County of Santa Clara v. GSK

238 F. Supp. 3d 723, 2017 WL 772866, 2017 U.S. Dist. LEXIS 27566
CourtDistrict Court, E.D. Pennsylvania
DecidedFebruary 28, 2017
DocketMDL NO. 1871; 07-MD-01871; 10-CV-1637
StatusPublished
Cited by5 cases

This text of 238 F. Supp. 3d 723 (County of Santa Clara v. GSK) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
County of Santa Clara v. GSK, 238 F. Supp. 3d 723, 2017 WL 772866, 2017 U.S. Dist. LEXIS 27566 (E.D. Pa. 2017).

Opinion

[724]*724MEMORANDUM OPINION

Rufe, District Judge.

1. Introduction

Plaintiff has filed a Motion Appealing the Twenty-Fourth Report and Recommendation of the Special Master (“R & R 24”). R & R 24 addressed an unusual situation: five years into this litigation, in a case that was filed in—rather than removed to—federal court, Plaintiff filed a Motion to Dismiss the case for lack of subject matter jurisdiction, claiming that the parties were not completely diverse at the outset of the case, and therefore this Court lacks subject matter jurisdiction over the case.1 R & R 24 concluded that jurisdiction was and is proper in this case.

Upon consideration of Plaintiffs Motion appealing the R & R, Defendant’s Response, and Plaintiffs Reply, and pursuant to this Court’s power to conduct a de novo review of proposed recommendations to which objections are made,2 the Court will [725]*725approve and adopt R & R 24 for the reasons set forth below.

II. Background

The Avandia Multidistriet Litigation (“MDL 1871”) was created by the United States Judicial Panel on Multidistrict Litigation, pursuant to 28 U.S.C. § 1407, to consolidate cases in federal court that “arise from allegations that certain diabetes drugs manufactured by [Defendant GlaxoSmithKline]—Avandia and/or two sister drugs containing Avandia (Avan-damet and Avandaryl)—cause an increased risk of heart attack and other physical injury, and that GSK failed to provide adequate warnings concerning that risk,”3 Both personal injury claims and sales and marketing claims were consolidated in MDL 1871. The stated goal of the panel in creating the MDL was to eliminate dupli-cative discovery, avoid inconsistent pretrial rulings, and conserve the resources of the parties.4 In its role as the MDL Court, this Court has, with the assistance of court-appointed Special Discovery Masters and Settlement Masters, directed discovery efforts, resolved common questions of law, decided Daubert motions, and overseen the settlement of tens of thousands of individual cases.

In 2010, the County of Santa Clara (“the County”), individually and on behalf of the People of the State of California (“the People”), filed this sales and marketing suit against Defendant GlaxoSmithK-line (“GSK”), alleging violations of California’s False Advertising Law (“FAL”) in the marketing of Avandia. Plaintiff opted to file the suit in federal court, asserting that the federal courts had diversity jurisdiction over the controversy, as Plaintiff and Defendant were citizens of different states. Plaintiff originally filed suit in the United States District Court for the Northern District of California, and the Judicial Panel on Multidistrict Litigation subsequently transferred the case to MDL 1871 by a Conditional Transfer Order dated March 11, 2010. There were no objections to the transfer. Before an answer was filed, Plaintiff filed a first amended complaint on June 10, 2010. The amended complaint, like the original complaint, alleged one count: “Violations of the California Business and Professions Code Section 17500, et seq., by Plaintiff County of Santa Clara, individually, and on behalf of the People of the State of California as against all Defendants.”5

Defendant filed a motion to dismiss the amended complaint, seeking dismissal of claims raised by the County on its own behalf, arguing that the County lacked standing under the FAL, and further arguing that the County had failed to state a claim on behalf of the People. The Court found that the County did not have standing to sue on its own behalf, but that it had adequately pled its claims on behalf of the People.6

[726]*726After the Court ruled on the motion to dismiss, GSK filed an answer and the parties began discovery efforts. In November 2012, while discovery was ongoing, the Attorney General of California, as counsel for the People of the State of California, entered into a stipulated Final Judgment with GSK in California state court, settling claims similar to those brought by the County in federal court. GSK agreed to curtail or modify certain marketing activities, and to pay the State of California approximately $7.3 million. The Final Judgment released GSK from similar claims under the FAL, but excluded claims brought by the Santa Clara County Counsel’s office for violations of the FAL to which residents of Santa Clara County were exposed. The exception to the release “applies to and in favor of only persons or entities resident in the County.”7 Because the Final Judgment limited the scope of Plaintiffs claims, the Court granted Plaintiff leave to file a Second Amended Complaint (“SAC”). The SAC was filed on February 26, 2013 and named as Plaintiffs “County of Santa Clara and the People of the State of California.”8 GSK filed an answer, and the parties continued discovery efforts.

Shortly thereafter, on May 10, 2013, GSK filed a motion for partial summary judgment, which sought to limit the scope of the County’s claims. First, the motion asked the Court to interpret the release exclusion provision in the Final Judgment as limiting recovery not just to Santa Clara residents exposed to allegedly misleading Avandia marketing, but to those Santa Clara residents who could establish that that exposure occurred within the County limits. The Court denied this request, as it was not supported by the language of the Final Judgment. GSK also asked the Court to make certain rulings regarding the calculation of restitution, should liability be established. The Court dismissed this issue without prejudice as premature.

As fact and expert discovery continued to proceed, on December 22, 2014, GSK filed another motion for partial summary judgment, seeking dismissal of the County’s claim for restitution under the FAL. On February 10, 2015, before the issue was fully briefed, Plaintiff filed the instant Motion to Dismiss for Lack of Jurisdiction.9 Although Plaintiff had opted to file suit in federal court in 2010, then asserting that the federal court had diversity jurisdiction over the case, and no party had suggested that the Court lacked jurisdiction during the subsequent five years of litigation, Plaintiff now sought dismissal of the action so that it could be refiled in state court.

The Motion to Dismiss for Lack of Jurisdiction was referred to the Special Master for an R <& R. The Special Master reviewed the relevant case law, analyzed the facts of the case, and concluded that this Court had diversity jurisdiction under the initial complaint, as the County had asserted therein. Specifically, the Special Master concluded that the County, and not the People, was the real party in interest to this suit, and as the County is a citizen of California, and GSK is not, the parties were diverse. Plaintiff filed objections to the R & R. The matter was fully briefed [727]*727and the Court held oral argument on the issue.

III. Plaintiff’s Objections to R & R 24

Plaintiff objects to the R & R on several grounds.

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Bluebook (online)
238 F. Supp. 3d 723, 2017 WL 772866, 2017 U.S. Dist. LEXIS 27566, Counsel Stack Legal Research, https://law.counselstack.com/opinion/county-of-santa-clara-v-gsk-paed-2017.