State of West Virginia et al v. McKesson Corporation

Filing 29

MEMORANDUM OPINION AND ORDER granting plaintiffs' 8 MOTION to Remand this case to the Circuit Court of Boone County, West Virginia; and denying the 8 MOTION for costs and fees. Signed by Judge John T. Copenhaver, Jr. on 1/24/2017. (cc: counsel of record; any unrepresented parties; Clerk, Circuit Court of Boone County, West Virginia) (taq)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF WEST VIRGINIA
AT CHARLESTON
THE STATE OF WEST VIRGINIA ex rel.
PATRICK MORRISEY, Attorney General,
JOSEPH THORNTON, in his capacity as
the Secretary of the West Virginia
Department of Military Affairs and
Public Safety, and
KAREN BOWLING, in her capacity as
the Secretary of the West Virginia
Department of Health and Human
Resources,
Plaintiffs,
v.

Civil Action No. 16-1772

MCKESSON CORPORATION,
a Delaware corporation doing
business in West Virginia,
Defendant.
MEMORANDUM OPINION AND ORDER
Pending is plaintiffs’ motion to remand, filed on
March 3, 2016 (ECF No. 8).
I.

Facts and Procedural Background

Plaintiffs State of West Virginia ex rel. Patrick
Morrisey, Attorney General, Joseph Thornton, Secretary, and
Karen Bowling, Secretary, allege that defendant McKesson
Corporation, a national pharmaceutical drugs distributor, did
not take sufficient steps to monitor, report, and remedy

purportedly suspicious shipments of pharmaceuticals into West
Virginia.

Plaintiffs brought this case against defendant in the

Circuit Court of Boone County, West Virginia, on January 8,
2016.

Defendant removed on February 23, 2016, alleging federal

question jurisdiction.
Plaintiffs’ amended complaint (“complaint”) alleges
that defendant has caused substantial damage to the state of
West Virginia and to various state agencies.

For example, it

alleges that
[t]he actions of the Defendant have caused and will
continue to cause the West Virginia [Department of
Health and Human Resources (“DHHR”)] to expend
substantial sums of State money to deal with the
effects of epidemic of prescription drug addiction
that was substantially fueled by the Defendant's
illegal, reckless, and malicious action in flooding
the state with highly addictive prescription
medications without regard for the consequences to
West Virginia DHHR.
Am. Compl. ¶ 26 (hereinafter “Compl.”).

Likewise, it alleges

that
[t]he actions of the Defendant has caused, and will
continue to cause the West Virginia [Department of
Military Affairs and Public Safety] to expend
substantial sums of State money to deal with the
effects of epidemic of prescription drug addiction
that was substantially fueled caused [sic] by the
Defendant's illegal, reckless, and malicious action in
flooding the state with highly addictive prescription
medications without regard for the consequences to the
Plaintiffs.

2

Compl. ¶ 33.

The Prayer for Relief requests that the court

certify “a jury trial on all issues so triable to determine
costs, losses, and damages as a result of the Defendant's
actions outlined in this Complaint.”
clause).

Compl. p. 58 (WHEREFORE

In addition, it requests both temporary and permanent

injunctions
preventing Defendant from continuing to violate West
Virginia laws and regulations and United States laws
and regulations relating to the distribution of
controlled substances in the State and mandate
Defendant to promptly notify the West Virginia Board
of Pharmacy, Office of the Attorney General, and the
WV Department of Military Affairs and Public Safety of
any and all suspicious orders for controlled
substances as received from parties who are located in
West Virginia and to submit their system for
determining suspicious order [sic] to those West
Virginia authorities for prior approval, and to enjoin
Defendant from distributing any controlled substance
in West Virginia for any non-legitimate medical
purpose.
Id. p. 58-59 (WHEREFORE clause).
The complaint alleges that defendant McKesson
Corporation failed to implement systems and procedures to report
and prevent massive diversion of prescription drugs to illegal
purposes in West Virginia.

See, e.g., Compl. ¶¶ 347, 353, 366.

Plaintiffs allege that McKesson is liable on eight counts:
violation of the West Virginia Consumer Credit and Protection
Act (Count I); unfair methods of competition and/or unfair or
deceptive acts or practices (Count II); violations of the West
3

Virginia Uniform Controlled Substances Act (“WVCSA”) requiring
injunctive relief (Count III); negligent violation of the WVCSA
(Count IV); intentional violation of the WVCSA (Count V); public
nuisance (Count VI); negligence (Count VII); and unjust
enrichment (Count VIII).
Counts III, IV, and V, relating to the WVCSA, also
make reference to “United States laws and regulations.”
three counts are the only ones that do so.

Those

In Count III,

plaintiffs state their entitlement to both a temporary and a
permanent injunction “to prevent Defendant from continuing to
violate West Virginia and United States laws and regulations.”
Id. ¶¶ 374-75.

In Count IV, plaintiffs allege that “[u]pon

information and belief, Defendant continues to negligently
violate West Virginia laws and regulations, United States laws
and regulations, and Defendant's industry customs, standards and
practices, which continue to proximately cause substantial
damages to Plaintiffs.”

Id. ¶ 390.

Count V reiterates this

allegation, but alleges intentional violations.

Id. ¶ 403.

In

addition, the Prayer for Relief requests temporary and permanent
injunctions preventing “Defendant from continuing to violate
West Virginia laws and regulations and United States laws and
regulations relating to the distribution of controlled
substances in the State.”

Id. p. 58-59 (WHEREFORE clause).

4

In response to defendant’s removal, plaintiffs filed
the pending motion to remand.

Plaintiffs argue that the

complaint does not allege any federal claims, and plaintiffs
contend that the complaint disclaims federal law as the source
of the State of West Virginia’s cause of action.

The complaint

does not explicitly disclaim federal law, but it does allege
similarity between the claims at issue here and those at issue
in cases previously remanded by this court to state court for
lack of federal diversity jurisdiction.

Compl. ¶ 37.

It states

the corollary that there is “no objectively reasonable basis for
jurisdiction in any other court.”

Id.

Plaintiffs also claim that, on its face, the complaint
does not rely on federal law to generate a cause of action,
despite the smattering of nonspecific references in three Counts
to “United States laws and regulations.”

See Compl. ¶¶ 374

(Count III), 390 (Count IV), 403 (Count V).

Plaintiffs explain

these references as merely incorporating references to federal
law that exist in pertinent West Virginia state licensure law.
Pls.’ Mem. in Supp. Mot. to Remand 2 (hereinafter “Pls.’ Mot.”).
State law provides that one of the qualifications for licensure
is that an applicant operate “in compliance with all federal
legal requirements applicable to wholesale drug distribution.”
W. Va. Code § 60A-8-7(c)(1)(I).

5

The complaint does not reference particular federal
laws, although it contains numerous specific references to state
statutes and regulations.

For example, the complaint alleges

that “Defendant was on notice that West Virginia law required
it, inter alia, to provide effective controls and procedures to
guard against diversion of controlled substances, pursuant to 15
C.S.R § 2-4.2[.]1 and 2-4.4 and the [WVCSA].”

Compl. ¶ 42.

West Virginia rule 15-2-4.2.1 states as follows:
All registrants1 shall provide effective controls and
procedures to guard against theft and diversion of
controlled substances. In order to determine whether a
registrant has provided effective controls against
diversion, the [West Virginia] Board [of Pharmacy]
shall evaluate the overall security system and needs
of the applicant or registrant.
W. Va. C.S.R. 15-2-4.2.1.

Rule 15-2-4.4 further requires as

follows:
The registrant shall design and operate a system to
disclose to the registrant suspicious orders of
controlled substances. The registrant shall inform the
Office of the Board of suspicious orders when
discovered by the registrant. Suspicious orders
include orders of unusual size, orders deviating
1

The State Board of Pharmacy (“Board”) regulations define a
“registrant” as “a person who has obtained a controlled
substance permit from the Board.” W. Va. C.S.R. 15-2-5.1.16.
Furthermore, the WVCSA states that “every person who
manufactures, distributes, or dispenses any controlled
substance” is required to register annually with the Board.
See, e.g., W. Va. Code § 60A-3-302(a). As such, distributors
are clearly included within the meaning of registrant.
6

substantially from a normal pattern, and orders of
unusual frequency.
W. Va. C.S.R. 15-2-4.4.
The complaint specifically alleges violations of West
Virginia laws and regulations in the three Counts identified by
defendant as referencing federal law.

Count III alleges, inter

alia, as follows:
363. Defendant is required to "provide effective
controls and procedures to guard against theft and
diversion of controlled substances." 15 C.S.R. § 24.2.1
. . . .
365. Suspicious orders include any orders of
unusual size, orders deviating substantially from a
normal pattern, and orders of unusual frequency. 15
C.S.R. § 2-4.4.
366. Defendant failed to diligently identify and
report suspicious orders it received. Defendant
continued to fill suspicious orders.
367. Defendant either blindly ignored suspicious
orders or failed to develop a system sufficient to
adequately identify suspicious orders as they were
received.
Compl. ¶¶ 363-67.

Count IV alleges, inter alia, the following:

377. The Defendant contributed to the epidemic
prescription drug abuse problem in the State of West
Virginia through repeated negligent violations of
various provisions of the West Virginia Uniform
Controlled Substances Act, to wit:
. . . .

7

• Defendant negligently engaged in prohibited
acts, contrary to W.Va. Code §§ 60A-4-401 through
4032;
• Defendant negligently abetted and continue
[sic] to abet individuals in deceiving and
attempting to deceive medical practitioners in
order to obtain prescriptions in violation of
W.Va. Code § 60A-4-401.
• The Defendant negligently failed to meet the
requirements of W.Va. Code § 60A-8-1 et seq.3
• The Defendant negligently conspired to violate
the WV Uniform Controlled Substances Act.
Compl. ¶ 377.

Finally, Count V alleges, inter alia, the

following:
392. The Defendant intentionally contributed to
the epidemic prescription drug abuse problem in the
State of West Virginia through repeated intentional
violations of various provisions of the West Virginia
Uniform Controlled Substances Act and through reckless
disregard to the safety and well-being to [sic] the
citizens of West Virginia, to wit:

2

Sections 60A-4-401 through 403 of the WVCSA describe prohibited
acts under the law and penalties for those acts. The statute
makes it unlawful, for example, for any person “[w]ho is subject
to article 3 to distribute or dispense a controlled substance in
violation of section [60A-3-]308.” W. Va. Code § 60A-4402(a)(1). Section 60A-3-308 of the WVCSA governs distribution
of controlled substances, which is prohibited except by
prescription. It provides, for example, that substances
included in certain schedules of the law “shall not be
distributed or dispensed other than for a medicinal purpose.”
W. Va. Code § 60A-3-308(d)(1).
3

Section 60A-8-1 et seq. refers to the West Virginia Wholesale
Drug Distribution Licensing Act of 1991 (“WVDDLA”). The WVDDLA
governs persons engaged in the “wholesale distribution of human
prescription drugs within [West Virginia].” W. Va. Code § 60A8-2.
8

. . . .
• Defendant intentionally engaged in prohibited
acts, contrary to W.Va. Code §§ 60A-4-401 through
403;
• Defendant intentionally abetted and continue
[sic] to abet individuals in deceiving and
attempting to deceive medical practitioners in
order to obtain prescriptions in violation of
W.Va. Code § 60A-4-401.
• Defendant intentionally failed to meet the
requirements of W.Va. Code § 60A-8-1 et seq.
• Defendant intentionally conspired to violate
the WV Uniform Controlled Substances Act.
Compl. ¶ 392.
Plaintiffs also contend that “[e]ven if this Court
finds the State’s Amended Complaint implicates federal law, it
still does not rise to the level of a substantial federal
question” under Grable & Sons Metal Products, Inc. v. Darue
Engineering and Manufacturing, 545 U.S. 308 (2005), discussed
further at page twelve, infra.

Pls.’ Mot. 13.

Defendant responds that plaintiffs’ complaint can be
reduced in substance to a theory of the case in which defendant
breached a single “duty to refuse to fill suspicious orders” of
certain pharmaceutical drugs.

See, e.g., Def.’s Resp. to Pls.’

Mot. to Remand 6 (hereinafter “Def.’s Resp.”).

Defendant argues

that the federal Controlled Substances Act (“federal CSA”) alone
can generate the duty that defendant is alleged to have

9

breached.

Def.’s Resp. 10 (“No court could issue the requested

instructions without specifically concluding that McKesson
violated federal law – i.e., the federal CSA.”).

According to

defendant, the duty to refuse to fill suspicious orders does not
arise directly from the federal CSA; instead, it arises, if at
all, in the federal CSA “as interpreted by [the Drug Enforcement
Agency (“DEA”)]” in two letters, written in 2006 and 2007, from
the DEA to all registered distributors.

Id. 7, 15.4

The 2006 DEA letter stated that “in addition to
reporting suspicious orders, a distributor has a statutory
responsibility to exercise due diligence to avoid filling
suspicious orders that might be diverted into other than
legitimate . . . channels.”

Masters Pharmaceuticals, Inc.,

Decision and Order, 80 Fed. Reg. 55,418, 55,421.

The 2007

letter warned distributors that “[r]eporting an order as
suspicious will not absolve the registrant of responsibility if
the registrant knew, or should have known, that the controlled
substances were being diverted.”
Fed. Reg. at 55,421.

Masters Pharmaceuticals, 80

Defendant argues that the two letters

4

Defendant notes with respect to the federal CSA that it “does
not contend that federal law completely preempts plaintiffs’
claims” and accordingly, defendant does not address that
proposition but merely notes that plaintiffs’ “discussion of . .
. complete preemption . . . is inapposite.” Def.’s Resp. 9
n.10.
10

together generate a single duty to “refuse to fill suspicious
orders” that forms the basis of all of plaintiffs’ claims.
e.g., Def.’s Resp. 6.5

See,

Defendant also contends that removal is

improper only if plaintiffs rely exclusively on state law
claims, which defendant says they allegedly do not.

Rather,

defendant asserts that federal claims are present on the face of
the complaint in Counts III, IV, and V in the references to
“United States laws and regulations,” and that all of
plaintiffs’ claims depend on a substantial federal question.
II.
A.

Analysis

Removal Standards

The issue before the court is whether plaintiffs’
complaint states a claim sufficiently federal in nature to
justify the exercise of federal question removal jurisdiction by
this court.

Federal courts are not courts of general

jurisdiction: they “possess only that power authorized by
Constitution and statute.”

Kokkonen v. Guardian Life Ins. Co.

of Am., 511 U.S. 375, 377 (1994); 28 U.S.C. § 1331 (“The
district courts shall have original jurisdiction of all civil

5

Defendant characterizes this duty equivocally at various points
as a duty to refuse to fill suspicious orders, a duty to refuse
to ship such orders, and a duty to refuse such orders. See,
e.g., Def.’s Resp. 1-2. For simplicity’s sake, however, the
court will use the defendant’s most consistent statement of the
duty - a duty to refuse to fill suspicious orders. See id. 6.
11

actions arising under the Constitution, laws, or treaties of the
United States.”).

Jurisdiction is “determined from what

necessarily appears in the plaintiff's statement of his own
claim in the bill or declaration.”
74, 75 (1914).

Taylor v. Anderson, 234 U.S.

The most obvious manner of establishing

jurisdiction is by pleading a federal cause of action.

See,

e.g., Empire Healthchoice Assur., Inc. v. McVeigh, 547 U.S. 677,
690 (2006).
claim.’”

Additionally, the “plaintiff is the ‘master of the

Pinney v. Nokia, Inc., 402 F.3d 430, 442 (4th Cir.

2005) (quoting Caterpillar Inc. v. Williams, 482 U.S. 386, 392
(1987)).
In the event a case is not properly removed to federal
court, the court must remand the case to state court.

28 U.S.C.

§ 1447 (“If at any time before final judgment it appears that
the district court lacks subject matter jurisdiction, the case
shall be remanded.”).

For the purpose of removal jurisdiction,

defendant bears the burden of “demonstrating the court's
jurisdiction over the matter.”

Strawn v. AT & T Mobility LLC,

530 F.3d 293, 296 (4th Cir. 2008).

The Supreme Court has stated

that “considerations 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.”

Franchise Tax Bd. of State of Cal.

v. Constr. Laborers Vacation Tr. for S. Cal., 463 U.S. 1, 21

12

n.22 (1983).

Indeed, a state court is often “competent to apply

federal law, to the extent it is relevant.”
Healthchoice, 547 U.S. at 701.

Empire

Courts disfavor removal

jurisdiction particularly when a case involves substantial
questions of state law.

See Bender v. Jordan, 623 F.3d 1128,

1130 (D.C. Cir. 2010) (“[F]ederal jurisdiction is disfavored for
cases that are ‘fact-bound and situation-specific’ or which
involve substantial questions of state as well as federal
law.”); Lontz v. Tharp, 413 F.3d 435, 440 (4th Cir. 2005)
(“[S]tate law complaints usually must stay in state court when
they assert what appear to be state law claims.”).
Federal jurisdiction may arise under the
“well-pleaded complaint rule” even when the complaint does not
explicitly plead a federal cause of action.

A suit arises under

this rule “if a well-pleaded complaint established that its
right to relief under state law requires resolution of a
substantial question of federal law in dispute between the
parties.”

Franchise Tax, 463 U.S. at 13.

such a situation is Grable.

The leading case in

545 U.S. 308 (2005) (finding

removal jurisdiction where plaintiff brought an action in state
court to quiet title on deed for property that had been
confiscated by IRS under federal tax law, concerning which

13

plaintiff alleged IRS had failed to notify him in accordance
with federal law).

Id. at 310-11.

Where a complaint implicates federal law, “the
question is, does a state-law claim necessarily raise a stated
federal issue, actually disputed and substantial, which a
federal forum may entertain without disturbing any
congressionally approved balance of federal and state judicial
responsibilities.”

Id. at 314.

“That is, federal 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.”
Minton, 133 S. Ct. 1059, 1065 (2013).

Gunn v.

Grable jurisdiction,

however, exemplifies a “slim category” of cases.

Empire

Healthchoice, 547 U.S. at 701; W. Va. ex rel. McGraw v. Rite Aid
of W. Va., Inc., No. CIV.A. 2:09-0956, 2010 WL 454488, at *2
(S.D.W. Va. Feb. 1, 2010) (“‘Obviously, not every state-law
claim raising a federal issue can invoke federal question
jurisdiction. Indeed, such cases will be exceptional.’” (quoting
Wright & Miller, Fed. Prac. and Proc. § 3562 (3d ed. 1998))).
Alleging there is a “federal issue” is not a “password opening
federal courts to any state action embracing a point of federal
law.”

Grable, 545 U.S. at 314.

Furthermore, “any doubts

14

concerning the propriety of removal should be resolved against
removal.”

Barbour v. Int'l Union, 640 F.3d 599, 617 (4th Cir.

2011) (emphasis original).
B.

Plaintiffs’ Facial Claims

Plaintiffs seek remand first by noting that the
complaint disavows any dependence upon federal law.

Indeed, the

complaint does disavow any relief for federal monies expended
under federal programs such as Medicaid, Compl. ¶ 36; and it
identifies prior cases of this court that were remanded under
similar factual scenarios, and it also specifies West Virginia
courts as the only courts properly having jurisdiction, id. ¶
37.
Defendant, however, is correct that the complaint does
reference federal laws and regulations generally on occasion.
The 61-page pleading references “United States laws and
regulations” a total of nine times, including in the Prayer for
Relief and Counts III (injunctive relief under WVCSA), IV
(negligence under WVCSA), and V (intentional acts under WVCSA).
The Prayer requests temporary and permanent injunctions
preventing “Defendant from continuing to violate West Virginia
laws and regulations and United States laws and regulations
relating to the distribution of controlled substances in the
State.”

Id. p. 58-59 (WHEREFORE clause).
15

In Count III,

plaintiffs state their entitlement to both a temporary and a
permanent injunction “to prevent Defendant from continuing to
violate West Virginia and United States laws and regulations.”
Id. ¶¶ 374-75.

In Count IV, plaintiffs allege that “[u]pon

information and belief, Defendant continues to negligently
violate West Virginia laws and regulations, United States laws
and regulations, and Defendant's industry customs, standards and
practices, which continue to proximately cause substantial
damages to Plaintiffs.”

Id. ¶ 390.

Count V reiterates this

allegation with respect to intentional violations.

Id. ¶ 403.

Aside from these scattered references, however, plaintiffs’
complaint does not appeal to recourse under federal law.

It

neither alleges a federal cause of action nor refers to specific
federal statutes or regulations, although it does make many
specific references to West Virginia laws and regulations.

See,

e.g., id. ¶¶ 377, 392.
Though defendant asserts that the statements in Counts
III, IV, and V amount to “specifically pleading federal law
violations,” Def.’s Resp. 6, that is patently not the case.
fact, when juxtaposed with the specific references to West
Virginia laws alleged in those same Counts, the generic
references to “United States laws and regulations” emerge as
nothing more than ambiguous catch-alls.

16

Importantly, these

In

catch-alls are presented by defendant as magic words on the face
of the complaint that open the door to the federal courts.
e.g., Def.’s Resp. 10-11.

See,

This argument closely resembles the

“password” approach to removal jurisdiction expressly
disapproved by Grable.

545 U.S. at 314.

Plaintiffs explain these federal catch-alls in the
complaint as references intended, in effect, to mirror the
interdependent nature of West Virginia and federal licensure law
in this area.

Plaintiffs argue that the complaint’s federal law

references merely point out that “the defendant, as required by
state law, must also comply with all federal legal requirements
regarding wholesale drug distribution.”

Pls.’ Mot. 16.

West

Virginia does, in general fashion, on occasion incorporate
references to federal law into its state licensure statute.

For

example, as plaintiffs note, West Virginia Code § 60A-8-7 states
as one of the minimum qualifications of licensure that an
applicant maintain “operations in compliance with all federal
legal requirements applicable to wholesale drug distribution.”
W. Va. Code § 60A-8-7(c)(1)(I).

Plaintiffs do not allege,

however, that such federal law provides either a cause of action
or a basis for a legal duty violated here, and as such it cannot
be a basis for federal jurisdiction.

17

C.

Federal Issue Analysis under Grable

With respect to whether the complaint raises a federal
issue, even if it does not state a federal claim on its face,
defendant argues that all of plaintiffs’ claims necessarily
reduce to an allegation of the violation of a substantial
federal duty – the duty to refuse to fill suspicious orders.
Defendant contends that “in addition to specifically pleading
federal law violations in Counts III, IV, and V, all Plaintiffs’
claims necessarily depend on McKesson’s alleged violation of a
duty that may be found, if at all, only in federal law.”
Resp. 6.

Def.’s

This duty is, according to defendant, McKesson’s “duty

to refuse to fill suspicious orders.”

Id.

Defendant does not find the source of this duty in the
federal CSA statute itself, but in the DEA letters’
interpretation of the federal CSA.

Defendant contends that “if

a requirement to refuse to fill suspicious orders of controlled
substances exists at all,” it exists in the two letters from the
DEA to distributors, dated September 27, 2006 and December 27,
2007, that interpreted the CSA.

The 2006 DEA letter stated that

“in addition to reporting suspicious orders, a distributor has a
statutory responsibility to exercise due diligence to avoid
filling suspicious orders that might be diverted into other than
legitimate . . . channels.”

Masters Pharmaceuticals, 80 Fed.
18

Reg. at 55,421.

The 2007 letter warned distributors that

“[r]eporting an order as suspicious will not absolve the
registrant of responsibility if the registrant knew, or should
have known, that the controlled substances were being diverted.”
Masters Pharmaceuticals, 80 Fed. Reg. at 55,421.
Under Grable’s test, a properly removed claim must
“necessarily raise a stated federal issue, actually disputed and
substantial, which a federal forum may entertain without
disturbing any congressionally approved balance of federal and
state judicial responsibilities.”

Grable, 545 U.S. at 314.

See

also Gunn, 133 S. Ct. at 1065 (noting that under Grable “federal
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”).
Plaintiffs dispute that their allegations fulfill the
first prong of Grable of necessarily depending on the single
duty identified by defendant – to avoid filling suspicious
orders.

First, they correctly note that the federal CSA statute

imposes no explicit duty to refuse orders – the only duty
defendant claims to be at issue - on distributors.

See 21

U.S.C. § 823 (requiring only that distributors “maint[ain]
19

effective control against diversion of particular controlled
substances”).

Likewise, they correctly observe that defendant

undermines its own argument by calling into question the
existence of the duty in which it finds the only source of
federal question jurisdiction.

See Def.’s Resp. 8 (“if a

requirement to refuse to fill suspicious orders . . . exists at
all”).
Second, plaintiffs contend that the allegations in
their complaint depend, inter alia, on state-law duties imposed
on the defendant to design and operate a system to detect,
monitor, identify, and report suspicious orders, not only a duty
to refuse to fill such orders.

See, e.g., Compl. ¶ 24 (alleging

that “West Virginia DHHR has been damaged by the Defendant's
negligent actions in failing to investigate, report, and cease
fulfilling suspicious orders to pharmacies and drug stores in
the State of West Virginia”), ¶ 346 (alleging defendant failed
to implement a “precise system of detecting and monitoring the
supply of prescription medicine”), ¶ 406 (alleging “failure to
adequately design and operate a system to disclose suspicious
orders of controlled substances, and [] failure to inform the
State of suspicious orders when discovered by the registrant”).
The complaint cites on numerous occasions to West Virginia
regulations, which require, for example, that “[t]he registrant

20

shall design and operate a system to disclose to the registrant
suspicious orders of controlled substances.”
2-4.4.

W. Va. C.S.R. 15-

In Count III, plaintiffs allege that defendant “failed

to diligently identify and report suspicious orders it
received,” Compl. ¶ 366, and “failed to develop a system
sufficient to adequately identify suspicious orders,” id. ¶ 367.
Counts IV and V allege violations of West Virginia statutory
provisions, including violations of West Virginia Code § 60A-3308, 60A-4-401 through 403, and 60A-8-1, et seq.6, that cannot be
reduced simply to a duty to avoid filling orders.

See, e.g.,

id. ¶¶ 377, 392.
Third, plaintiffs’ allegations do not “necessarily”
involve a “stated federal issue.”

Grable, 545 U.S. at 314.

pleadings certainly do not “state” a federal issue.

6

The

Even taking

Of these references to West Virginia law, defendant appears to
address only the reference to Section 60A-8-1, et seq., which
involves the WVDDLA. Def.’s Resp. 12. Defendant argues that
Section 60A-8-1, et seq., does not allege a state claim because
it “implements federal law – namely, the Prescription Drug
Marketing Act of 1987, now the Federal Food, Drug, and Cosmetic
Act, and its regulations.” Id. (citing W. Va. Code § 60A-8-3).
However, while the WVDDLA’s prefatory remarks in Section 60A-8-3
do proffer that the state law’s purpose is to implement federal
law, the WVDDLA nevertheless provides its own statutory
requirements and standards, and therefore cannot be
characterized as necessarily requiring analysis of federal
issues. Furthermore, state courts are “competent to apply
federal law, to the extent it is relevant.” Empire
Healthchoice, 547 U.S. at 701. Accordingly, this state law does
not necessarily raise a substantial federal issue.
21

the formulation from Gunn that omits the requirement that an
issue be stated, 133 S. Ct. at 1065, it is not “necessary” here
to resolve a putative federal issue.

Even if the only duty at

issue were that stipulated by defendant, there is no reason to
think its only source lies in two letters from the DEA.

The

complaint nowhere mentions such letters, or any federal agency
guidance, and defendant itself calls into question the very
existence of a federal duty.
Furthermore, plaintiffs’ complaint alleges violations
of numerous duties implicated by state law.

For example, the

West Virginia State Board of Pharmacy’s rules require that
“[a]ll registrants shall provide effective controls and
procedures to guard against theft and diversion of controlled
substances.”

W. Va. C.S.R. 15-2-4.2.1.

The same rules require

that a “registrant shall design and operate a system to disclose
to the registrant suspicious orders of controlled substances.
The registrant shall inform the Office of the Board of
suspicious orders when discovered by the registrant.”
C.S.R. 15-2-4.4.

W. Va.

As noted above, plaintiffs allege violations

of numerous duties implicated by these regulations, including
duties to “investigate, report, and cease fulfilling suspicious
orders,” Compl. ¶ 24, to implement a “precise system of
detecting and monitoring the supply of prescription medicine,”

22

Compl. ¶ 346, “to adequately design and operate a system to
disclose suspicious orders of controlled substances,” Compl. ¶
406, and “to inform the State of suspicious orders,” id.
Finally, this case is disanalogous to Grable.

Grable

upheld removal jurisdiction in a quiet title action because the
plaintiff had alleged that the Internal Revenue Service failed
properly to notify the plaintiff of the seizure of its property
in accordance with a notice provision of the Internal Revenue
Code.

545 U.S. at 310.

The plaintiff specifically alleged a

federal notice statute as “an essential element of its [state
law] quiet title claim.”

Id. at 315.

Here, by contrast,

plaintiffs have not alleged violations of any specific federal
laws or regulations, and no federal statute or regulation has
emerged as an “essential element” of the underlying claim.
Rather, plaintiffs have alleged numerous and substantial issues
of state law in both their complaint and their motion.

See,

e.g., Compl. ¶¶ 377, 392; Pls.’ Mot. 2.
Consequently, it does not appear to the court that the
only possible source of a putative duty to avoid filling
suspicious orders lies in letters relied upon only by defendant,
or that plaintiffs’ claims necessarily rely on this duty.

For

one thing, there are no good reasons to believe that the letters
have any binding effect upon distributors.
23

Plaintiffs contend

that “the DEA letter[s] do[] not create a binding effect upon
distributors such as the defendant, and [are] to be construed as
[] mere warning letter[s].”
omitted).

Pls.’ Reply 7 (quotation marks

Defendant concedes that the letters were not binding,

but in apparent contradiction, insists that the letters generate
an “obligation” that must be “heed[ed].”
Pls.’ Reply in Supp. of Mot. to Remand 2.

Def.’s Surreply to
To the extent that

the letters prove relevant, their guidance may of course be
marshalled in support of particular allegations.

The agency

itself, however, has found that the letters were “not intended
to have binding effect but were simply warning letters.”
Masters Pharmaceuticals, 80 Fed. Reg. at 55,475.

Of course,

plaintiffs, not defendant, are “master[s] of the claim.”
Caterpillar, 482 U.S. at 392.
Defendant cannot stipulate a single duty to refuse to
fill suspicious orders, about which defendant is itself
ambivalent, generated merely by DEA letters in order to
bootstrap into federal court a complaint that alleges numerous
specific state-law causes of action.

“[F]ederal jurisdiction is

disfavored for cases . . . which involve substantial questions
of state as well as federal law.”

Bender, 623 F.3d at 1130.

Plaintiffs have alleged violations of numerous West Virginia
statutes and regulations, and the use of the catch-all “United

24

States laws and regulations” does not operate to unlock the
federal courts to the claims at issue here.

Even were there

some indication from the complaint – which there is not – that
federal agency letters provided some binding and relevant duty,
“any doubts concerning the propriety of removal should be
resolved against removal.”

Barbour, 640 F.3d at 617.

Defendant

bears the burden of quieting such doubts and has not done so
here.

Strawn, 530 F.3d at 296.

Defendant has therefore not

made out a case under Grable that all of plaintiffs’ claims
necessarily hinge on the duty to refuse to fill suspicious
orders, and as a consequence, the exercise of removal
jurisdiction is improper.
D.

Closing

For the foregoing reasons, the court will remand this
case to the Circuit Court of Boone County, West Virginia, for
further proceedings.
III.

Costs and Fees

Plaintiffs petition for costs and fees incurred in
filing the instant motion.

See Pls.’ Mot. 18 n.6.

“An order

remanding the case may require payment of just costs and any
actual expenses, including attorney fees, incurred as a result
of the removal.”

28 U.S.C. § 1447(c).
25

According to the Supreme

AT CHARLESTON
THOMAS PARKER,
Plaintiff,
Court, the standard for awarding fees depends on reasonableness:
v.
Civil Action No. 15-14025
“when an objectively reasonable basis [for removal] exists, fees
THE DOW CHEMICAL COMPANY LONG TERM DISABILITY PROGRAM,
an Employee Welfare Benefits Plan,
should be denied.” Martin v. Franklin Capital Corp., 546 U.S.
LIBERTY LIFE ASSURANCE COMPANY OF BOSTON,
a Massachusetts Corporation, and
132, 141 (2005). Although it is a close question, the court is
DOES 1 THROUGH 10, inclusive,
of the opinion that there has been presented an objectively
Defendants.
reasonable basis for removal in this case.
ORDER AND NOTICE

The complaint does

contain a smattering of references to federal law and
Pursuant to L.R. Civ. P. 16.1, it is ORDERED that the
following dates are hereby fixed as the time by or on which
regulations, and the possibility that such references might
certain events must occur:
01/28/2016
Motions under F.R. is not 12(b), together with
raise a substantial federal issue Civ. P. implausible, if remote.
supporting briefs, memoranda, affidavits, or other
such matter in support thereof. (All motions
Consequently, the court will not award costs and fees under 28
unsupported by memoranda will be denied without
prejudice pursuant to L.R. Civ. P. 7.1 (a)).
U.S.C. § 1447(c).
02/08/2016
02/15/2016

Last day for Rule 26(f) meeting.
IV. Conclusion
Last day to file Report of Parties= Planning
Meeting. See L.R. Civ. P. 16.1.

Accordingly, it is ORDERED that plaintiffs’ motion to
02/22/2016
Scheduling conference at 4:30 p.m. at the Robert C.
remand be, and Byrd United States Courthouse in Charleston, before
it hereby is, granted, and plaintiffs’ motion for
the undersigned, unless canceled. Lead counsel
costs and fees directed it hereby is, denied.
be, and to appear.
02/29/2016
Entry of scheduling order.
The Clerk day directed to forward P 26(a)(1) this order
03/08/2016
Last is to serve F.R. Civ. copies of disclosures.
to all counsel of record, any unrepresented parties, and to the
The Clerk is requested to transmit this Order and
Clerk ofto all counsel of record and County, unrepresented
Notice the Circuit Court of Boone to any West Virginia.
parties.
DATED: January 24, 2016
DATED: January 5, 2017
John T. Copenhaver, Jr.
United States District Judge

26