New Mexico ex rel. Balderas v. Purdue Pharma L.P.

323 F. Supp. 3d 1242
CourtDistrict Court, D. New Mexico
DecidedJune 12, 2018
DocketNo. 1:18–cv–00386–JCH–KBM
StatusPublished
Cited by5 cases

This text of 323 F. Supp. 3d 1242 (New Mexico ex rel. Balderas v. Purdue Pharma L.P.) is published on Counsel Stack Legal Research, covering District Court, D. New Mexico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
New Mexico ex rel. Balderas v. Purdue Pharma L.P., 323 F. Supp. 3d 1242 (D.N.M. 2018).

Opinion

Judith C. Herrera, UNITED STATES DISTRICT JUDGE

THIS MATTER is before the Court on Distributor Defendants' Joint Motion to Stay Pending Ruling by the Judicial Panel on Multidistrict Litigation [Doc. 5]; Plaintiff's Motion to Remand [Doc. 10]; and Plaintiff's Motion to Expedite Briefing on its Motion to Remand [Doc. 11]. After careful consideration of the motions, briefs, and relevant law, the Court concludes that Plaintiff's Motion to Remand should be granted, and that the remaining motions should be denied as moot.

I. BACKGROUND

Plaintiff State of New Mexico ex rel. Hector Balderas, Attorney General, filed this lawsuit in the First Judicial District of the State of New Mexico against manufacturers and wholesale distributors of prescription opioids, alleging that Defendants improperly marketed and distributed prescription opiate medications nationwide. According to Plaintiff's First Amended Complaint (Complaint) McKesson Corporation and other Distributor Defendants1 habitually failed to monitor, report, investigate, and refuse suspicious orders2 for prescription opioids originating from New Mexico in violation of the New Mexico Controlled Substances Act and the federal Controlled Substances Act (FCSA), resulting in the diversion of these drugs into non-medical, illicit channels. Plaintiff's Complaint alleges that Defendants are liable on eight counts: public nuisance under N.M. Stat. Ann. § 30-8-8 -1 and New Mexico's common law (Count I); violation of New Mexico's Unfair Practices Act, N.M. Stat. Ann. §§ 57-12-1 to -26 (Count II); violation of New Mexico's Medicare Fraud Act, N.M. Stat. Ann. §§ 30-44-1 to -8 (Count III); violation of New Mexico's Racketeering Act, N.M. Stat. Ann. §§ 30-42-1 to -6 (Count IV); conspiracy to violate New Mexico's Racketeering Act (Count V); violation of New Mexico's Fraud Against Taxpayers Act, N.M. Stat. Ann. §§ 44-9-1 to -14 (Count VI); negligence *1246(Count VII); and negligence per se (Count VIII). The Complaint alleges that Defendants' conduct exacted a huge financial burden on the State of New Mexico, and Plaintiff seeks various damages against Defendants for their alleged role in igniting an opioid epidemic. In addition to seeking temporary and permanent injunctions, various statutory damages and attorneys' fees, Plaintiff requests past and future damages for

(A) money wrongfully paid for opioids through government-funded insurance; (B) costs for providing medical care, additional therapeutic care and prescription drug purchases, and other treatments for patients suffering from opioid-related addiction or disease, including overdoses and deaths; (C) costs for providing treatment, counseling, and rehabilitation services; (D) costs for providing treatment of infants born with opioid-related medical conditions; (E) costs for providing welfare for children whose parents suffer from opioid-related disability or incapacitation; and (F) costs associated with law enforcement and public safety relating to the opioid epidemic.

Compl., Prayer for Relief, ¶ 9.

McKesson filed a notice of removal in this Court, asserting that because Defendants' "duties governing reporting and shipping 'suspicious' orders [ ] arise solely from the federal Controlled Substances Act," this Court has federal jurisdiction over Plaintiff's Complaint under the FCSA. Notice of Removal, Doc. 1, ¶¶ 8, 16. In its Motion to Remand, Plaintiff argues that its 167-page Complaint does not allege any federal claims. Indeed, Plaintiff contends that the Complaint explicitly disavows all federal causes of action, see e.g. Compl. ¶ 47, ("federal question subject matter jurisdiction pursuant to 28 U.S.C. § 1331 is not invoked by the Complaint ... nowhere herein does Plaintiff plead ... any cause of action or request any remedy that arises under federal law.") Plaintiff also claims that, despite the Complaint's references to federal law and regulations that are incorporated into various analogous New Mexico laws and regulations, the Complaint does not rely on federal law to generate a cause of action. See id. ¶ 48 ("In this complaint, Plaintiff cites federal statutes and regulations. Plaintiff does so to state the duty owed under New Mexico tort law, not to allege an independent federal cause of action and not to allege any substantial federal question ....")

Plaintiff explains in its Motion to Remand that New Mexico law "parallels" federal law applicable to manufacturer and wholesale drug distributors, and that in order to comply with state law, Defendants must also comply with federal law. The Complaint describes some state law duties that incorporate federal standards, or require compliance with both New Mexico and federal law. For instance, the Complaint explains how "[t]he [NMCSA] and Administrative Code incorporate by reference relevant federal laws and regulations." Compl. ¶ 162 (citing N.M. Code R. § 16.19.8.13(I) and N.M. Stat. Ann, §§ 30-31-13(C), 30-31-16(A) ). Further, "wholesale drug distributors shall operate in compliance with applicable federal, state, and local laws and regulations" and "[w]holesale drug distributors that deal in controlled substances shall register with the [New Mexico Board of Pharmacy] and with the [federal Drug Enforcement Agency]." Compl. ¶ 162 (citing N.M. Code. R. § 16.19.8.13(I) & (I)(2) ). The same rules require that "any diversion of a prescription drug be reported to the New Mexico Pharmacy Board, the FDA, and ... the DEA" and that this same duty exists under federal regulations, which are incorporated by reference." Compl. ¶ 163 (citing *1247N.M. Code. R. § 16.19.8.13(I) & (F)(5); §§ 30-31-13(C), 30-31-16(A) ). Plaintiff's Complaint also cites New Mexico regulations that require the Distributor Defendants to guard against and report "diversion" of prescription opioids. For example, under N.M. Code. R. § 16.19.8.13(F) "[w]holesale distributors shall report any theft, suspect theft, diversion or other significant loss of any prescription drug ... to the board ...." And under N.M. Code. R. § 16.19.20.48(A) distributors and manufacturers "shall provide effective controls and procedures to guard against theft and diversion of controlled substances." See

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Bluebook (online)
323 F. Supp. 3d 1242, Counsel Stack Legal Research, https://law.counselstack.com/opinion/new-mexico-ex-rel-balderas-v-purdue-pharma-lp-nmd-2018.