Dawalt v. Purdue Pharma, L.P.

• Decision Date: 07 February 2005
• Docket Number: No. 03-6441.,03-6441.
• Citation: 397 F.3d 392
• Parties: Charles DAWALT; Sue King, on behalf of themselves and all others similarly situated, Plaintiffs-Appellees, v. PURDUE PHARMA, L.P.; Purdue Pharma, Inc.; The Purdue Frederick Company; Purdue Pharmaceuticals L.P.; Abbott Laboratories; Abbott Laboratories, Inc., doing business as Abbott Sales Marketing and Distributing Company; The P.F. Laboratories, Inc.; PRA Holdings, Inc., Defendants-Appellants.
• Court: U.S. Court of Appeals — Sixth Circuit

397 F.3d 392

Charles DAWALT; Sue King, on behalf of themselves and all others similarly situated, Plaintiffs-Appellees, v. PURDUE PHARMA, L.P.; Purdue Pharma, Inc.; The Purdue Frederick Company; Purdue Pharmaceuticals L.P.; Abbott Laboratories; Abbott Laboratories, Inc., doing business as Abbott Sales Marketing and Distributing Company; The P.F. Laboratories, Inc.; PRA Holdings, Inc., Defendants-Appellants.

No. 03-6441.

United States Court of Appeals, Sixth Circuit.

Argued: October 29, 2004.

Decided and Filed: February 7, 2005.

COPYRIGHT MATERIAL OMITTED

ARGUED: John M. Famularo, Stites & Harbison, Lexington, Kentucky, for Appellants. David L. Helmers, David L. Helmers & Associates, Lexington, Kentucky, for Appellees. ON BRIEF: John M. Famularo, Daniel E. Danford, Stites & Harbison, Lexington, Kentucky, Susan Mohler Pope, Frost, Brown & Todd, Lexington, Kentucky, for Appellants. Elizabeth R. Overton, William Gallion & Associates, Lexington, Kentucky, for Appellees.

Before: MERRITT, DAUGHTREY, and SUTTON, Circuit Judges.

OPINION

SUTTON, Circuit Judge.

At issue in this appeal is Congress's deceptively simple prohibition on our review of district court remand orders, see 28 U.S.C. § 1447(d), and the voluminous body of case law it has spawned. Because we interpret the district court's opinion in this case as a remand for lack of subject matter jurisdiction and not as a discretionary remand of pendent state-law claims, we conclude that § 1447(d) bars review of the remand order. That the district court based its remand on a post-removal state-court decision and on post-removal briefing does not, contrary to the defendants' argument, alter this conclusion. Accordingly, we dismiss the appeal of the remand order for lack of appellate jurisdiction.

I.

On November 26, 2001, Charles DaWalt and Sue King (collectively "DaWalt"), both Kentucky citizens and both users of the prescription pain medication OxyContin, sued Purdue Pharma, its subsidiaries and its co-promoters (collectively "Purdue") on behalf of a class of Kentuckians in state court, namely in the Boone County Circuit Court. DaWalt alleged wrongful manufacture, marketing, promotion, sale and distribution of OxyContin, a drug that Purdue developed, patented and, following approval by the Food and Drug Administration in May of 1996, manufactured and promoted.

Broadly speaking, DaWalt's claims fell into two categories, both of which he purported to premise exclusively on state law. DaWalt first sought relief for injuries stemming from Purdue's alleged negligence and fraud. He then asserted a claim for "medical monitoring" under Kentucky law, asking that the court require Purdue to notify people who have received OxyContin of its potential harm; provide for regular medical examinations; create a registry of relevant information; fund further studies of the long-term effects of the drug; and publish and disseminate information to doctors, the medical community in general and class members. Along with premising the complaint on state law, DaWalt sought to ensure that the claims would be heard in state court by stipulating that "the claim for damages of each and every Plaintiff and Class Member is for less than $75,000," the jurisdictional amount-in-controversy requirement for the diversity jurisdiction statute, 28 U.S.C. § 1332. JA 39.

On December 19, 2001, Purdue removed the case to federal district court, claiming that the court had diversity jurisdiction under 28 U.S.C. § 1332 because neither Purdue (nor its subsidiaries nor its co-promoters) were incorporated or had their principal place of business in Kentucky. In the alternative, Purdue invoked the complete-preemption doctrine, claiming that the district court had federal-question jurisdiction under 28 U.S.C. § 1331 because OxyContin was "subject to comprehensive federal regulation." JA 24. In its notice of removal, Purdue further argued that DaWalt's stipulation-which purported to limit damages from "severe disabling" injuries relating to "addiction" and other adverse consequences including "mental, and/or emotional harm, death, and loss of consortium," JA 35, 50, 54 — was ineffective under Sixth Circuit law.

A flurry of motions followed, many of which concerned DaWalt's attempt to rephrase his complaint to avoid the implication that each class member would recover over $75,000. DaWalt, for example, moved to delete all references to "death" and future medical care, remove one reference to "severe" medical problems and exclude punitive damages and attorneys' fees. JA 390, 395, 396, 414, 419. Based on these changes, DaWalt filed a motion to remand on January 18, 2002. Purdue responded that, while it was improper for a party to attempt to improve its chances of obtaining a remand through post-removal pleadings, DaWalt's claims still exceeded the jurisdictional amount-in-controversy requirement.

On March 5, 2002, DaWalt filed a reply memorandum urging the district court not to consider the medical monitoring claims in calculating the amount in controversy because those claims may be invalid under a case then pending before the Kentucky Supreme Court and ultimately decided as Wood v. Wyeth-Ayerst Laboratories, 82 S.W.3d 849 (Ky.2002). Purdue responded by stressing that district courts measure the amount in controversy at the time of removal and that the post-removal discovery that a claim is invalid does not deprive a court of jurisdiction even if the remaining claims do not exceed $75,000. Because Wood was not settled law in Kentucky, Purdue further argued, it could not be said to a legal certainty that the medical monitoring claims were invalid at the time of removal. On August 22, 2002, the Kentucky Supreme Court decided Wood, holding that medical monitoring claims are invalid under Kentucky law absent proof of present physical injury. See 82 S.W.3d at 855. The following month, the district court struck a named defendant, Partners Against Pain, from the complaint because that "defendant" was a website established by Purdue and not a corporate entity or an entity capable of being sued.

A year later, on September 30, 2003, the district court remanded the case for lack of subject matter jurisdiction. The district court first noted that DaWalt's damage stipulation was "of no legally binding consequence and therefore ... insufficient to warrant remand." D. Ct. Op. at 9. Yet even without the stipulation, the court reasoned, DaWalt's claims did not suffice to meet the jurisdictional amount-in-controversy requirement because Wood had "recently [] determined that [medical monitoring] is not a legally recognized cause of action under Kentucky law." Id. at 10. Because Wood precluded medical monitoring claims, the court continued, Purdue had failed to show under Zahn v. International Paper Co., 414 U.S. 291, 94 S.Ct. 505, 38 L.Ed.2d 511 (1973), that the "minimally injured class member" would meet the jurisdictional amount-in-controversy requirement. D. Ct. Op. at 15. The court used this reasoning both to grant Purdue's motion to dismiss the medical monitoring claims and to declare that it had no diversity jurisdiction over the entire case.

The district court next addressed the possibility that Purdue could invoke federal-question jurisdiction under § 1331. After reviewing DaWalt's complaint, the court concluded that the complaint "raise[d] Kentucky state law claims only, that these claims can be decided by looking solely to state law, and that they are not preempted by federal law." Id. at 23.

Lastly, the district court refused to certify the case for interlocutory appeal. Purdue's request for certification, the court stated, "arises from the realization that this Court has concluded that the requisite amount in controversy for all putative class members has not been shown, and therefore that this Court lacks subject matter jurisdiction over these proceedings." Id. at 24. Citing 28 U.S.C. § 1447(d), the court observed that circuit courts typically lack jurisdiction to review such remand orders.

II.

Appeals in which both parties agree that the lower court erred but for which no appellate relief may be obtained are not an everyday occurrence in the courts of appeal. Today, however, that is what the pertinent federal statute requires us to do.

A year after the district court issued its remand order and while Purdue's appeal before this court was pending, our circuit addressed the meaning of 28 U.S.C. § 1367 in Olden v. LaFarge Corp., 383 F.3d 495 (6th Cir.2004). We concluded that Congress's 1990 adoption of § 1367 overruled the Supreme Court's opinion in Zahn and required district courts to aggregate the claims of class members to calculate the amount in controversy for purposes of diversity jurisdiction, a ruling at odds with the district court's jurisdictional holding. While the Supreme Court has subsequently granted review of this issue, see Exxon Corp. v. Allapattah Services, Inc., ___ U.S. ___, 125 S.Ct. 317, ___ L.Ed.2d ___ (2004), both parties agree that this panel is bound by the Olden decision and that, in determining our appellate jurisdiction, we should assume that the district court misconstrued § 1367. The parties also agree that the district court's decision is a final one under 28 U.S.C. § 1291, which grants the courts of appeal jurisdiction to review "final decision[s]" of the district courts.

Yet the acknowledgment of a mistake made in a final decision by a district court, the parties further agree, does not end our inquiry. Just as the mere occurrence of a harm does not open the door to a federal forum, see, e.g., United States v. Bean, 537 U.S. 71, 123 S.Ct. 584, 154 L.Ed.2d 483 (2002), so too the mere fact that a district court erred — no matter how obvious or clear the error — does not permit appellate review, absent a congressional grant of authority, see, e.g., Swint v. Chambers County Comm'n, 514 U.S. 35, 115 S.Ct. 1203, 131 L.Ed.2d 60 (1995). See generally Sheldon v. Sill, 49 U.S....