Pennsylvania v. Eli Lilly & Company, Inc.

511 F. Supp. 2d 576, 2007 U.S. Dist. LEXIS 46946, 2007 WL 1876531
CourtDistrict Court, E.D. Pennsylvania
DecidedJune 27, 2007
DocketCivil Action 07-1083
StatusPublished
Cited by16 cases

This text of 511 F. Supp. 2d 576 (Pennsylvania v. Eli Lilly & Company, Inc.) 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
Pennsylvania v. Eli Lilly & Company, Inc., 511 F. Supp. 2d 576, 2007 U.S. Dist. LEXIS 46946, 2007 WL 1876531 (E.D. Pa. 2007).

Opinion

MEMORANDUM AND ORDER

PRATTER, District Judge.

The Commonwealth of Pennsylvania filed this lawsuit in the Philadelphia County Court of Common Pleas in February 2007 alleging, inter alia, that the defendant pharmaceutical companies caused the submission of fraudulent claims for prescription medications, as well as injuries resulting from the medications’ side effects. The Defendants timely filed a Notice of Removal, quickly followed by a “Joint Motion to Stay All Proceedings Pending Transfer by the Judicial Panel on Multidistrict Litigation.” The Commonwealth opposed the stay motion on the grounds that the Court lacks subject matter jurisdiction over the case, and the Commonwealth submitted its Motion to Remand for the Court’s consideration. The Court denied the Motion to Stay insofar as the Court determined to hear the Motion to Remand. 1 The case is otherwise stayed. The Defendants oppose remand. For the reasons discussed more fully below, the Court will grant the Motion to Remand.

The Complaint states the following Pennsylvania statutory and common law claims: Medicaid fraud under 62 P.S. § 1407; Pennsylvania Assistance Contract for the Elderly (“PACE”) fraud under 72 P.S. § 3761-521; Recovery by the Commonwealth as parens patriae of treatment costs for Medicaid and PACE participants injured by the Defendants’ drugs due to a failure to warn; negligence; breach of warranty; fraud and misrepresentation; misrepresentation under Restatement (Second) of Torts § 402B; and unjust enrichment. The Commonwealth does not allege any cause of action created by federal law.

SUBJECT MATTER JURISDICTION

Federal courts are courts of limited jurisdiction. See Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994). A federal court may exercise subject matter jurisdiction over “all civil actions arising under the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. Any civil action over which the district courts have original jurisdiction rooted in a claim or right arising under the Constitution, treaties or laws of the United States are removable without regard to the citizenship or residence of the parties. 28 U.S.C.A. § 1441. As many courts and commentators have recognized, “[t]he most difficult single problem in determining *579 whether federal question jurisdiction exists is deciding when the relationship of the federal law to a case is such that the action may be said to be one ‘arising under’ that law.” 13B Wright, et al., Federal Practice and Procedure 17-18 (2d ed.1984).

A case “aris[es] under” federal law within the meaning of § 1331 if “a well-pleaded complaint establishes either that federal law creates the cause of action or that the plaintiffs right to relief necessarily depends on resolution of a substantial question of federal law.” Empire Healthchoice Assurance, Inc. v. McVeigh, — U.S.-,-, 126 S.Ct. 2121, 2131, 165 L.Ed.2d 131 (2006) (citing Franchise Tax Bd. of Cal. v. Construction Laborers Vacation Trust for Southern Cal., 463 U.S. 1, 27-28, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983)).

The Supreme Court has long recognized that in certain cases federal question jurisdiction will lie over state-law claims that implicate significant federal issues or “turn on substantial questions of federal law.” Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Manufacturing, 545 U.S. 308, 312, 125 S.Ct. 2363, 162 L.Ed.2d 257 (2005) (citing Hopkins v. Walker, 244 U.S. 486, 490-91, 37 S.Ct. 711, 61 L.Ed. 1270 (1917)). This “slim category” of cases, Empire, 126 S.Ct. at 2137, reflects the “commonsense notion that a federal court ought to be able to hear claims recognized under state law that nonetheless turn on substantial questions of federal law, and thus justify resort to the experience, solicitude, and hope of uniformity that a federal forum offers on federal issues,” Grable, 545 U.S. at 312, 125 S.Ct. 2363.

However, “the mere presence of a federal issue in a state cause of action does not automatically confer federal-question jurisdiction.” Merrell Dow Pharmaceuticals, Inc. v. Thompson, 478 U.S. 804, 813, 106 S.Ct. 3229, 92 L.Ed.2d 650 (1986). To determine whether a state law claim “arises under” federal law for purposes of subject matter jurisdiction, the Court must inquire whether “a state-law claim necessarily raise[s] a stated federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities.” Grable, 545 U.S. at 314, 125 S.Ct. 2363. Thus, even if the Complaint raises a disputed and substantial federal issue, the exercise of jurisdiction must be “consistent with congressional judgment about the sound division of labor between state and federal courts governing the application of § 1331.” Id. at 313, 125 S.Ct. 2363. Defendants, as the removing parties, bear the burden of proving that removal is proper. Dukes v. United States Healthcare, Inc., 57 F.3d 350, 359 (3d Cir. 1995).

In their briefing and during oral argument, the parties appeared to tacitly acknowledge that Grable and Empire present the Court with the most instructive judicial guidance on the issue at hand, though, of course, the Defendants urge the Court to adopt the analysis and application of Grable by the undeniably able Eastern District of New York, while the Commonwealth urges following the lead of the courts for the District of Alaska and the Western District of Texas. See footnote 3, infra.

In Grable, the Supreme Court held that removal was proper because the plaintiffs claim depended upon the interpretation of a disputed federal statutory provision. Grable involved real property belonging to Grable & Sons Metal Products, Inc., which the Internal Revenue Service seized to satisfy a federal tax deficiency. 545 U.S. at 310, 125 S.Ct. 2363. Grable received notice of the seizure by certified mail, but later sued in state court to quiet title on the grounds that the IRS had conveyed *580 the seizure notice improperly, rendering the subsequent sale invalid. Id. at 311, 125 S.Ct. 2363. The governing statute, 26 U.S.C.

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Bluebook (online)
511 F. Supp. 2d 576, 2007 U.S. Dist. LEXIS 46946, 2007 WL 1876531, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pennsylvania-v-eli-lilly-company-inc-paed-2007.