supp.2d 509, 511 (D.Md. 2002)). Additionally, the Rules of Procedure of the United
States Judicial Panel on Multidistrict Litigation expressly provide that a conditional
transfer order “does not affect or suspend orders and pretrial proceedings in any pending
federal district court action and does not limit the pretrial jurisdiction of that court.”
R.Proc.J.P.M.L. 2.1(d). Motions to remand are particularly appropriate for resolution by
this Court because “if this Court does not have jurisdiction over th[e] matter, then neither
will the MDL court.” Stephens, 807 F.Supp.2d at 381; see also Manual for Complex
Litigation § 20.131 (4th ed. 2004) (noting that motions to remand are “particularly
appropriate for resolution before the [JPML] acts” because the right to litigate in the
MDL depends on the existence of federal jurisdiction in the first place).
Consistent with this principle, several federal district courts have granted motions
to remand before the JPML could transfer the cases to the MDL Court. See, e.g., Estate
of Brockel v. Purdue Pharma L.P., et al., 1:17-cv-00521-KU-MU, slip op. at 1 (S.D.Ala.
Mar. 29, 2018); Cty. of Falls v. Purdue Pharma L.P., et al., 6:18-cv-00047-RP-JCM, slip
op. at 7 (W.D.Tex. Mar. 28, 2018); Cty. of Delta v. Purdue Pharma L.P., et al., 4:18-cv00095-ALM, slip op. at 9 (E.D.Tex. Mar. 22, 2018); Cty. of Dallas v. Purdue Pharma
L.P., et al., 3:18-cv-00426-M, slip op. at 7 (N.D.Tex. Mar. 7, 2018); Brooke Cty.
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Comm’n, et al. v. Purdue Pharma L.P., et al., 5:18-cv-00009, slip op. at 17 (N.D.W.Va.
Feb. 23, 2018) (granting Motions to Remand in eight cases brought by counties in West
Virginia); New Hampshire v. Purdue Pharma, et al., 1:17-cv-00427-PB, slip op. at 11
(D.N.H. Jan. 9, 2018); Cty. of Hopkins v. Endo Health Solutions Inc., et al., 4:17-cv00845-ALM, slip op. at 2 (E.D.Tex. Dec. 20, 2017); Staubus v. Purdue Pharma, L.P., et
al., 2:17-cv-122-TAV-CLC, 2017 WL 4767688, at *8 (E.D.Tenn. Oct. 20, 2017). But
see St. Bernard Parish Gov’t v. Purdue Pharma LP, et al., 2:18-cv-02717-NJB-DEK, slip
op. at 6 (E.D.La. Mar. 29, 2018) (granting a stay pending a decision on the transfer to the
MDL Court); Cty. of Floyd v. Purdue Pharma L.P., et al., No. 7:17-cv-00186-GFVT, slip
op. at 4 (E.D.Ky. Jan. 22, 2018) (staying case and deferring its decision on plaintiff’s
motion to remand pending decision on transfer to the MDL Court).
Here, the JPML has yet to issue an order transferring this case to the MDL Court.
Additionally, the existing conditional transfer order does not limit this Court’s
jurisdiction to rule on pending motions. See R.Proc.J.P.M.L. 2.1(d). Because motions to
remand are particularly appropriate for resolution before transfer to the MDL, the Court
is well within its authority to rule on the County’s Motion for Remand at this time. See
Stephens, 807 F.Supp.2d at 381.
Accordingly, the Court next considers the merits of the County’s Motion for
Remand.
2.

Motion for Remand

Where, as here, the removing party invokes diversity jurisdiction, it is that party’s
burden to demonstrate that diversity is “complete”—in other words, that no defendant in
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the case is a citizen of the same state as any plaintiff. See Mulcahey, 29 F.3d at 151
(citing Wilson, 257 U.S. 92); see also Cent. W.Va. Energy Co. v. Mountain State Carbon,
LLC, 636 F.3d 101, 103 (4th Cir. 2011).
In the present case, diversity is incomplete on the face of the Complaint because
the County and Prescriber Defendants are all citizens of Maryland. Nonetheless, Endo
urges the Court to deny the County’s Motion for Remand for two reasons. First, Endo
maintains that the Prescriber Defendants are severable under Rule 21 because they are
unnecessary and dispensable parties. Second, Endo contends that the Court may ignore
the citizenship of the Prescriber Defendants under the fraudulent misjoinder doctrine.
The Court considers these arguments in turn.
i.

Rule 21 Severability

At bottom, the Court concludes that the Prescriber Defendants are not severable
under Rule 21 because they are necessary and dispensable parties.
Rule 21 grants the Court discretion to sever nondiverse parties to achieve complete
diversity. See Koehler v. Dodwell, 152 F.3d 304, 308 (4th Cir. 1998). To do so, the
Court must consider whether dismissal of the nondiverse party or parties will prejudice
any of the parties remaining in the case, and whether the presence of the nondiverse party
provides a tactical advantage for one party. Newman-Green, Inc. v. Alfonzo-Larrain, 490
U.S. 826, 838 (1989). Additionally, the Court must evaluate whether a party is necessary
and indispensable under Rule 19. Sullivan v. Calvert Mem’l Hosp., 117 F.Supp.3d 702,
705 (D.Md. 2015). A party is necessary if:

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the court cannot accord complete relief among existing
parties; [ ] or that person claims an interest relating to the
subject of the action and is so situated that disposing of the
action in the person’s absence may: (i) as a practical matter
impair or impede the person’s ability to protect the interest; or
(ii) leave an existing party subject to a substantial risk of
incurring double, multiple, or otherwise inconsistent
obligations because of the interest.
Fed.R.Civ.P. 19(a)(1). Further, a necessary party is indispensable if the action cannot
proceed without that party “in equity and good conscience.” Sullivan, 117 F.Supp.3d at
705 (quoting Fed.R.Civ.P. 19(b)). If a nondiverse party is necessary and indispensable
under Rule 19, then “diversity remains incomplete and the case must be remanded to
state court.” Id.
In Sullivan, the plaintiff asserted medical negligence claims against her healthcare
providers and products liability claims against a medical device manufacturer in the same
action. Id. at 703–04. On defendants’ motions to sever, the plaintiff argued that the
healthcare providers were necessary parties to her claims against the manufacturer
because each set of defendants could blame plaintiff’s injuries on the other if the cases
were tried separately. Id. at 705. The Court disagreed, finding that the healthcare
providers were not necessary parties because “the medical negligence claims . . . involve
legal standards and factual inquiries distinctly different from the products liability claims
against the [manufacturer of the device].” Id. at 706. The Court further reasoned that
resolution of plaintiff’s medical negligence claim would not necessarily resolve her
products liability claim. Id. The Court explained that the medical negligence claims
“hinge on whether [the healthcare providers] deviated from the standard of care” while
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the products liability claims turn on whether the manufacturer “at an earlier point in time,
improperly designed, manufactured, tested, advertised, and gave directions regarding use
of the [device].” Id. at 707. The Court, therefore, exercised its discretion to sever and
remanded the claims against the healthcare providers to state court. Id. at 707–08.
Here, by contrast, the County’s claims against the Prescriber Defendants are
factually and legally intertwined with its claims against the Manufacturer and Distributor
Defendants. First, the County brings a public nuisance claim against all Defendants.
Specifically, the County alleges that the Manufacturer and Distributor Defendants
contributed to the public nuisance by neglecting to investigate, report, or terminate
suspicious orders from the Prescriber Defendants named in the Complaint.
(Compl. ¶¶ 206, 214, 223, 231, 232, 329). Unlike Sullivan, the County’s public nuisance
claim involves the same factual inquiry for the Prescriber Defendants as for the
Manufacturer and Distributor Defendants. The County also alleges, among other things,
that the Manufacturer Defendants and Insys violated the Maryland False Claims Act by
paying Prescriber Defendant Tham kickbacks to write medically unnecessary opioid
prescriptions. (Id. ¶¶ 199–206, 333–48). Facts regarding the role of Tham in this alleged
scheme are thus relevant to establishing the County’s claims against the Manufacturer
Defendants and Insys. Put simply, the County’s claims against the Prescriber Defendants
do not “involve legal standards and factual inquiries distinctly different” from its claims
against the Manufacturer and Distributor Defendants. Sullivan, 117 F.Supp.3d at 706.
Because the County’s claims against the Prescriber Defendants are factually and
legally intertwined with its claims against the Manufacturer and Distributor Defendants,
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the Court concludes that the Prescriber Defendants are necessary and indispensable under
Rule 19. Thus, the Prescriber Defendants are not severable under Rule 21. The Court,
therefore, will not sever the Prescriber Defendants to create complete diversity among the
parties.
The Court next turns to whether complete diversity is achieved under the
fraudulent misjoinder doctrine.
ii.

Fraudulent Misjoinder

Endo urges the Court to apply the fraudulent misjoinder doctrine to ignore the
citizenship of the nondiverse Prescriber Defendants in this action. The County contends
that the United States Court of Appeals for the Fourth Circuit has yet to adopt the
fraudulent misjoinder doctrine and, in any event, the Prescriber Defendants are not
fraudulently misjoined. The Court agrees with the County.
Fraudulent misjoinder “is an assertion that claims against certain defendants, while
provable, have no real connection to the claims against other defendants in the same
action and were only included in order to defeat diversity jurisdiction and removal.”
Stephens, 807 F.Supp.2d at 379 (quoting Wyatt v. Charleston Area Med. Ctr., Inc., 651
F.Supp.2d 492, 496 (S.D.W.Va. 2009)). The Fourth Circuit has neither adopted nor
rejected the fraudulent misjoinder doctrine, and our sister district courts are split on the
issue. Cty. Comm’n of McDowell Cty. v. McKesson Corp., 263 F.Supp.3d 639, 645
(S.D.W.Va. 2017).
Nonetheless, this Court applied the fraudulent misjoinder doctrine in Stephens.
807 F.Supp.2d 375 at 381–85. In doing so, the Court concluded that the relevant inquiry
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is whether a plaintiff has satisfied the requirements of Rule 20(a), which governs
permissive joinder of claims. Id. at 381. Rule 20(a) permits a plaintiff to join parties in a
single action if: (1) a right to relief is asserted against the defendants with respect to or
arising out of the same transaction, occurrence, or series of transactions or occurrences;
and (2) a common question of law or fact will arise in the action. Id. For the first prong
of Rule 20(a), courts generally construe this requirement liberally and conclude that
claims arise from the “same transaction or occurrence” if they have a “logical
relationship” to one another. Id. at 382. As to the second prong, joinder is permitted
“wherever there will be at least one common question of law or fact.” Id. at 384 (citing 7
Arthur R. Miller, Edward H. Cooper & Joan E. Steinman, Federal Practice and
Procedure § 1653 (4th ed. 2009)).

Further, “the transaction and common-question

requirements prescribed by Rule 20(a) are not rigid tests.

They are flexible

concepts . . . and therefore are to be read as broadly as possible . . . to promote judicial
economy.” Id. (first alteration in original) (Miller, Cooper & Steinman, supra, § 1653).
Applying the first prong of Rule 20(a) to the present case, it is clear that the
County’s claims against the Prescriber Defendants are logically related to its claims
against the Manufacturer and Distributor Defendants. First, as discussed above, the
County brings a public nuisance claim against all Defendants. The County alleges,
among other things, that the Manufacturer and Distributor Defendants created a public
nuisance by failing to identify and report suspicious behavior by the Prescriber
Defendants. (Compl. ¶ 329). The County also alleges that the Manufacturer Defendants,
Insys, and the Prescriber Defendants made material representations about prescription
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opioids in violation of the Maryland False Claims Act. (Id. ¶¶ 333–48). Because the
County’s claims against the Prescriber Defendants are logically related to its claims
against the Manufacturer and Distributor Defendants, the Court concludes that the claims
arise from the “same transaction or occurrence.” Stephens, 807 F.Supp.2d at 384.
As to the second prong, the County’s allegations against the Prescriber Defendants
and the Manufacturer and Distributor Defendants raise at least one common question of
law or fact. For example, the issue of whether the Prescriber Defendants, Manufacturer
Defendants, and Insys violated the Maryland False Claims Act turns, in part, on whether
Defendants “conspired to cause . . . false or fraudulent claims and statements to be made
to the County.” (Compl. ¶ 336). The County’s claim, therefore, raises at least one
common question of law and fact. Stephens, 807 F.Supp.2d at 384–85. Because both
prongs of Rule 20(a) are satisfied, the Court concludes that the Prescriber Defendants are
not fraudulently misjoined. Id. at 385.
In sum, the Prescriber Defendants are not severable under Rule 21 and are
properly joined. The Court, therefore, will not sever the Prescriber Defendants or ignore
their citizenship to create complete diversity among the parties. Because there is not
complete diversity among the parties, the Court does not have subject matter jurisdiction
over this action. Accordingly, the Court will grant the County’s Motion for Remand.

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III.

CONCLUSION

For the foregoing reasons, the Court will grant the County’s Motion for Remand
(ECF No. 10). A separate order follows.
Entered this 25th day of April, 2018
/s/
George L. Russell, III
United States District Judge

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