STATE OF WEST VIRGINIA ex rel. DARRELL V. McGRAW, JR., ATTORNEY GENERAL v. Bristol-Myers Squibb Company et al

Filing 29

OPINION. Signed by Judge Freda L. Wolfson on 2/26/2014. (gxh)

*NOT FOR PUBLICATION*
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
__________________________________
:
STATE OF WEST VIRGINIA, ex rel. :
DARRELL V. MCGRAW, JR.,
:
Civil Action No.: 13-1603 (FLW)
ATTONREY GENERAL,
:
:
Plaintiff,
:
:
OPINION
v.
:
:
BRISTOL MYERS SQUIBB CO.,
:
et al.,
:
:
Defendants.
:
__________________________________ :
WOLFSON, District Judge:
In this parens patriae1 action, the State of West Virginia, by its Attorney
General, Darrell V. McGraw, Jr. (“Plaintiff” or the “State”), alleges that BristolMeyers Squibb Company (“BMS”), Sanofi-Aventis U.S., LLC, Sanofi US
Services, Inc. and Sanofi-Synthelabo, Inc. (collectively, “Defendants”), engaged
in unfair and deceptive marketing practices relating to the efficacy of Plavix, an
anti-clotting prescription drug. Initially, Plaintiff brought suit in West Virginia
State Court; however, upon removal by Defendants to the United States
District Court for the Northern District of West Virginia, this case was

Parens patriae, literally “parent of the country,” is a doctrine that
provides a state with standing to sue as a guardian of its citizens when the
state can “articulate an interest apart from the interests of particular private
parties.” LG Display Co., Ltd. v. Madigan, 665 F.3d 768, 771 (7th Cir. 2011);
Allegheny Gen. Hosp. v. Philip Morris, 228 F.3d 429, 436-37 (3d Cir. 2000);
Pennsylvania v. Porter, 659 F.2d 306, 328 (3d Cir. 1981).
1

1

transferred to this Court by the Multi-District Litigation (“MDL”) Panel as a part
of the In re Plavix MDL. In the instant matter, the State moves for remand. For
the reasons set forth below, the Court GRANTS the State’s request, and
accordingly, this matter is transferred to the District Court in the Northern
District of West Virginia for the purpose of remanding this case to the Circuit
Court of Marshall County, West Virginia.
BACKGROUND
The underlying facts of this case are largely not relevant to the issues
presented in the present motion. Suffice to say, the State accuses Defendants
of deceptively marketing Plavix by wrongfully asserting that Plavix is a superior
drug to aspirin for certain indicated usages and charging approximately one
hundred times more for Plavix than aspirin despite knowing that Plavix have
no such superior efficacy. The State filed the Complaint against Defendants in
the Circuit Court of Marshall County, West Virginia on December 28, 2012.
The Complaint only asserts West Virginia state law claims, which include: 1)
violations of the West Virginia Consumer Credit Protection Act (“CCPA”), W. Va.
Code §§ 46Al7l101, et seq.; 2) misrepresentations to the Public Employees
Insurance Agency (“PEIA”) in violation of W. Va. Code § 5-16-12; 3) violations of
the Insurance Fraud Act, W. Va. Code § 33-41-11; 4) unjust enrichment; and
5) common law fraud.

The State seeks, inter alia, insurance payment

reimbursement on behalf of its agency, West Virginia Public Employees
Insurance Agency (“PEIA”), for excessive payments for Plavix for its member
employees.

2

Invoking diversity jurisdiction, Defendants removed the matter on
February 1, 2013, to the United States District Court for the Northern District
of West Virginia. In March 2013, the case was transferred to this Court by the
MDL Panel, after a determination by the Panel to centralize all suits, subject to
its consideration, filed against Defendants related to Plavix. Pending before me
is the Plaintiff’s motion for remand. The State argues that because this is a
parens patriae action, this Court lacks diversity jurisdiction. Defendants, on
the other hand, maintain that diversity jurisdiction exists because the State of
West Virginia is only a nominal party in suit, and the real party is PEIA, a
citizen of West Virginia. Defendants also contend that even if the State is the
real party, this case is nevertheless removable because it is a “class action”
pursuant to the Class Action Fairness Act (“CAFA”), and moreover, substantial
and disputed federal issues exist for this Court to exercise its federal question
jurisdiction.
I held oral argument on this motion, wherein the parties presented
additional arguments and certain concessions on the record. I will cite to the
portions of the hearing transcript where appropriate.
DISCUSSION
I.

Standard of Review
At the outset, because this is a MDL-related proceeding that originated

from West Virginia, I must be clear on applicable choice of law rules.

The

parties, here, agree that under the MDL rules, in transferred diversity-ofcitizenship cases, the transferee federal district court is required to apply the

3

substantive state law of the transferor court, including its choice-of-law rules.
See Paul v. Intel Corp., No. 05-1717, 2010 U.S. Dist. LEXIS 144511, at *163 (D.
Del. Jul. 28, 2010). And, on issues of federal law or federal procedure, the
transferee court applies the law of the circuit in which it sits (here, the Third
Circuit). See Various Plaintiffs v. Various Defendants (“Oil Field Cases”), 673 F.
Supp. 2d 358, 363 (E.D. Pa. 2009) (citing In re Korean Air Lines Disaster, 829
F.2d 1171, 1178 (D.C. Cir. 1987)); see also Transcript of Hearing Dated August
21, 2013 (“Tr.”), T5:11-22.
In a removal matter, the defendant seeking to remove bears the burden
of showing that federal subject matter jurisdiction exists; that removal was
timely filed; and that the removal was proper. Boyer v. Snap-on Tools Corp., 913
F.2d 108, 111 (3d Cir. 1990), cert. denied, 498 U.S. 1085 (1991). Removal
statutes are to be strictly construed against removal, and all doubts are to be
resolved in favor of remand. Shamrock Oil and Gas Corp. v. Sheets, 313 U.S.
100, 104 (1941); Brown v. Francis, 75 F.3d 860, 865, 33 V.I. 385 (3d Cir.
1996).
II.

CAFA Jurisdiction
As a preliminary issue, Defendants conceded during oral argument that

parens patriae suits brought by state attorney generals are generally not
removable as “class actions” under CAFA. See Tr., T46:1-9. In fact, during the
pendency of this motion, the Supreme Court addressed this issue in
Mississippi ex rel. Hood v. AU Optronics Corp., 134 S. Ct. 736 (2014). The Court
essentially held that when a state brings suit on behalf of its citizens and it is

4

the only named plaintiff, the suit is not removable under CAFA. Various other
circuits have reached the same conclusion. See, e.g., Purdue Phrama L.P. v.
Kentucky, 704 F.3d 208 (2d Cir. 2013); LG Display Co., LTD. v. Madigan, 665
F.3d 768, 774 (7th Cir. 2011); Washington v. Chimei Innolux Corp., 659 F3d
842, 848-49 (9th Cir. 2011). Accordingly, this Court lacks jurisdiction under
CAFA in this case.
III.

West Virginia is the Real Party in Interest
Plaintiff posits that this Court lacks diversity jurisdiction because the

State is the real party in interest.

The State reasons that the CCPA -- the

State’s consumer fraud statute -- expressly authorizes the Attorney General to
bring suit on behalf of citizens of West Virginia to vindicate its quasi-sovereign
interest. Here, in addition to seeking disgorgement of insurance payments on
behalf of PEIA, the State claims that it has a substantial pecuniary stake in the
outcome of this litigation as it seeks civil penalties, pursuant to W. Va. Code §
46A-7-111(2), against Defendants up to $5,000 for each willful violation of the
CCPA, which occurred during the four year period prior to suit being filed.
Plaintiff also seeks an injunction to enjoin Defendants from engaging in unfair
or deceptive acts or practices in the future relating to the marketing of Plavix.
On the other hand, Defendants submit that despite the CCPA claims
brought by the State, this case is essentially an insurance reimbursement
action seeking recovery of prescription drug costs expended by PEIA, and
consequently, diversity exists because PEIA, a citizen of West Virginia, is the
real party.

Regarding the State’s CCPA claims, Defendants argue that the

5

CCPA does not apply to promotions of prescription drugs because the “learned
intermediary” doctrine exempts Defendants from liability.

In other words,

Defendants insist that because doctors, rather than consumers, decide which
drugs to prescribe, the CCPA does contemplate actions involving prescription
drugs.
The parties’ dispute centers on whether the State of West Virginia is the
real party in interest. Rule 17 of the Federal Rules of Civil Procedure provides
that:
[e]very action shall be prosecuted in the name of the real party in
interest. . . . No action shall be dismissed on the ground that it is
not prosecuted in the name of the real party in interest until a
reasonable time has been allowed after objection for ratification of
commencement of the action by, or joinder or substitution of, the
real party in interest; and such ratification, joinder, or substitution
shall have the same effect as if the action had been commenced in
the name of the real party in interest.
Fed R. Civ. P. 17(a). According to this Rule, it is clear that diversity jurisdiction
is based on the citizenship of the real party in interest. Navarro Savings Ass'n
v. Lee, 446 U.S. 458, 460-61 (1980); Choi v. Kim, 50 F.3d 244, 246 (3d Cir.
1995) (in determining whether diversity jurisdiction exists, the district court is
“required to decide who was the real party in interest under Rule 17(a) of the
Federal Rules of Civil Procedure”). Thus, the initial step is to examine if West
Virginia, the only plaintiff named in this action, is also the real party in
interest. See Ramada Inns, Inc. v. Rosemount Memorial Park Asso., 598 F.2d
1303, 1306 (3d Cir. 1979) (when a state is a party to an action and that
"particular case involves a question of diversity jurisdiction, the initial inquiry
is [always] the same: is the state the real party in interest to the litigation?"). If
6

it is, then there is no diversity jurisdiction here. See Harris v. Pa. Tpk. Comm'n,
410 F.2d 1332, 1333 n. 1 (3d Cir. 1969) (explaining that a state is not
considered a citizen for purposes of diversity jurisdiction).
That a state, a state agency, or its officers may have been named as
parties in an action is not dispositive of whether that state is the real party in
interest, because such a determination can only be derived from the "essential
nature and effect of the proceeding.” Ford Motor Co. v. Department of Treasury,
323 U.S. 459, 464 (1945); Ramada Inns, Inc. v. Rosemount Memorial Park Asso.,
598 F.2d 1303, 1306 (3d Cir. 1979). Another relevant factor is the stake, if
any, which the state has in the outcome of the litigation beyond a general
desire that its laws be enforced. See Ramada Inns, 598 F.2d at 1307. In other
words, a state may sue on behalf of its citizens as parens patriae when the
interests of a group of citizens are at stake, so long as the state is also
pursuing a quasi-sovereign interest.

See Porter, 659 F.2d at 328; Hawaii v.

Standard Oil Co., 405 U.S. 251, 257-58 (1972).
A quasi-sovereign interest “generally arises from either (1) the State itself
having suffered injury, such as direct damage to its economy, or (2) the general
public having suffered an injury so that no one individual has legal standing to
sue.” Commonwealth of Pennsylvania v. National Association of Flood Insurers,
520 F.2d 11, 22 (3d Cir. 1975) (citations omitted).

In short, if a federal

judgment will have no effect other than to implicate the state's general
“governmental interest in the welfare of all its citizens . . . and in securing
compliance with all its laws,” Missouri, Kansas & Texas Ry. Co. v. Missouri R. R.

7

& Warehouse Commissioners, 183 U.S. 53, 60 (1901), then the state is not a
real party in interest.
To make the determination of whether a state, such as West Virginia, is
seeking relief for its general citizenry or private individuals, a court must
examine the State's claims. There are two ways to undertake such an inquiry:
either on a claim-by-claim basis, or as a single inquiry that encompasses all
the claims, also known as the “whole-case” approach. Unfortunately, the Third
Circuit has not had the occasion to endorse either method; however, the
Fourth Circuit, which includes district courts in West Virginia, has explicitly
adopted the “whole-case” approach. See South Carolina v. AU Optronics Corp.,
699 F.3d 385 (4th Cir. 2012), cert denied, No. 12-911, 2014 U.S. LEXIS 787
(U.S. Jan. 21, 2014). While Defendants argue that this Court should adopt the
claim-by-claim approach set forth by the Fifth Circuit, see Louisina ex rel.
Cadwell v. Allstate Ins. Co., 536 F.3d 418, 430 (5th Cir. 2008), I find that the
“whole-case” approach is supported by the weight of the authorities around the
country.
In reaching my conclusion in this regard, I start with the Third Circuit’s
general proposition that in deciding whether a state is a real party in interest,
courts must look to the "essential nature and effect of the proceeding.”
Ramada Inn, 598 F.2d at 1307.

In my view, that language comports with

examining the nature of the pleadings as a whole, rather than analyzing one
claim at a time. This broader approach is also consistent with the Supreme
Court’s caution that restraint is particularly important in the removal context

8

in light of the longstanding policy of strictly construing the statutory
procedures for removal, see Syngenta Crop Protection, Inc. v. Henson, 537 U.S.
28, 32 (2002), as well as the sovereignty concerns raised by asserting federal
jurisdiction over cases brought by states in their own courts. See Franchise
Tax. Bd. V. Constr. Laborers Vacation Trust, 463 U.S. 1, 21 n.22 (1983)
("[C]onsiderations of comity make us reluctant to snatch cases which a State
has brought from the courts of that State, unless some clear rule demands it.").
In fact, the claim-by-claim analysis has been questioned by a number of
courts.

See Madigan, 665 F.3d at 773-74 (“federal courts are [not] required to

deviate from the traditional ‘whole complaint' analysis when evaluating whether
a State the real party in interest in a parens patriae case")(quotations and
citations omitted); In re TFT-LCD (Flat Panel) Antitrust Litig., MDL No. 1827,
2011 U.S. Dist. LEXIS 17793, 2011 WL 560593, *3 (N.D. Cal. Feb. 15, 2011);
Missouri ex rel. Koster v. Portfolio Recovery Assocs., Inc., 686 F. Supp. 2d 942,
945-46 (E.D. Mo. 2010); Illinois v. SDS West Corp., 640 F. Supp. 2d 1047,
1050-53 (C.D. Ill. 2009); MyInfoGuard, LLC v. Sorrell, No. 12-074, 2012 U.S.
Dist. LEXIS 161070, at * (D. Vt. Nov. 9, 2012). As a result, the "whole-case"
approach has emerged as the majority rule. See Purdue Pharma L.P. v.
Kentucky, 704 F.3d 208, 219 (2d Cir. 2013); Nevada v. Bank of Am. Corp., 672
F.3d 661, 669-70 (9th Cir. 2012); Ohio v. GMAC Mortg., LLC, 760 F. Supp. 2d
741, 745 (N.D. Ohio 2011) ("[A] majority of jurisdictions . . . have looked at a
state's complaint as a whole to determine whether the state is the real-party-ininterest."). In light of the attendant reasoning of the above-cited cases, I adopt

9

the whole-case approach.
Applying that approach, I find that the State is the real party in interest
in this enforcement action. I do not find convincing Defendants’ argument that
the Complaint “overwhelmingly” seeks to vindicate the specific interests of
PEIA, not the State in general. The fact that the State, on behalf of PEIA, also
seeks recovery of prescription drug costs expended by PEIA does not
undermine the State's broader interest in its case. Accord Hood v. AstraZeneca
Pharmas., LP, 744 F. Supp. 2d 590, 596 (N.D. Miss. 2010) ("The fact that
another party may benefit from a favorable resolution of this case does not
minimize or negate the State's substantial interest.").
To be clear, the State asserts causes of action, inter alia, for violations of
the CCPA, and in that connection, the State seeks civil penalties, as well as a
statewide injunction to enjoin Defendants from engaging in unfair or deceptive
practices in violation of West Virginia law in the future.2

As to the civil

penalties, the State is seeking up to $5,000 for each willful violation of the
CCPA by Defendants. It is important to note that these penalties sought by the
State are distinct from any particular interests of private parties because
monies received under § 46A-7-111(2) enure to the State alone.

CVS

Contrary to Defendants’ assertion, as I have fully explained during the
hearing, I find that Plaintiff’s request for injunctive relief is not moot, despite
Defendants’ representation that they have currently ceased promotion for
Plavix. Tr., T50:3 – T52:19. Indeed, for the purposes of this remand motion, I
take Plaintiff’s pleadings as true. And, because the Complaint alleges that “[a]t
all times material herein BMS/Snofi engaged in illegal marketing practices in
West Virginia to promote the use of Plavix by affirmatively representing Plavix
was a superior drug to aspirin for certain indicated usages,” Compl., ¶ 21,
Plaintiff makes clear that the marketing of Plavix is allegedly still ongoing.
Therefore, the allegations do not make the injunctive relief moot.
2

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Pharmacy, 748 F. Supp. 2d at 590. And, it is “well accepted that a state is the
real party in interest when it brings a claim for civil penalties because such
awards add only to the state's coffers rather than any individual's bank
account.” West Virginia ex rel. McGraw v. Comcast Corp., 705 F. Supp. 2d 441,
447 (E.D. Pa. 2010); Connecticut v. Levi Strauss & Co., 471 F. Supp. 363, 372
(D. Conn. 1979).
Moreover, the Attorney General of West Virginia is expressly charged with
enforcing certain provisions of the CCPA. See W. Va. Code § 46A-7-101, et seq.
And, based on that authority, as a general matter, the Attorney General
advances a quasi-sovereign interest when the State seeks relief under the
CCPA for the protection and promotion of consumer welfare in the process.
See West Virginia ex rel. McGraw v. CVS Pharm., Inc., 748 F.Supp. 2d 580, 595
(S.D. W. Va. 2010), aff’d 646 F.3d 169 (4thCir. 2011); West Virginia ex rel.
McGraw v. Fast Auto Loans, Inc., No. 12-64, 2013 WL 142868 (N.D. W. Va. Jan.
11, 2013); West Virginia ex rel. McGraw v. JPMorgan Chase & Co., 842 F.Supp.
2d (S.D. W. Va. 2012).
Taken the pleadings as a whole, I am satisfied that the State has
concrete interests and a substantial stake in the litigation; put simply, the
benefits of the remedies that the State has sought flow to the State as a whole.
Accord Connecticut v. Moody's Corp., No. 10-CV-546, 2011 U.S. Dist. LEXIS
780, 2011 WL 63905 at *3-4 (D. Conn. Jan. 5, 2011); Merrill Lynch, Pierce,
Fenner & Smith, Inc. v. Cavicchia, 311 F. Supp. 149, 155 (S.D.N.Y. 1970)
(quoting Missouri, K. & T. Ry. Co. of Kansas v. Missouri R. & Warehouse

11

Comm'rs, 183 U.S. 53, 59 (1901) ("It may be fairly held that the State is such
[a] real party [in interest] when the relief sought is that which enure to it alone,
and in its favor the judgment or decree, if for the plaintiff, will effectively
operate.")); In re TFT-LCD, 2011 WL560593; Arizona ex rel. Horne v.
Countrywide Fin. Corp., No. 11-131, 2011 WL 9955963 (D. Ariz. Mar. 21,
2011)(holding that Arizona had an interest in the enforcement of its own states’
consumer fraud laws); Nevada, 672 F.3d at 670 (finding that Nevada is the real
party in interest because it had an interest in protecting the integrity of the
mortgage loan service industry through enforcement of its deceptive trade
practices statutes).
Also, I underscore the fact that in this suit, the State is seeking the
remedy of injunctive relief. This alone supports the position that the State is
the only real party in interest. See La. ex rel. Caldwell v. Allstate Ins. Co., 536
F.3d 418, 430 (5th Cir. 2008); Jim Hood ex rel. Miss. v. JP Morgan Chase & Co.,
737 F.3d 78, 88 n. 8 (5th Cir. 2013); Comcast, 705 F. Supp. 2d at 447 (“Courts
have universally accepted the notion that a state is the real party in interest
when it brings a claim for injunctive relief because such a remedy protects both
current and prospective consumers . . . .”); Hood ex rel. Miss. v. Bristol-Myers
Squibb Co., 2013 U.S. Dist. LEXIS 90540, at *13-14 (N.D. Miss. Jun. 27, 2013).
Next, I address Defendants’ contention that a duo of West Virginia
Supreme Court of Appeals cases, White v. Wyeth, 705 S.E. 2d 828 (W. Va.
2010) and West Virginia ex rel. McGraw v. Bear, Stearns & Co., 618 S.E. 2d 582
(W. Va. 2005), precludes the State from bringing CCPA claims because the

12

state consumer fraud statute should not apply to the marketing of prescription
drugs. The West Virginia Supreme Court held in White that the CCPA does not
apply to private causes of action involving prescription drugs because doctors,
rather than consumers, select which drugs to prescribe to an individual, and
consumers are thereby protected by the doctor’s medical judgment -- which is
known as the learned intermediary doctrine. White, 705 S.E.2d at 837. I do
not find White helpful under the circumstances of this case because, in my
view, White’s decision is limited to private causes of action.
The distinguishing fact here is that the sole plaintiff is the State of West
Virginia, and that the State brought this suit to vindicate its quasi-sovereign
interests under the CCPA. In that regard, I find another decision of the West
Virginia Supreme Court instructive. In West Virginia ex rel. McGraw v. Johnson
& Johnson, the State sued Johnson & Johnson for violations of the CCPA for
its allegedly deceptive and misleading promotion of two of its prescription
drugs. 704 S.E. 2d 677, 683-84 (W. Va. 2010). Identical to the instant matter,
the Attorney General, there, sought civil penalties and injunctive relief
pursuant to the CCPA.

While there is no explicit discussion regarding the

learned intermediary doctrine, the Court, nevertheless, permitted the State to
pursue CCPA claims against the drug company.3 Id. Moreover, there is no
I need not engage in a lengthy discussion why the learned intermediary
doctrine does not apply in parens partiae cases in West Virginia, because my
conclusion here is supported by the West Virginia Supreme Court’s decision in
Johnson & Johnson. However, I note that when the State brings consumer
fraud claims involving prescription drugs pursuant to W. Va. Code §§ 46A-7111(2), the State does not need to establish reliance or causation, which is a
required element in private causes of actions brought by individuals under the
3

13

provision in W. Va. Code §§ 46A-7-101, et seq., which exempts pharmaceutical
companies from liability. Rather, based on the statutory language, the purpose
of the CCPA is to “protect consumers from unfair, illegal, and deceptive acts or
practices by providing an avenue of relief for consumers who would otherwise
have difficulty proving their case under a more traditional cause of action.”
State ex rel. McGraw v. Scott Runyan Pontiac-Buick, Inc., 461 S.E. 2d 516, 523
(W. Va. 1995).

Indeed, Defendants have not cited to any authority, West

Virginia or otherwise, that support their contention in this regard.
Furthermore, Defendants claim that the Bear, Stearns decision also
precludes the State from bringing CCPA claims concerning an industry –
prescription drugs -- that is highly regulated by the federal government. I find
that argument unconvincing. In that case, the West Virginia Supreme Court
disallowed the State from bringing CCPA claims involving conduct that is
ancillary to the buying and selling of securities, a highly specialized and
complex industry. Bear, Stearn, 618 S.E. 2d at 587. Importantly, the Court
specifically stated that “[t]he consumer protection act is essentially designed to
protect consumers in the relatively common cash and credit transactions in
which they engage on a regular basis.”

Id.

There is no doubt that the

purchase of prescription drugs is more akin to consumer goods than the types
of complex regulated conduct involved in Bear, Stearns. As such, I do not find
Bear, Stearns dispositive or relevant.
CCPA. In the latter scenario, because individuals must prove damages “as a
result of” a defendant’s deceptive act, the application of the learned
intermediary doctrine is more appropriate. As such, I do not find that White is
dispositive of the issues in this case.
14

Rather, as the West Virginia Supreme Court has explained, prescription
drug cases brought under the CCPA provide an instance in which the federal
regulation

and

the

state

law

consumer

protection

complementary, though somewhat overlapping, roles.”

statutes

“serve

Johnson & Johnson,

704 S.E. 2d at 687, n.6. In that regard, the “degree of federal regulation” in the
pharmaceutical industry does not bar the State’s claims in the present case
because the CCPA claims asserted against Defendants are complementary to
any federal regulations. Id.
Accordingly, based on the foregoing, I find that the State of West Virginia
is a real party in interest,4 and therefore, diversity jurisdiction is lacking.
IV.

Federal Question Jurisdiction
Finally, the State maintains that remand is appropriate because the state

law claims asserted here do not explicitly arise under federal law, nor do they
raise a federal issue that is actually disputed and substantial. As explained
below, the Court agrees with Plaintiff that federal question jurisdiction is
lacking and that remand is appropriate.
In order to determine whether there is federal question subject matter
jurisdiction, the Court must look to Plaintiff's complaint and cannot consider
potential federal defenses. See Merrell Dow Pharmaceuticals Inc. v. Thompson,
478 U.S. 804, 808 (1986). Indeed, the majority of cases that come within
federal question jurisdiction are those in which federal law creates the cause of
action. See Id. However, "in certain cases federal-question jurisdiction will lie
Because I find that the State is a real party in interest, I do not address
the ancillary issue whether PEIA is an arm of the State.
4

15

over state-law claims that implicate significant federal issues." Grable & Sons
Metal Products, Inc. v. Darue Engineering & Manufacturing, 545 U.S. 308, 312
(2005)(citation omitted). The Supreme Court has recently reaffirmed that the
"'special and small category' of cases" in which federal question jurisdiction will
predominate over state-law claims that implicate significant federal issues is
"slim." Gunn v. Minton, 133 S. Ct. 1059 (Feb. 20, 2013) (quoting Empire
Healthchoice Assurance v. McVeigh, 547 U.S. 677, 699, 701 (2006)).
To that end, the Supreme Court has addressed the circumstances in
which federal question jurisdiction can predominate over a state law claim that
implicates a federal issue:
[F]ederal jurisdiction over a state law claim will lie if a federal issue
is: (1) necessarily raised, (2) actually disputed, (3) substantial, and
(4) capable of resolution in federal court without disrupting the
federal-state balance approved by Congress. Where all four of these
requirements are met . . . jurisdiction is proper because there is a
serious federal interest in claiming the advantages thought to be
inherent in a federal forum, which can be vindicated without
disrupting Congress's intended division of labor between state and
federal courts.
Gunn, 133 S.Ct. at 1065.
Importantly, it is not sufficient that the federal issue be significant to the
particular parties in the immediate suit; indeed, 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.” Id. at 1066.
Here, Defendant argues that Plaintiff's state law consumer fraud related
claims necessarily raise a stated and disputed federal issue, because resolution

16

of those claims requires the application of the Food, Drug, and Cosmetic Act
(“FDCA”). Specifically, Defendant argues that the FDCA must be applied to
determine the accuracy and sufficiency of Plavix’s labeling and marketing, and
in doing so, significant federal issues are implicated. The Court assumes for
the purposes of this motion, without deciding, that there are stated federal
issues in this case that are actually disputed; however, that does not end the
Court's inquiry.
Defendant has not shown that the federal issues in this case are
substantial. A substantial federal issue is “a serious federal interest in claiming
the advantages thought to be inherent in a federal forum,” one that “justif[ies]
resort to the experience, solicitude, and hope of uniformity that a federal forum
offers.” Grable, 545 U.S. at 312-13.

As one court – addressing an identical

issue – cogently reasoned:
the application of the FDCA regulatory regime is not a federal
interest that requires the experience, solicitude, or uniformity
provided by federal courts. To the contrary, the Supreme Court has
recognized that state courts have traditionally handled state claims
with embedded FDCA standards. Indeed, the Supreme Court [in
Merrell Dow] noted that even a novel FDCA issue raised as part of a
state cause of action would not typically justify the exercise of
federal jurisdiction.
Or. ex rel. Kroger v. Johnson & Johnson, 832 F. Supp. 2d 1250, 1257 (D. Or.,
2011).
Indeed, regarding the FDCA regime in particular, the Supreme Court has
stressed Congress' intent (1) not to create a federal remedy for violations of the
FDCA, while (2) selectively declining to pre-empt most state causes of action
based on FDCA standards. Merrell Dow, 478 U.S. at 814; see Wyeth v. Levine,
17

555 U.S. 555, 574-75 (2009); see also Grable, 545 U.S. at 318. To that end,
“Congress has affirmatively decided to keep such actions out of federal courts
while allowing overlapping regulation and litigation in state forums.” Marcus v.
Medical Initiatives, Inc., No. 12-2864, 2013 U.S. Dist. LEXIS 26759, at *14 (Md.
Fla. Feb. 27, 2013).

Based on these Supreme Court precedents, there is a

strong suggestion that there is no real need in drug-related consumer
protection cases for the experience, solicitude, and hope of uniformity that a
federal forum offers. More compelling, within the context of the FDCA regime
in particular, the Supreme Court [in Merrell Dow] has concluded “that the
presence of a claimed violation of the [FDCA] statute as an element of a state
cause of action is insufficiently 'substantial' to confer federal-question
jurisdiction.” Merrell Dow, 478 U.S. at 814.
Here, the disputed factual issue centers on whether Defendants acted in
an unfair and deceptive manner in their marketing and labeling of Plavix.
Other than the fact that Plaintiff's claims may implicate the FDCA -- that is,
the FDCA may be consulted or analyzed in establishing certain elements of the
state law claims -- that in and of itself is not substantial under Garble to
support federal question jurisdiction. For one, this case represents the very
type of action the Supreme Court in Merrell Dow has cautioned against in
finding federal question jurisdiction. Furthermore, the lack of a federal cause
of action under the FDCA weighs heavily in favor of the conclusion that the
federal issues in this case are not substantial.
Lastly, Defendants also have not shown that recognizing federal question

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jurisdiction in this case would not disrupt the balance struck by Congress
between state and federal judicial responsibilities. The substantiality and
federalism prongs of Grable are closely intertwined. Gunn, 133 S.Ct. at 1065.
For the same reasons that an embedded FDCA standard does not generally
constitute a "substantial" federal issue, the Supreme Court has concluded that
Congress did not intend to preclude state courts from hearing FDCA-related
actions. See Wyeth, 555 U.S. at 574. Thus, if I were to find federal jurisdiction
here, I could potentially open the federal courthouse door to a tremendous
number of cases, and could therefore upset the congressionally intended
division between state and federal courts. See Grable, 545 U.S. at 318. See,
e.g., Caldwell ex rel. La. v. Bristol Myers Squibb, No. 12-443, 2012 U.S. Dist.
LEXIS 126042, at * (W.D. La. Jun. 12, 2012) (“were this Court to find that
there is federal-question jurisdiction over this action because the FDCA . . . is
implicated, that finding would be inconsistent with Congress's judgment
regarding the sound division of labor between state and federal courts.”)
(quotations and citations omitted); Marcus, 2013 U.S. Dist. LEXIS 26759 at *
16; County of Santa Clara ex rel. Marquez v. Bristol Myers, No. 12-3256, 2012
U.S. Dist. LEXIS 133405, at * (N.D. Cal. Sep. 17, 2012)(“State courts
‘frequently handle state-law consumer protection suits’ that refer to federal
issues.”)(quoting Nevada, 672 F.3d at 675).
In sum, I do not find that this case falls within the narrow exception
carved out by Garble to justify federal question jurisdiction.

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CONCLUSION
As the removal party, Defendants have the burden of establishing the
existence of subject matter jurisdiction; Defendants have failed to do so.
Because Plaintiff has only asserted state-law claims, Defendants have failed to
demonstrate that substantial federal law issues are implicated in this case for
the Court to exercise federal question jurisdiction. Moreover, Defendants also
have failed to establish jurisdiction under CAFA. Finally, because the State is
the real party in interest, the parties are not diverse in citizenship; this action
does not fall within this Court's diversity jurisdiction. Consequently, Plaintiffs’
motion for remand is GRANTED, and this matter is transferred to the United
States District Court for the Northern District of West Virginia for the purpose
of remanding this case to the Circuit Court of Marshall County, West Virginia.
An appropriate Order shall follow.

Dated: February 26, 2014

/s/
Freda L. Wolfson
Freda L. Wolfson, U.S.D.J.

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