People v. Abbott Laboratories

431 F. Supp. 2d 98
District Court, D. Massachusetts·Decided March 13, 2006·No. No. 1456; No. CIV.A. 01-12257-PBS, CIV.A. 05-12492-PBS, CIV.A. 05-12493-PBS, CIV.A. 05-12494-PBS, CIV.A. 05-12495-PBS, CIV.A. 05-12496-PBS, CIV.A. 05-12497-PBS, CIV.A. 05-12498-PBS·Published·Cited by 1 cases

Opinion

MEMORANDUM AND ORDER

SARIS, District Judge.

I. INTRODUCTION

The question raised in these related remand motions is whether a new Supreme Court decision can be an “order or other paper from which it may first be ascertained” that a case is removable under 28 U.S.C. § 1446(b). Plaintiffs Illinois, Kentucky and New York brought these seven actions in various state courts alleging that the defendant pharmaceutical companies misrepresented average wholesale prices in violation of state law. The defendants removed all seven cases to federal court in the wake of Grable & Sons Metal Prods., Inc. v. Danel Eng’g & Mfg., 545 U.S. 308, 125 S.Ct. 2363, 2364, 162 L.Ed.2d 257 (2005), which clarified when state-law claims may implicate sufficiently substantial federal issues to support the exercise of federal question jurisdiction on removal. Plaintiffs moved to remand on the grounds (1) that the removal petitions were untimely under § 1446(b) and (2) that there is no federal question jurisdiction under Grable.

After hearing, the Court concludes that Grable did not restart the clock for removal and thus, remands all actions for untimeliness.

II. BACKGROUND

All seven actions arise out of the same alleged scheme by the defendant pharmaceutical companies to fraudulently inflate the prices of drugs by misstating the “Average Wholesale Price” (“AWP”) of their drugs in industry publications. These allegations have engendered an enormous class action suit and multi-district litigation in this Court. This Court has fully outlined these allegations in earlier orders. See, e.g., In re Pharm. Indus. Average Wholesale Price Litig., 230 F.R.D. 61 (D.Mass.2005); Montana v. Abbot Labs., 266 F.Supp.2d 250 (D.Mass.2003). A summary of the pertinent procedural history of these seven actions follows.

The Attorneys General of Illinois, Kentucky and New York separately filed seven complaints in various state courts between 2003 and 2005.1 In the three New York cases, the defendants removed to federal court within thirty days of the initial complaints.2 The Attorney General of New York filed timely motions to remand. Af[105] ter the Judicial Panel on Multi-District Litigation (the “JPMDL”) ordered that the New York cases be transferred to this Court for inclusion in the Pharmaceutical Industry Average Wholesale Price Litigation, M.D.L. No. 1456 (the “AWP MDL”), this Court allowed the motions to remand to state court based on Montana, 266 F.Supp.2d at 256 (relying on First Circuit precedent interpreting Merrell Dow Pharms. Inc. v. Thompson, 478 U.S. 804, 106 S.Ct. 3229, 92 L.Ed.2d 650 (1986)). (Docket No. 558.) In the Illinois case and the three Kentucky cases, the defendants did not file any notices to remove within thirty days of the initial or amended complaints.

On June 13, 2005, the Supreme Court issued Grable, resolving the split within the Courts of Appeals in interpreting Merrell Dow. Grable, 125 S.Ct. at 2366. On July 13, 2005, within thirty days of the Grable decision, the defendants in all seven cases filed notices of removal to federal court based on federal question jurisdiction under Grable. Regarding the threshold issue of timeliness, the defendants conceded that they had not removed within thirty days of the initial pleadings but asserted that Grable constituted an “other paper from which it may first be ascertained” that the cases were removable under § 1446(b). The plaintiffs filed timely motions to remand in each case.3

On December 9, 2005, this Court received all seven cases for inclusion in the AWP MDL pursuant to a JPMDL transfer order. The Court held a hearing on January 27, 2006.

III. DISCUSSION

The threshold question this Court must consider is the timeliness of the notices of removal that the defendants filed on July 13, 2005. Under the first paragraph of 28 U.S.C. § 1446(b), a defendant must seek removal “within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading” or “after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, whichever period is shorter.” Under the second paragraph of § 1446(b), if there are no grounds to remove the case based on the initial pleadings or summons, the defendant may also file a notice of removal

within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable.

Id. The removal statute should be strictly construed, and any doubts about the propriety of removal should be resolved against the removal of an action. See, e.g., Danca v. Private Health Care Sys., Inc., 185 F.3d 1, 4 (1st Cir.1999).

In all seven removal petitions at issue here, it is undisputed that the defendants did not remove within thirty days of the initial pleadings or summons under the first paragraph of § 1446(b). The removal notices are thus timely only if the Grable decision constitutes an “order or other paper” that restarts the thirty-day clock.

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Related

In Re Pharm. Industry Average Wholesale Price
431 F. Supp. 2d 98 (D. Massachusetts, 2006)