Coker v. Purdue Pharma Co.

• Decision Date: 23 April 2004
• Docket Number: No. 04-2145-DP.,04-2145-DP.
• Citation: 314 F.Supp.2d 777
• Parties: Dennis COKER, on behalf of himself and of all other persons similarly situated, Plaintiff, v. The PURDUE PHARMA COMPANY, Purdue Pharma L.P., The Purdue Frederick Company, Purdue Pharmaceuticals L.P., and P.F. Laboratories, Inc., Defendants.
• Court: U.S. District Court — Western District of Tennessee

314 F.Supp.2d 777

Dennis COKER, on behalf of himself and of all other persons similarly situated, Plaintiff, v. The PURDUE PHARMA COMPANY, Purdue Pharma L.P., The Purdue Frederick Company, Purdue Pharmaceuticals L.P., and P.F. Laboratories, Inc., Defendants.

No. 04-2145-DP.

United States District Court, W.D. Tennessee, Western Division.

April 23, 2004.

B.J. Wade, Esq., Glassman, Edwards, Wade & Wyatt, P.C., Memphis, TN, for Plaintiff.

James F. Sanders, Esq., William David Bridgers, Esq., Neal & Harwell, PLC, Nashville, TN, Paul W. Schmidt, Christopher N. Sipes, Mark H. Lynch, Timothy C. Hester, Covington & Burling, Washington, DC, for Defendants.

ORDER GRANTING MOTION TO REMAND

DONALD, District Judge.

Before the Court is the motion of Dennis Coker ("Plaintiff") to remand this class action to the Circuit Court for Shelby County, Tennessee. The Purdue Pharma Company, Purdue Pharma L.P., The Purdue Frederick Company, Purdue Pharmaceuticals L.P., and P.F. Laboratories, Inc. (collectively "Defendants" or "Purdue") removed the case to this Court on February 27, 2004, pursuant to 28 U.S.C. § 1441(a), arguing that original federal subject matter jurisdiction exists under 28 U.S.C. §§ 1331 and 1338. For the following reasons, the Court grants Plaintiff's motion to remand.

I. Factual and Procedural Background¹

Plaintiff is an individual citizen of Tennessee. Defendants are corporations or general partnerships organized under the laws of Delaware, New York, or New Jersey. Defendants Purdue Pharma L.P., The Purdue Frederick Company, and The Purdue Pharma Company are in the business of research, development, and sale of pharmaceutical products in the United States. Defendant Purdue Pharmaceuticals L.P. is in the business of manufacturing and formulating medications for sale of pharmaceutical products in the United States. Defendant P.F. Laboratories is in the business of the production of pharmaceutical products in the United States. The named Plaintiff's damages are less than $75,000.00.

Defendants are the owners of several patents² for oxycodone hydrochloride controlled release, which they manufacture and market under the brand-name OxyContin(R) ("OxyContin"). Defendants' OxyContin is one of the best selling severe pain medications in the United States, reaching sales of $1.8 billion annually. It is an opioid analgesic containing a time-release formulation, purportedly so as to release controlled amounts of oxycodone over a twelve-hour period, thus providing continuous pain relief. No generic equivalent to OxyContin is yet available in the marketplace.

In 2000, Defendants filed a patent infringement suit against Endo Pharmaceuticals Holdings Inc. and Endo Pharmaceuticals Inc. (collectively "Endo"), after Endo filed its Abbreviated New Drug Application ("ANDA") for its generic equivalent of OxyContin. The filing of an ANDA grants the manufacturer of the first generic drug to receive approval a 180-day statutory period of market exclusivity during which time the generic drug manufacturer has the right to market its drug absent other generic competition. The generic ANDA applicant must notify the owner of the brand-name drug of the filing of its ANDA and certify, when appropriate, that the patents covering the brand-name drug are either invalid or not infringed by the generic version. The brand-name drug owner need only file a patent infringement lawsuit within forty-five days so as to block the ANDA applicant's generic drug from entering the market for up to thirty months.

After a non-jury trial, Judge Stein of the United States District Court for the Southern District of New York held that Endo's ANDA infringed Purdue's patents for OxyContin, but that Purdue's inequitable conduct before the United States Patent and Trademark Office ("PTO") during prosecution of the OxyContin patents rendered those patents unenforceable. Specifically, Judge Stein found, by clear and convincing evidence, that Purdue committed an intentional misrepresentation in failing to disclose material information inconsistent with its assertions that it had "surprisingly discovered" that its invention reduced the dosage range and eased titration in comparison to other opioid formulations. See Purdue Pharma L.P. v. Endo Pharm. Inc., No. 00 CIV 8029(SHS), slip op. at *20-*27, 2004 WL 257753 (S.D.N.Y. Jan. 5, 2004). This ruling is now on appeal to the U.S. Court of Appeals for the Federal Circuit.

On January 12, 2004, Plaintiff filed a complaint in the Circuit Court for Shelby County, Tennessee. Plaintiff brings this case on behalf of a purported class of "all natural persons in the State of Tennessee who indirectly purchased OxyContin(R) manufactured by Defendants at any time during the period December 1, 1995 to the present." (Compl.¶ 15.) Plaintiff alleges that Defendants established and maintained monopolies, contracts, agreements, combinations, and conspiracies in restraint of trade in the market for OxyContin. Plaintiff further avers that Defendants unlawfully attempted to obtain and enforce such a monopoly through material misrepresentations to the PTO and through sham litigation against potential producers of any generic equivalent of the drug. Plaintiff alleges (1) violations of the Tennessee Trade Practices Act, Tenn.Code Ann. § 47-25-101 et seq.; (2) violations of the Tennessee Consumer Protection Act, Tenn.Code Ann. § 47-18-101 et seq.; and (3) common law monopolization.

Defendants removed to this Court on February 27, 2004, arguing as their basis for removal that, while Plaintiff purports to bring only state law causes of action, federal jurisdiction exists based on (1) a substantial federal question as a necessary element of the state claims and (2) complete preemption of the state claims by the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. ("ERISA"). Plaintiff filed a motion to remand on March 12, 2004, and Defendants responded on March 30, 2004. Plaintiff replied on April 19, 2004.

This case is one of fifty-two antitrust lawsuits filed against Purdue based on its litigation against Endo in the Southern District of New York. These lawsuits all make essentially the same contentions: that Defendants' patent litigation against Endo was a "sham" and that Defendants used improper conduct in prosecuting their patents. Nineteen of the cases were brought in state courts, and Purdue removed all of those. Twenty-seven of the cases are pending in the Southern District of New York, and Purdue seeks transfer of the remaining cases to that district as well. Defendants' motion to transfer this case to the Southern District of New York is currently pending before this Court.³

II. Removal Standard

A defendant may remove a civil case over which the United States district courts would have original jurisdiction. See 28 U.S.C. § 1441(a) (2004). If this Court determines that it would not have had original subject matter jurisdiction over the case, it must remand to state court. See 28 U.S.C. § 1447 (2004). Courts should construe removal statutes strictly. See Alexander v. Elec. Data Sys. Corp., 13 F.3d 940, 949 (6th Cir.1994). The defendant seeking removal bears the burden of establishing federal subject matter jurisdiction. Ahearn v. Charter Township of Bloomfield, 100 F.3d 451, 453-54 (6th Cir.1996).

Under the federal courts' supplemental jurisdiction, if at least one of the plaintiff's claims is removable, then any purely state law claims in the case may also be removed. See 28 U.S.C. §§ 1367, 1441(c) (2004).

III. Substantial Federal Question

Among other grounds,⁴ the district courts have original federal question jurisdiction over actions "arising under the Constitution, laws, or treaties of the United States," and such cases are removable. 28 U.S.C. §§ 1331, 1441(b) (2004). The district courts have exclusive original jurisdiction over actions "arising under any Act of Congress relating to patents ..." 28 U.S.C. § 1338(a) (2004). The U.S. Supreme Court uses the same standard to evaluate the "arising under" language in both § 1331 and § 1338(a). See Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 808-09, 108 S.Ct. 2166, 100 L.Ed.2d 811 (1988).

Under the well-pleaded complaint rule, the plaintiff, as "master of his complaint," can generally control the possibility of removal by asserting only state law claims in the complaint. Alexander, 13 F.3d at 943. Therefore, the majority of federal question cases will be those in which "federal law creates the cause of action." Franchise Tax Bd. of Cal. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 27-28, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983). A corollary rule, however, provides that "a plaintiff may not defeat removal by omitting to plead necessary federal questions in a complaint." Id. at 22, 103 S.Ct. 2841. Under § 1331, therefore, the district courts' jurisdiction extends to "`those cases in which a well-pleaded complaint establishes either that federal law creates the cause of action or that the plaintiff's right to relief necessarily depends on resolution of a substantial question of federal law,' in that `federal law is a necessary element of one of the well-pleaded ... claims.'" Christianson, 486 U.S. at 808, 108 S.Ct. 2166 (quoting Franchise Tax, 463 U.S. at 27-28, 13, 103 S.Ct. 2841). Similarly, under § 1338, the district courts' jurisdiction extends to those cases "in which a well-pleaded complaint establishes either that federal patent law creates the cause of action or that the plaintiff's right to relief necessarily depends on resolution of a substantial question of federal patent law, in that patent law is a necessary element of one of the well-pleaded claims." Christianson, 486 U.S. at 809, 108 S.Ct. 2166. See also City of Chicago v. Int'l Coll. of Surgeons, 522 U.S. 156, 164, 118 S.Ct. 523, 139 L.Ed.2d 525 (1997); Long v. Bando, 201 F.3d 754, 759 (6th Cir.2000).

It is not enough that a federal issue is merely present in a state law...