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From Health Law Daily, August 9, 2018

Suits claiming opioid manufacturers, distributors hid addiction risks remanded to state court

By Robert B. Barnett Jr., J.D.

In two separate but identical suits by various Utah counties alleging that pharmaceutical companies concealed the addiction risks in various prescription opioids they sold in Utah in order to maximize their profits, the Utah federal district court has remanded the cases to state court on the ground that no federal questions were raised in the state law-based lawsuits. In remanding the cases, the federal court rejected the pharmaceutical companies’ argument that a federal question was created by the need for the state law claims to apply duties established by the Controlled Substances Act (CSA) (P.L. 91-513). Resolution of the remand motions was expedited to avoid a likely transfer, if the case remained in federal court, to Ohio federal court where multidistrict litigation is currently pending (Weber County, Utah v. Purdue Pharma, L.P., and Uintah County, Utah v. Purdue Pharma, L.P., August 7, 2018, Shelby, R.).

Background. Weber County filed suit in Utah state court alleging eight state law-based causes of action against numerous companies that manufacture or distribute opioids in that county. Shortly after, Unitah County, Duchesne County, and Daggett County, together with the Tri-County Health Department also filed suit in state court alleging the same eight state law-based causes of actions against the same pharmaceutical companies. In both cases, defendant McKesson Corporation (McKesson), an opioid distributor, removed the cases to federal court, citing federal question subject matter jurisdiction. Its claim was based on a belief that the duties imposed on the opioid distributors arose solely from the Controlled Substances Act and its regulations. In both cases, the counties filed motions to remand to state court, and they sought expedited hearings because of notices they received that their cases might be transferred to existing multidistrict litigation in Ohio. Orders from that court placing a moratorium on all MDL-related filings, including the motions to remand, were thought to be imminent.

Federal question. The court first determined whether the complaint raised substantial federal issues. The allegations certainly referenced federal laws and the pharmaceutical companies’ breaches of those laws. The claims themselves, however, were based only on state laws. The legal duties that the counties alleged were owed were identified as arising from Utah statutes and the common law. As the court said, "At this stage... plaintiffs are the masters of their claims." Even if the counties relied only on a breach of the CSA to establish their state law claims, the court said that it would still find no substantial issue of federal law. To rule otherwise would be to flout Merrell Dow Pharmaceuticals, Inc. v. Thompson, in which the U.S. Supreme Court found no federal question subject matter jurisdiction under similar facts in which the federal law, like the CSA, provided no right of action.

The court next turned to whether McKesson could identify any disputed substantial federal issues. McKesson pointed to the fact that the parties will be required to litigate the contours of duties under the CSA, whether its conduct breached that duty, whether the violations occurred in the counties during the statute of limitations, and whether the counties were harmed. The court pointed out, however, that some distributors have already paid DEA fines and the bulk of the other issues will likely be determined under state law without reference to the CSA. Most importantly, the court noted, McKesson never identified any specific CSA provision that will require court interpretation, let alone a substantial, disputed statutory issue on which the counties’ claims succeed or fail.

The court then turned to whether the federal issues raised in the complaint were substantial. McKesson argued that the CSA’s unified approach for control of the drug industry provided the substantial issue. McKesson expressed concern that any rulings involving the CSA may be inconsistent with rulings involving the MDL. While acknowledging that uniformity may benefit McKesson, the court could not understand how its decision might affect the federal system as a whole, which was the real issue. In this case, therefore, there was no unresolved issue of law that might assist the government in its actions if it were resolved.

Finally, the court turned to whether balancing state and federal judicial responsibilities was served declining federal question jurisdiction. In Merrell Dow, the Supreme Court stated that a combination of the absence of a private right of action and the fact that the statute did not preempt state causes of action was an important indication of Congress’s idea of the scope of jurisdiction under the statute. This court agreed, ruling that the balancing weighed in favor of declining federal jurisdiction—even if a disputed substantial federal question existed in the state law claims.

The courts in both cases, therefore, granted the counties’ motion to remand, with the Weber case remanded to Weber County and the other case remanded to Uintah County.

The cases are Nos. 1:18-cv-00089-RJS and 2:18-cv-00585-RJS.

Attorneys: Colin P. King (Dewsnup, King, Olsen, Worel, Havas, Mortensen) for Uintah County, Duchesne County, Daggett County, and Weber County. Donald J. Winder (Magleby Cataxinos & Greenwood) for Uintah County, Duchesne County and Daggett County. Elisabeth M. McOmber (Snell & Wilmer LLP) for Purdue Pharma LP, Purdue Pharma Inc. and The Purdue Federick Co.

Companies: Uintah County; Duchesne County; Daggett County; Weber County; Purdue Pharma LP; Purdue Pharma Inc.; The Purdue Federick Co.

MainStory: TopStory ControlledNews DrugBiologicNews GCNNews PrescriptionDrugNews UtahNews

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