La. Indep. Pharmacies Ass'n, Inc. v. Catamaran Corp.
| Decision Date | 20 March 2015 |
| Docket Number | CIVIL ACTION NO. 14-598-SDD-RLB |
| Parties | LOUISIANA INDEPENDENT PHARMACIES ASSOCIATION, INC. v. CATAMARAN CORPORATION, PRIME THERAPEUTICS, LLC, CAREMARK-PCS HEALTH, LLC, and PERFORMRX, LLC |
| Court | U.S. District Court — Middle District of Louisiana |
Please take notice that the attached Magistrate Judge's Report has been filed with the Clerk of the United States District Court.
In accordance with 28 U.S.C. § 636(b)(1), you have fourteen (14) days after being served with the attached Report to file written objections to the proposed findings of fact, conclusions of law and recommendations therein. Failure to file written objections to the proposed findings, conclusions, and recommendations within 14 days after being served will bar you, except upon grounds of plain error, from attacking on appeal the unobjected-to proposed factual findings and legal conclusions of the Magistrate Judge which have been accepted by the District Court.
ABSOLUTELY NO EXTENSION OF TIME SHALL BE GRANTED TO FILE WRITTEN OBJECTIONS TO THE MAGISTRATE JUDGE'S REPORT.
Signed in Baton Rouge, Louisiana, on March 20, 2015.
/s/_________
RICHARD L. BOURGEOIS, JR.
Before the court is Plaintiff's Motion to Remand. (R. Doc. 11). The motion is opposed. (R. Doc. 14). Plaintiff has filed a Reply. (R. Doc. 17). Plaintiff submitted additional argument in the context of seeking leave to file a Notice of Supplemental Authority. (R. Doc. 20). Defendants submitted additional argument in opposing Plaintiff's motion for leave to file a Notice of Supplemental Authority. (R. Doc. 22). The sole issue is whether the amount in controversy requirement has been satisfied.
The Louisiana Independent Pharmacies Association ("Plaintiff" or "LIPA"), a member-based organization advocating on behalf of independent pharmacies in Louisiana, originally filed this lawsuit against Catamaran Corporation, Prime Therapeutics, CVS Caremark Pharmacy Services, and PerformRX, LLC (collectively, "Defendants"), which are all pharmacy benefits managers ("PBMs"), in the 19th Judicial District Court, East Baton Rouge Parish, Louisiana. (R. Doc. 2-1 at 1-15). Plaintiff alleges that the Defendants have violated various Louisiana statutes and seeks the following declarations:
A. Declare that the PBM Defendants are required to pay the $.10 per prescription fee as mandated by LA. R.S. 46:2625;
B. Declare that the PBM Defendants are required to segregate and list separately on the remittance advice the $.10 per prescription fee as mandated by LA. R.S. 22:1865;
C. Declare that the PBM Defendants are not allowed to conduct audits outside the time period allowed for pharmacies to submit claims mandated by LA. R.S. 2:1856;
D. Declare that the PBM Defendants may not recoup or offset payments outside the parameters of LA. R.S. 22:1859 and LA. R.S. 22:1854; and
E. Declare that ERISA does not preempt application of these statutes.
(R. Doc. 2-1 at 14-15). Plaintiff does not seek monetary relief on behalf of itself or its members.
On September 18, 2014, Defendants removed this action asserting that the court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332(a). (R. Doc. 1). Defendants filed an Amended Notice of Removal the same day. (R. Doc. 2). Defendants allege that there is complete diversity as Plaintiff is a citizen of Louisiana and Defendants are citizens of Minnesota, Delaware, Wyoming, North Dakota, Kansas, Illinois, Florida, Alabama, North Carolina, Rhode Island, Michigan, and Pennsylvania. (R. Doc. 2 at 3-7). Defendants also asserts that the amount in controversy requirement is satisfied based upon the estimated amounts it would cost each Defendant individually to prospectively remit to every pharmacy in Louisiana the $.10 per prescription fee; to segregate and list the $.10 per prescription fee on each remittance advice; and to increase the number of its auditors. (R. Doc. 2 at 8-12). Defendants provide with their Notice of Removal "verifications" by representatives of each individual Defendant confirming the calculated costs of compliance based on state-wide compliance with the statutes. (R. Doc. 2-1 at 16-21).
On October 17, 2014, Plaintiff filed the instant Motion to Remand arguing that the amount in controversy requirement has not been satisfied.
Plaintiff argues that in an action seeking declaratory relief, the amount in controversy should be determined from the value of the benefit to the plaintiff as opposed to the defendants' cost of compliance. To this end, Plaintiff argues that the Fifth Circuit requires the court to employ the "plaintiff-viewpoint" rule, which considers the amount in controversy solely from the perspective of the plaintiff, to calculate the value of the instant action. (R. Doc. 11-1 at 4-6). Furthermore, Plaintiff argues that Defendants improperly seek to aggregate the potential claims of independent Louisiana pharmacies to reach the jurisdictional amount. (R. Doc. 11-1 at 7-8). In short, Plaintiff asserts that Defendants have not met their burden of establishing the amount in controversy from the Plaintiff's perspective and, therefore, remand is warranted. (R. Doc. 11-1 at 8-10).
In opposition, Defendants characterize the Petition as seeking a pure declaration of law, which Defendants argue makes its cost of compliance relevant in determining the amount in controversy. (R. Doc. 14 at 1-6). Defendants urge the court to employ the "either-viewpoint" rule, which allows the court to measure the amount in controversy from either the benefit to the plaintiff or the defendants' cost of compliance, to find that the jurisdictional amount is satisfied. (R. Doc. 14 at 3-5). Defendants also assert that they have not aggregated potential claims to reach the jurisdictional amount. (R. Doc. 14 at 6-7). As an alternative form of relief, Defendants request the opportunity to conduct jurisdictional discovery with regard to the amount in controversy in light of Plaintiff's alleged failure to provide a list of its members. (R. Doc. 14 at 8-11).
In reply, Plaintiff argues that Defendants ignore controlling Fifth Circuit law providing that the plaintiff-viewpoint rule governs declaratory actions. (R. Doc. 17).
A defendant may remove "any civil action brought in a State court of which the district courts of the United States have original jurisdiction." 28 U.S.C. § 1441(a). When original jurisdiction is based on diversity of citizenship, the cause of action must be between "citizens of different States" and the amount in controversy must exceed the "sum or value of $75,000, exclusive of interest and costs." 28 U.S.C. § 1332(a)-(a)(1). Subject matter jurisdiction must exist at the time of removal to federal court, based on the facts and allegations contained in the complaint. St. Paul Reinsurance Co., Ltd. v. Greenberg, 134 F.3d 1250, 1253 (5th Cir. 1998) (). Remand is proper if at any time the court lacks subject matter jurisdiction. See 28 U.S.C. § 1447(c). The removal statute, 28 U.S.C. § 1441, is strictly construed and any doubt as to the propriety of removal should be resolved in favor of remand. Gasch v. Hartford Acc. & Indem. Co., 491 F.3d 278, 281-82 (5th Cir. 2007).
If removal is sought on the basis of diversity jurisdiction, then "the sum demanded in good faith in the initial pleading shall be deemed to be the amount in controversy." 28 U.S.C. § 1446(c)(2). If, however, the Petition seeks "nonmonetary relief" or "State practice . . . does not permit demand for a specific sum" removal is proper "if the district court finds, by the preponderance of the evidence, that the amount in controversy exceeds [$75,000]." 28 U.S.C. § 1446(c)(2)(A)-(B). In Louisiana state court, plaintiffs are generally prohibited from alleging a specific monetary amount of damages sought in their petitions. La. Code Civ. P. art. 893(A)(1). This prohibition on alleging a specific amount of damages, however, "is not applicable to suit ona conventional obligation, promissory note, open account, or other negotiable instrument . . ." La. Code Civ. P. art. 893(B).
The burden of proof is on the removing defendant to establish that the amount in controversy has been satisfied. Luckett v. Delta Airlines, Inc., 171 F.3d 295, 298 (5th Cir. 1999). The defendant may make this showing either (1) "by demonstrating that it is 'facially apparent' that the claims are likely above $75,000, or (2) 'by setting forth the facts in controversy—preferably in the removal petition, but sometimes by affidavit—that support a finding of the requisite amount.'" Id. (quoting Allen v. R & H Oil & Gas Co., 63 F.3d 1326, 1335 (5th Cir. 1995)). If the defendant can produce evidence sufficient to show by a preponderance that the amount in controversy exceeds the jurisdictional threshold, the plaintiff can defeat diversity jurisdiction only by showing to a legal certainty that the amount in controversy does not exceed $75,000. See, e.g., St. Paul Mercury Indem. Co. v. Red Cab Co, 303 U.S. 283, 288-89 (1938); De Aguilar v. Boeing Co, 47 F.3d 1404, 1412 (5th Cir. 1995).
"In actions seeking declaratory or injunctive relief the amount in controversy is measured by the value of the object of the litigation." Leininger v. Leininger, 705 F.2d 727, 729 (5th Cir. 1983).1 When determining which perspective the amount in controversy is calculated, the Fifth Circuit applies this plaintiff-viewpoint rule, which measures the benefit of the action to the plaintiff. See Garcia v. Koch Oil Company of Texas Inc., 351 F.3d 636, 639-40 and n.4 (5th Cir.2003) (); Alfonso v. Hillsborough County Aviation Auth., 308 F.2d 724, 727 (5th Cir. 1962) (...
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