Moore ex rel. State of Miss. v. Abbott Laboratories

• Court: U.S. District Court — Southern District of Mississippi
• Citation: Moore ex rel. State of Miss. v. Abbott Laboratories, 900 F.Supp. 26 (S.D. Miss. 1995)
• Decision Date: 22 September 1995
• Docket Number: Civ. A. No. 3:95-CV-78BN.
• Parties: Mike MOORE, Attorney General ex rel. STATE OF MISSISSIPPI, Plaintiff, v. ABBOTT LABORATORIES, INC., Bristol-Myers Squibb Co. and Mead Johnson & Co., Defendants.

900 F. Supp. 26

Mike MOORE, Attorney General ex rel. STATE OF MISSISSIPPI, Plaintiff, v. ABBOTT LABORATORIES, INC., Bristol-Myers Squibb Co. and Mead Johnson & Co., Defendants.

Civ. A. No. 3:95-CV-78BN.

United States District Court, S.D. Mississippi, Jackson Division.

September 22, 1995.

COPYRIGHT MATERIAL OMITTED

John W. Barrett, Edward Sanders, Barrett Law Offices, Lexington, MS, for Mike Moore.

Ross F. Bass, Jr., Michael B. Wallace, Phelps Dunbar, Jackson, MS, for Abbott Laboratories and Mead Johnson & Co.

William F. Goodman, Jr., Lynn Plimpton Risley, Watkins & Eager, Jackson, MS, for Bristol-Myers Squibb and Company and Mead Johnson & Co.

OPINION AND ORDER

BARBOUR, Chief Judge.

This cause is before the Court on the following motions: (1) Plaintiff's Motion to Remand; (2) Defendants' Motion for Leave to File Surreply Memorandum; and (3) Plaintiff's Application for Review and Objections to Magistrate Judge's Order Denying Motion to Quash and for Protective Order. Having considered the Motions, Responses, all attachments to each and supporting and opposing memoranda, the Court finds that (1) Plaintiff's Motion to Remand is well taken and should be granted; (2) Defendants' Motion for Leave to File Surreply Memorandum is well taken and should be granted; and (3) Plaintiff's Application for Review and Objections to Magistrate Judge's Order Denying Motion to Quash and for Protective Order is moot and therefore denied.

I. Factual Background and Procedural History

Plaintiff filed this action on January 18, 1995, in the Circuit Court of Holmes County, Mississippi.¹ Defendants are pharmaceutical companies that manufacture and sell infant formula nationally, including in the State of Mississippi. According to the Plaintiff, Defendants share approximately eighty percent of the Mississippi infant formula market. Plaintiff further asserts the following:

For over twelve years, from 1980 through 1992, defendants abused their overwhelming dominance of the infant formula market by independent action and agreement among themselves, whereby they grossly overcharged Mississippi consumers for infant formula. Complaint at ¶ 15.

The substantial terms of defendants' conspiracy consisted of an agreement to fix the wholesale price of infant formula sold throughout the United States, including that sold in Mississippi. Complaint at ¶ 20. Defendants' illegal conspiracy and agreement caused the price of infant formula to increase over 120 percent during the last ten years, while the price of milk, infant formula's principal ingredient, rose only 36 percent. Complaint at ¶ 16. Because retailers determine their prices based on defendants' wholesale prices, the retail price of infant formula is directly affected by the wholesale prices charged by defendants. Complaint at ¶ 13. Therefore, as a direct result of defendants' illegal conspiracy, plaintiffs and class members paid more for infant formula than they would have absent defendants' illegal conduct. Complaint at ¶ 27-28.

Memorandum of Law in Support of Plaintiff's Motion to Remand at 1-2.

The Plaintiff in this matter is the Attorney General of the State of Mississippi who is suing on behalf of the State and as parens patriae on behalf of Mississippi citizens injured by Defendants' alleged misconduct. On behalf of the State, the Attorney General claims that Defendants' actions had the effect of requiring the State to pay artificially high prices for infant formula for the Mississippi Women, Infants and Children (WIC) Program. Plaintiff asserts that Defendants have thus violated certain provisions of the Mississippi antitrust statute, specifically Miss.Code Ann. §§ 75-21-1 and 75-21-3. Plaintiff seeks recovery for such violations under Miss.Code Ann. § 75-21-7, which sets forth certain penalties for violation of the Mississippi antitrust laws, and Miss.Code Ann. § 75-21-9, seeking a penalty of $500 for each instance of injury to the State.

Plaintiff also alleges violations of the Mississippi Consumer Protection Act, specifically Miss.Code Ann. § 75-24-5, asserting that Defendants have engaged in unfair competition and unfair or deceptive trade practices. As a result of Defendants' alleged wrongful actions, Plaintiff asserts that the State and the citizens of the State have paid more for infant formula than they would have paid in the absence of Defendants' alleged unlawful conduct. Plaintiff asserts a right to recover damages pursuant to Miss.Code Ann. § 75-24-15, in his capacity as parens patriae for the Mississippi citizens who have been injured by Defendants' alleged wrongful conduct.²

On February 17, 1995, Defendants removed this action to this Court on grounds of diversity of citizenship and federal question jurisdiction. Each of Defendants is a foreign corporation organized and existing under the laws of a state other than Mississippi. Defendants assert that the State of Mississippi, on whose behalf Mike Moore brought this suit, is not the real party in interest, and that the Attorney General has no parens patriae authority to bring suit on behalf of the citizens of the State. The real parties in interest, according to Defendants, are the private individuals who bought infant formula between 1980 and 1992, and these are the persons whose citizenship matters for the purposes of 28 U.S.C. § 1332. Defendants further assert that Plaintiff has engaged in artful pleading to avoid federal jurisdiction, and that Plaintiff's claims are not cognizable under Mississippi law.

II. Analysis

28 U.S.C. § 1441(a) provides in relevant part as follows:

Any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or defendants, to the district court of the United States for the district and division embracing the place where such action is pending.

28 U.S.C. § 1441(a). "The removing party bears the burden of establishing federal jurisdiction." Laughlin v. Prudential Ins. Co., 882 F.2d 187, 190 (5th Cir.1989) (citation omitted). Whether a case is removable must be determined by reference to the allegations made in the original pleadings. Wheeler v. Frito-Lay, Inc., 743 F.Supp. 483, 485 (S.D.Miss.1990).

A. Eleventh Amendment Immunity

The Eleventh Amendment to the United States Constitution provides that "the Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State." The United States Supreme Court has interpreted this amendment on many occasions to determine when a suit is one against the State. See, e.g., Pennhurst State Sch. & Hosp. v. Halderman, 465 U.S. 89, 104 S.Ct. 900, 79 L.Ed.2d 67 (1984). That Court has held that "`an unconsenting State is immune from suits brought by her own citizens as well as citizens of another state.'" Id. at 100, 104 S.Ct. at 908 (quoting Employees v. Missouri Dept. of Public Health & Welfare, 411 U.S. 279, 280, 93 S.Ct. 1614, 1616, 36 L.Ed.2d 251 (1973)). The Plaintiff in this matter asserts that "the proscriptions of the Eleventh Amendment apply with equal force to a suit brought against a state in federal court, and a suit brought by a state in state court which is removed to federal court." Memorandum in Support at 16-17. Defendants do not directly address the issue of the Eleventh Amendment in their submissions to this Court.³

The Court has extensively researched this question and has found only a few federal court cases which even mention this issue. The Court has found only one case, however, which actually bases its ruling on the Eleventh Amendment issue. In California v. Steelcase Inc., 792 F.Supp. 84 (C.D.Cal.1992), the court addressed the issue of Eleventh Amendment immunity where the plaintiff is the state and the case has been removed by the defendants. The court first concluded that the state is not a citizen of itself for diversity purposes. Id. at 86 (citing Moor v. County of Alameda, 411 U.S. 693, 717, 93 S.Ct. 1785, 1799, 36 L.Ed.2d 596 (1973)). The court then addressed the Eleventh Amendment immunity issue:

Defendant, relying on the literal wording of the Eleventh Amendment, contends that this is not a "suit ... against one of the United States ..." (emphasis added) because the State is the plaintiff. However, since the immunity granted by the Eleventh Amendment is an immunity from being made an involuntary party to an action in federal court, it should apply equally to the case where the state is a plaintiff in an action commenced in state court and the action is removed to federal court by the defendant.

The statute under which this action was removed requires, for an action to be removable, that the district courts "have original jurisdiction" over the action. 28 U.S.C. § 1441(a). Because of the jurisdictional bar of the Eleventh Amendment, the district courts would not have original jurisdiction over this action, absent the consent of the State. The State does not consent to removal. Therefore, subject matter jurisdiction is lacking, at least as to the claim under the unfair competition statute.

Id. at 86; but see South Dakota State Cement Plant Comm'n v. Wausau Underwriters Ins. Co., 778 F.Supp. 1515, 1522 (D.S.D. 1991) (declining to address the Eleventh Amendment claim with the State as the plaintiff in a motion to remand concluding that "the contention that the Eleventh Amendment nevertheless has bearing upon this Court's jurisdiction is not supported by any authority cited by either party").

The Court finds the reasoning of the Steelcase court to be sound. By removing this matter to federal court, Defendants have involuntarily subjected the State of Mississippi to the jurisdiction of this Court. Because the State does not consent to this removal, the Court finds that it lacks subject matter jurisdiction over this action due to the Eleventh Amendment...