New Mexico ex rel. Balderas v. Gilead Scis., Inc.
| Citation | 548 F.Supp.3d 1098 |
| Decision Date | 06 July 2021 |
| Docket Number | No. 1:21-CV-00255-WJ-LF,1:21-CV-00255-WJ-LF |
| Parties | State of NEW MEXICO, EX REL. Hector H. BALDERAS, Attorney General, Plaintiff, v. GILEAD SCIENCES, INC., Gilead Sciences, LLC (f/k/a Bristol-Myers Squibb & Gilead Sciences, LLC ), Bristol-Myers Squibb, and Teva Pharmaceuticals USA, Inc., Defendants. |
| Court | U.S. District Court — District of New Mexico |
Brian L. Moore, NM Office of the Attorney General, Marcus J. Rael, Jr., Robles, Rael & Anaya, PC, Albuquerque, NM, Annemieke Monique Tennis, Pro Hac Vice, Conlee Whiteley, Pro Hac Vice, Kanner and Whiteley, L.L.C., New Orleans, LA, Cholla Khoury, New Mexico Attorney Genderal's Office, Santa Fe, NM, for Plaintiff.
Heather Marie Burke, White & Case LLP, Palo Alto, CA, Peter Carney, Pro Hac Vice, Christopher Curran, Pro Hac Vice, White & Case LLP, Washington, DC, Michelle A. Hernandez, Modrall Sperling Roehl Harris & Sisk PA, Albuquerque, NM, for Defendants Gilead Sciences, Inc., Gilead Sciences, LLC.
Anne P. Davis, Christine J. Choi, James L. Cooper, Laura S. Shores, Arnold & Porter Kaye Scholer, LLP, Washington, DC, Benjamin W. Allison, Justin W. Miller, Paul G. Bardacke, Bardacke Allison LLP, Santa Fe, NM, Daniel B. Asimow, Arnold & Porter Kaye Scholer, LLP, San Francisco, CA, for Defendant Bristol-Myers Squibb.
Andrew G. Schultz, Rodey Dickason Sloan Akin & Robb, P.A., Albuquerque, NM, Christopher T. Holding, Pro Hac Vice, Molly R. Grammel, Pro Hac Vice, Goodwin Procter LLP, Boston, MA, for Defendant Teva Pharmaceuticals USA, Inc.
THIS MATTER comes before the Court on Plaintiff State of New Mexico's ("New Mexico," or the "State") Motion to Remand, filed April 22, 2021 (the "Motion") (Doc. 34 ). Defendants Gilead Sciences, Inc. and Gilead Sciences, LLC (together "Gilead") and Bristol-Myers Squibb ("BMS") responded on May 13, 2021. Doc. 56. Briefing was completed on May 27, 2021. Docs. 59 & 60. In ruling on the Motion, the Court also considered Gilead and BMS's Motion to Transfer or, in the alternative, to Stay. Docs. 31, 32, 33. The Court, having considered the relevant motions and memoranda, the applicable law, and otherwise being fully advised in this matter, finds that New Mexico's Motion to Remand is well-taken and, therefore, is GRANTED. Consequently, Defendants’ Motion to Transfer or, in the alternative, to Stay is DENIED as MOOT. Further, pursuant to 28 U.S.C. § 1447(c), the Court DENIES New Mexico's request that it be awarded just costs and actual expenses, including attorney fees, incurred as a result of the removal.
New Mexico initiated this action1 against Gilead, BMS, and Teva Pharmaceuticals, U.S.A. ("Teva") on February 24, 2021, when it filed a Complaint for Violations of New Mexico's Antitrust Act and Unfair Practices Act (the "Complaint," Doc. 1-2) in the First Judicial District Court, County of Santa Fe, New Mexico, as Case No. D-101-CV-2021-00377. The Complaint alleges: (a) two counts of Unreasonable Restraint of Trade, in violation of the New Mexico Antitrust Act (the "NM Antitrust Act"), NMSA 1978 § 57-1-1 ; (b) one count of Unlawful Monopolization, in violation of the NM Antitrust Act, NMSA 1978 § 57-1-2 ; (c) one count of Unlawful Attempted Monopolization, in violation of the NM Antitrust Act, NMSA 1978 § 57-1-2 ; (d) two counts of Conspiracy to Monopolize, in violation of the NM Antitrust Act, NMSA 1978 § 57-1-2 ; and (e) one count of Violations of the New Mexico Unfair Practices Act ("NMUPA"), NMSA 1978 § 57-12-1.
On its face, the Complaint seeks no relief under federal law and specifically disavows any implied federal claims.2 See Compl. ¶¶ 23, 29. New Mexico alleges that Defendants engaged in "long-running fraudulent and coordinated schemes, unlawful restraints of trade, and deceptive business practices" with the goal and result of "curtailing generic competition" and "excessively inflated pricing" for HIV treatments Viread, Truvada, Atripla
, Vemlidy, and Descovy.3 medications"). Compl. ¶ 2. The Complaint's core factual underpinnings concern: "sham" patent litigations in the Southern District of New York between Gilead and Teva, which resulted in the parties entering into "reverse payment" settlement agreements (Counts I and V); the joint venture agreement between Gilead and BMS (Counts II and VI); the alleged delay in launching tenofovir alafenamide fumarate ("TAF") and pre-exposure prophylaxis products (Counts III and IV); and violations of the New Mexico Unfair Practices Act (Count VII). New Mexico seeks damages, including restitution and disgorgement of the Defendants’ allegedly unlawful profits, and an order enjoining Defendants from continuing the alleged deceptive and unlawful acts. Compl. at 125–26.
On March 23, 2021, Defendant Gilead Sciences, Inc. removed this action pursuant to 28 U.S.C. §§ 1331 and 1441(a), alleging that New Mexico's claims raise substantial federal issues concerning: (a) patent validity and infringement under federal patent law; (b) the Hatch-Waxman Act, 21 U.S.C. § 355(j), a law governing competition between branded and generic pharmaceuticals; (c) the FDA regulatory scheme; and (d) the federal Medicaid scheme as it relates to government payors. Doc. 1 at 5–15. If properly proved, these allegations would allow a federal court to find an embedded "federal question" that would confer the proper subject matter jurisdiction.
In addition to arguing against remand, Defendants use the Response brief to ask that the Court first rule on the Motion to Transfer, or in the Alternative, to Stay before addressing the Motion to Remand. Doc. 56 The Court declines this request because, under these circumstances, transferring the case prior to deciding the remand issue would unnecessarily strain judicial resources in the Northern District of California, the putative transferee court. Stated another way, the remand issue should be decided by the undersigned judge instead of punting the remand issue, involving questions of New Mexico law, to a district judge in the Northern District of California for decision.
Kokkonen v. Guardian Life Ins. Co. , 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994) ; see also State of New Mexico ex rel. Balderas v. Preferred Care, Inc. , 158 F. Supp. 3d 1226, 1229 (D.N.M. 2015) () (internal quotation omitted). Having limited jurisdiction, federal courts do not presume jurisdiction to exist but require an adequate showing of jurisdiction from the party invoking it. U.S. ex rel. King v. Hillcrest Health Ctr., Inc. , 264 F.3d 1271, 1278 (10th Cir. 2001) (internal citation omitted); see also Kokkonen , 511 U.S. at 377, 114 S.Ct. 1673 (). The parties asserting jurisdiction, here Gilead and BMS, are held to a preponderance of the evidence standard for this showing. McPhail v. Deere & Co. , 529 F.3d 947, 955 (10th Cir. 2008). If Gilead and BMS fail to make a proper showing, then this case must be remanded to state court. See 28 U.S.C. § 1447.
Gilead Sciences, Inc. anchors its removal to § 1331, the "general federal-question statute," Michigan v. Bay Mills Indian Cmty. , 572 U.S. 782, 787 n.2, 134 S.Ct. 2024, 188 L.Ed.2d 1071 (2014), which gives district courts original jurisdiction over "all civil actions arising under the Constitution, laws, or treaties of the United States." Under the long-standing doctrine of the "well-pleaded complaint rule," federal question jurisdiction "exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint." Caterpillar, Inc. v. Williams , 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987). The plaintiff is the "master" of the complaint and may keep an action in state court by relying exclusively on state law. Id. The anchoring federal question must be apparent on the face of the complaint rather than in any subsequent pleading or the notice for removal. Mountain Fuel Supply Co. v. Johnson , 586 F.2d 1375, 1380 (10th Cir. 1978). Stated another way, "a defendant may not remove a case to federal court unless the plaintiff's complaint establishes that the case ‘arises under’ federal law." Franchise Tax Bd. v. Constr. Laborers Vacation Trust , 463 U.S. 1, 10, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983) (internal citation omitted). Causes of action under state law may "arise under" federal law for purposes of § 1331 even when the complaint does not explicitly plead a federal cause of action if the four-pronged Grable / Gunn test4 is met. Under this test, "federal jurisdiction over a state law claim will lie if a federal issue is: (1) necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal court without disrupting the federal-state balance approved by Congress." Gunn v. Minton , 568 U.S. 251, 258, 133 S.Ct. 1059, 185 L.Ed.2d 72 (2013). The United States Supreme Court's decisions on this type of "arising under" jurisdiction have suggested that the recognition of jurisdiction absent a federal cause of action is of limited scope, noting that only a "slim category" of cases satisfy the Grable / Gunn test. Empire Healthchoice Assurance, Inc. v. McVeigh , 547 U.S. 677, 701, 126 S.Ct. 2121, 165 L.Ed.2d 131 (2006). The Supreme Court has stressed that "it takes more than a federal element to open the arising under door," id. , and that mere allegations of a "federal issue" are not a "password opening federal courts to any state action embracing a point of...
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Aetna Inc. v. Gilead Scis., Inc.
...question jurisdiction under Grable in a case that is largely the same as that brought by Aetna. See N.M. ex rel. Balderas v. Gilead Scis., Inc. , 548 F. Supp. 3d 1098 (D.N.M. 2021). In Balderas , the state of New Mexico sued Gilead, BMS, and Teva based on, inter alia , (1) reverse payment s......