City of Henderson v. Purdue Pharma L.P.
| Decision Date | 27 January 2020 |
| Docket Number | Civil No. 3:19-cv-00068-GFVT,Civil No. 3:19-cv-00067-GFVT |
| Parties | CITY OF HENDERSON, KENTUCKY, et al., Plaintiffs, v. PURDUE PHARMA L.P., et al., Defendants; and HARDIN COUNTY FISCAL COURT, et al., Plaintiffs, v. PURDUE PHARMA L.P., et al., Defendants. |
| Court | U.S. District Court — Eastern District of Kentucky |
These two substantially similar cases were both filed in state court on September 13, 2019 and subsequently removed by Defendant Beverly Sacker. [See, e.g., R. 1, 3:19-cv-00067-GFVT.]1 These matters are now before the Court on two pending motions, filed in each case: The Defendant Commonwealth of Kentucky's Motion to Dismiss [R. 108], and the Defendant McKesson Corporation's Motion to Stay further proceedings pending a ruling by the Judicial Panel on Multidistrict Litigation (JPML) concerning the transfer of these actions to a consolidated Multidistrict Litigation (MDL) case, In re: National Prescription Opiate Litigation, MDL No. 2804. [R. 106.] For the reasons explained below, both the Motion to Dismiss and Motion to Stay will be GRANTED in each case.
These two cases are related to hundreds of other lawsuits that have been filed throughout the country in recent years. In these lawsuits, plaintiffs typically allege that certain defendants misrepresented the safety and the addictive properties of prescription opioids, failed to comply with relevant legal standards and requirements, and engaged in deceptive conduct that resulted in prescription opioids being over-distributed and over-prescribed. On December 5, 2017, the JPML determined that a large number of cases related to these allegations should be centralized for pretrial proceedings and formed MDL 2804 in the Northern District of Ohio to coordinate the resolution of these actions. See In re Nat'l Prescription Opiate Litig., 290 F. Supp. 3d 1375, 1378 (JPML 2017). Since that time, well over 2,000 cases have been transferred to the MDL Court. See In re Nat'l Prescription Opiate Litig., No. 1:17-MD-2804, 2019 WL 4686815, at *1 (N.D. Ohio Sept. 26, 2019).
The two cases before the Court were originally filed by Plaintiffs in Franklin County Circuit Court, Franklin County, Kentucky on September 13, 2019. [R. 1-2.] Defendant Sackler subsequently removed to federal court under the Class Action Fairness Act of 2005 (CAFA), 28 U.S.C. § 1332(d). [R. 1.] After the initial removal, Defendant McKesson filed a supplemental notice of removal, asserting that removal via 28 U.S.C. § 1441 was also proper on the basis of federal question jurisdiction under 28 U.S.C. § 1331 and, relatedly, asserting supplemental jurisdiction under 28 U.S.C. § 1367(a). [R. 81 at 6, 18.] The JPML then issued a Conditional Transfer Order identifying the present cases as "involv[ing] questions of fact that are common to the actions previously transferred to" the MDL Court. [R. 106-2.] Following removal, and pending the final determination by the JPML of whether these cases should be consolidated, numerous motions have been filed which now require the Court's attention.
On October 28, 2019, shortly after these actions were removed, Plaintiffs in each case filed a motion to remand to state court.2 [R. 85.] Defendant McKesson responded in opposition to those motions and has now also moved to stay further proceedings pending the imminent determination by the JPML. [R. 106.] Additionally, Defendant Commonwealth of Kentucky filed motions to dismiss the claims against it in each case. [R. 108.] Both Plaintiffs and Defendant Commonwealth have also filed motions to expedite the rulings regarding their respective motions. [R. 86; R. 109.] These motions have now been fully briefed, the Court has considered the arguments of the parties and applicable law, and this Opinion is the result.
The Court will first address Plaintiffs' motions for remand and Defendant McKesson's competing motions to stay pending potential transfer to the MDL. [R. 85; R. 106.] McKesson wishes to stay all proceedings, including the remand motions, until the JPML finally resolves the transfer issue. [R. 106 at 1.] On the other hand, Plaintiffs argue this Court should rule on its motions to remand before the JPML concludes that process. [R. 85 at 1; R. 119 at 2.]
The decision whether to grant a stay is discretionary because "the power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants." Landis v. N. Am. Co., 299 U.S. 248, 254 (1936) (Cardozo, J.); Meyers v. Bayer AG, 143 F. Supp. 2d 1044, 1047 (E.D. Wis. 2001) (). As relevant in the present context, the Manual for Complex Litigation notes that a "stay pending the Panel's decision can increase efficiency and consistency, particularly when the transferor court believes that a transfer order is likely and when the pending motions raise issues likely to be raised in other cases as well." Manual for Complex Litigation (4th ed.) § 22.35 (2005). Further, 28 U.S.C. § 1407 specifically authorizes the JPML to transfer cases even when there is a motion to remand pending in the district court, although the JPML's consideration of transfer does not deprive the district court of its own inherent authority to rule on the remand motion itself. See Judicial Panel on Multidistrict Litigation, Rule 2.1(d). Therefore, this Court has the power to resolve the instant motions despite the ongoing JPML process. The issue here is whether to exercise the Court's discretion to issue a temporary stay in each of these cases or to immediately remand to state court.
In making this determination, the Court notes that some courts choose to rule on pending motions to remand before the JPML decides to transfer the case, while many other courts decide to issue a stay pending the JPML's decision even when a motion to remand is also pending. Compare, e.g., Kantner v. Merck & Co., 2005 WL 277688 (S.D. Ind. Jan. 26, 2005) (); with Benge v. Eli Lilly & Co., 553 F. Supp. 2d 1049 (N.D. Ind. 2008) (); Aetna U.S. Healthcare, Inc. v. Hoechst Aktiengesellschaft, 48 F. Supp. 2d 37, 43 (D.D.C. 1999) (same); Rivers v. The Walt Disney Co., 980 F. Supp. 1358 (C.D. Cal. 1997) (same). Indeed, as briefed at length by the parties, in many cases related to the litigation at hand courts have also issued stays while others have chosen to remand the case before the question of transfer is fully resolved. [See R. 106-3 through R. 106-18 (); R. 119 at 3 n. 3, 5 ().] Invariably, however, courts consider the interests of judicial economy and potential prejudice or hardship to the parties—an inquiry which is necessarily specific to the individual facts and procedural posture of each case, and which is likely the main cause for the apparent divergence of approaches.
In considering the present cases, the Court finds persuasive the extensive and thoughtful explanation behind the approach adopted in Meyers v. Bayer AG. 143 F. Supp. 2d at 1049. In that case, the court employed an approach by which the district court makes a preliminary assessment of jurisdiction, and if, upon such assessment, jurisdiction is clearly improper, "the court should promptly complete its consideration and remand the case to state court." Id. If jurisdiction is not clearly improper, the district court is then to turn to additional considerations in making its stay determination. Id. Although not binding, this reasoned approach also seems consistent with guidance concerning the MDL process in general, which provides that a primary reason for denying a stay pending the panel's decision on transfer is when federal jurisdiction is clearly absent. Manual for Complex Litigation (4th ed.) § 22.35.
In light of the JPML's pending decision concerning the previously issued conditional transfer order, the appropriate inquiry here is not necessarily the eventual possibility that these cases could be remanded to state court, but rather whether there is any reasonable possibility that federal jurisdiction exists. Stated otherwise, this Court will inquire as to whether federal jurisdiction is clearly absent. Manual for Complex Litigation (4th ed.) § 22.35; see also Meyers, 143 F. Supp. 2d at 1047-52. This preliminary assessment of jurisdiction is critical because, after all, the jurisdictional question is about the Court's very power to decide the case. If federal jurisdiction is clearly absent, then the court should complete its consideration and remand the case to state court. Meyers, F. Supp. 2d at 1049. If, however, "the jurisdictional issue appears factually or legally difficult," the court should "determine whether identical or similar jurisdictional issues have been raised in other cases that have been or may be transferred to the MDL proceeding." Id. If so, the court should proceed to the third step of weighing the relevant factors to be considered in determining whether to grant the motion to stay. Id. Thus, the Court first will assess the clarity of federal jurisdiction and resolve the present motions to stay accordingly.
A preliminary assessment of jurisdiction in these cases does not reveal that federal jurisdiction is clearly absent. In the motions for remand, Plaintiffs attack both bases for removal relied upon by Defendant McKesson, removal under CAFA, 28 U.S.C. § 1332(d), and removal on the basis of federal question...
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