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DCH Health Care Authority v. Purdue Pharma, L.P.

United States District Court, S.D. Alabama, Southern Division

December 2, 2019

DCH HEALTH CARE AUTHORITY, et al., Plaintiffs,
PURDUE PHARMA L.P., et al., Defendants.



         This matter is before the Court on the plaintiffs' motion to remand. (Doc. 6). The plaintiffs and two defendants (collectively, “Kroger”) have filed briefs in support of their respective positions, (Doc. 7, 11, 13), and the motion is ripe for resolution. Kroger has also filed a motion to stay consideration of the motion to remand pending transfer of this action to the pending multi-district litigation (“MDL”). (Doc. 10). The plaintiffs have filed a response and Kroger a reply, (Docs. 14, 39), and that motion as well is ripe for resolution. After careful consideration, the Court concludes the motion to stay is due to be denied and the motion to remand is due to be granted.


         The 18 plaintiffs operate hospitals in Alabama. The 46 entity defendants are producers, distributors and retailers (all pharmacies) of opioids, and the 20 individual defendants are associated with various of the entity defendants. Kroger is among the retail pharmacy defendants.

         The plaintiffs filed this lawsuit in the Circuit Court of Conecuh County. The complaint asserts six causes of action: (1) negligence; (2) public nuisance; (3) unjust enrichment; (4) fraud and deceit; (5) wantonness; and (6) civil conspiracy. (Doc. 1-1 at 299-324). Kroger timely removed, identifying the bases of subject matter jurisdiction as federal question and the Class Action Fairness Act (“CAFA”). The plaintiffs argue that Kroger has failed to demonstrate jurisdiction under either fount. They further argue that Kroger has not complied with the unanimous consent requirement for removal.


         “On a motion to remand, the removing party bears the burden of showing the existence of federal subject matter jurisdiction.” Connecticut State Dental Association v. Anthem Health Plans, Inc., 591 F.3d 1337, 1343 (11th Cir. 2009); accord City of Vestavia Hills v. General Fidelity Insurance Co., 676 F.3d 1310, 1313 n.1 (11th Cir. 2012).

         Kroger suggests the burden is actually on the plaintiff to show the absence of federal jurisdiction, (Doc. 1 at 5 n.2), but it misreads Breuer v. Jim's Concrete, Inc., 538 U.S. 691 (2003). Section 1441(a) provides that “any civil action … of which the district courts of the United States have original jurisdiction” may be removed, “[e]xcept as otherwise expressly provided by Act of Congress.” Breuer holds only that, pursuant to this statutory language, “whenever the subject matter of an action qualifies it for removal, the burden is on a plaintiff to find an express exception.” 538 U.S. at 698. The burden on the plaintiff, then, is only a burden to find an exception to removal, and that burden arises only after subject matter jurisdiction has been demonstrated by the removing defendant.

         I. Motion to Stay.

         Before addressing the motion to remand, the Court must resolve Kroger's motion to stay consideration of the plaintiffs' motion. Kroger cites a number of sister courts that have declined to consider motions to remand prior to transfer to an MDL court, but Kroger does not acknowledge this Court's opinions setting forth a framework for deciding such a motion to stay.

         “A court should first give preliminary scrutiny to the merits of the motion to remand and, if this preliminary assessment suggests that removal was improper, the court should promptly complete its consideration and remand the case to state court.” Betts v. Eli Lilly and Co., 435 F.Supp.2d 1180, 1182 (S.D. Ala. 2006) (internal quotes omitted); accord Moton v. Bayer Corp., 2005 WL 1653731 at *2 (S.D. Ala. 2005). The Court derived this standard from Meyers v. Bayer AG, 143 F.Supp.2d 1044, 1049 (E.D. Wis. 2001). Dozens of sister courts have adopted or applied Meyers as well, [1] and it has been described as the majority approach. Dunlap v. General Motors LLC, 2016 WL 7391049 at *2 (W.D. Mo. 2016). Kroger presents no reason the Court should abandon its carefully selected standard in this case, and its arguments in favor of a stay are fully addressed by the Court's analysis in Betts. 435 F.Supp.2d at 1182-87.

         As discussed in Parts I and II, federal subject matter jurisdiction is plainly lacking. This absence of jurisdiction was immediately obvious on the Court's preliminary assessment, and the Court therefore proceeds to resolve the motion to remand. Kroger's motion to stay is therefore denied.

         II. Federal Question.

         The complaint asserts six causes of action, all of them sounding in state law. That is not the end of the matter, because “federal jurisdiction over a state 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.” Gunn v. Minton, 568 U.S. 251, 258 (2013); accord Grable & Sons Metal Products, Inc. v. Darue Engineering & Manufacturing, 545 U.S. 308, 314 (2005). Kroger argues that the complaint's claims against the distributor and retail defendants “require Plaintiffs to establish that Defendants breached duties established exclusively under federal law.” (Doc. 1 at 11). Kroger identifies the relevant federal law as the Controlled Substances Act (“CSA”) and concludes that “the Complaint necessarily raises a federal issue: whether the Distributor Defendants violated the CSA.” (Id. at 12).

         The complaint contains numerous references to the CSA, but that does not of itself establish that the complaint “necessarily raise[s]” a federal issue. The Supreme Court has addressed the meaning of this phrase in the context of Section 1338(a), which provides for federal jurisdiction “of any civil action arising under any Act of Congress” relating to patent and related intellectual property concepts: “[A] claim supported by alternative theories in the complaint may not form the basis for § 1338(a) jurisdiction unless patent law is essential to each of those theories.” Christianson v. Colt Industries Operating Corp., 486 U.S. 800, 810 (1988) (emphasis added). Because “Section 1338(a) uses the same operative language as 28 U.S.C. § 1331, … ‘[l]inguistic consistency' requires us to apply the same test to determine whether a case arises under § 1338(a) as under § 1331.” Holmes Group, Inc. v. Vornado Air Circulation Systems, Inc., 535 U.S. 826, 829-30 (2002) (quoting Christianson, 486 U.S. at 808). Appellate courts have routinely applied Christianson in the Section 1331 context.[2] Although the plaintiffs relied on this case in support of their motion to remand, (Doc. 7 at 14-15), Kroger has failed to acknowledge Christianson or explain how removal is not defeated by its “alternative theories” principle.

         Kroger identifies the duties imposed by the CSA and its implementing regulations, as referenced in the complaint, as duties to implement effective controls against the diversion of opioids, to monitor, investigate and report suspicious orders, and to suspend fulfillment of such orders. (Doc. 1 at 9-10, 11). The Court agrees that the complaint asserts the existence of such duties imposed by federal law; the question is whether the complaint pegs the liability of any defendant under any pleaded cause of action exclusively to the violation of this federal law.

         According to Kroger, the complaint affirmatively states that it is the violation of these federally imposed duties that gives rise to the six asserted causes of action. (Doc. 11 at 12). None of the paragraphs cited by Kroger remotely support this proposition. On the contrary, it appears from a review of the complaint that the duties imposed by the CSA are mentioned largely to demonstrate how clear those duties - running parallel to comparable state duties - are and thus to accentuate how inexcusable was the alleged conduct of these large entity defendants, which operate on a massive and typically national scale.

         In only one place does the complaint identify the CSA as a source of duty underlying an asserted claim. Count One, sounding in negligence, relies in part on negligence per se, and one of the statutes, violation of which is alleged to establish negligence per se, is the CSA. (Doc. 1-1 at 299-302). To that extent, the complaint relies on federal law to establish negligence. Count One, however, also relies on Alabama statutes and regulations to establish negligence per se. ...

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