Teamsters Local 404 Health Servs. & Ins. Plan v. King Pharm., Inc.

906 F.3d 260
CourtCourt of Appeals for the Second Circuit
DecidedOctober 16, 2018
DocketDocket No. 16-791-cv; August Term, 2016
StatusPublished
Cited by20 cases

This text of 906 F.3d 260 (Teamsters Local 404 Health Servs. & Ins. Plan v. King Pharm., Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Teamsters Local 404 Health Servs. & Ins. Plan v. King Pharm., Inc., 906 F.3d 260 (2d Cir. 2018).

Opinion

Hall, Circuit Judge:

*262Respondents King Pharmaceuticals, Inc., Meridian Medical Technologies, Inc., and Pfizer, Inc., ("Respondents"), appeal from the Southern District of New York's (Kaplan, J. ) denial of their request to remove a New York Civil Practice Law and Rules ("CPLR") pre-action disclosure petition filed by Teamsters Local 404 Health Services and Insurance Plan ("Petitioner") in New York Supreme Court. Petitioner seeks disclosure of a settlement agreement concluding a patent dispute between Respondents and the generic manufacturer of the EpiPen. See King Pharms., Inc. v. Teva Parenteral Meds., Inc. , No. 09-cv-00652 (D. Del. 2009). The district court remanded the case to New York Supreme Court, finding that it lacked federal question jurisdiction pursuant to 28 U.S.C. § 1331 and that diversity jurisdiction pursuant to 28 U.S.C. § 1332 was barred by 28 U.S.C. § 1441(b) 's "forum defendant" rule.

We affirm the judgment of the district court, exercising our discretion to "affirm the district court's judgment on any ground appearing in the record, even if the ground is different from the one relied on by the district court." Liberty Mut. Ins. Co. v. Hurlbut , 585 F.3d 639, 648 (2d Cir. 2009) (quoting Doninger v. Niehoff , 527 F.3d 41, 50 n.2 (2d Cir. 2008) (internal quotation marks and citations omitted)). We hold that a petition filed in New York Supreme Court under CPLR § 3102(c) is not a "civil action" removable to federal court under 28 U.S.C. §§ 1441, 1446.

I.

Petitioner, an employee welfare benefits plan that provides reimbursement for the purchase price of prescription drugs, including the EpiPen, commenced a special proceeding by filing a petition in New York State Supreme Court, New York County, for CPLR § 3102(c) pre-action disclosure. Petitioner obtained an Order to Show Cause from the Supreme Court as to why disclosure of settlement agreements, licensing agreements, and any other related agreements entered into with Teva Pharmaceutical Industries, Ltd. ("Teva") should not issue.

Petitioner sought the pre-action disclosure of agreements Respondents entered into with Teva to resolve on-going patent litigation regarding Teva's creation and *263sale of a generic version of the EpiPen. Petitioner alleged that Teva negotiated to receive payments from Respondents to hold off bringing the generic EpiPen to market until June 2015. Petitioner asserted that disclosure of these settlement agreements would assist it in drafting a complaint by bringing to light Respondents' and Teva's "pay-for-delay" or "reverse payment" agreements, which Petitioner contended violate state consumer protection laws and state and federal antitrust laws. The basis for Petitioner's claim was that "no rational economic actor with a viable product would refrain from entering a lucrative 'blockbuster' market unless they received some form of valuable consideration." App'x at 33. In support, Petitioner filed an attorney declaration alleging that "[t]he result of these agreements was to unlawfully extend the exclusivity period, during which the [Respondents] have monopoly power over epinephrine auto-injectors," and accordingly, "[t]he agreement(s) between the ... [Respondents] and Teva likely violate federal and state antitrust statutes, as well as state consumer protection laws." App'x at 28.

Respondents opposed the Petition for pre-action disclosure and filed a notice of removal to the Southern District of New York on June 16, 2015. Respondents argued that the pre-action disclosure request implicated the district court's jurisdiction and moved to dismiss the Petition for failure to state a claim. The basis for Respondents' motion to dismiss was that pre-action discovery of this nature is not available under the Federal Rules of Civil Procedure. See Fed. R. Civ. P. 27. Petitioner moved to remand the proceeding to New York Supreme Court, arguing that removal was untimely and that Respondents failed to allege federal subject matter jurisdiction.

The district court concluded it lacked jurisdiction and remanded the case to the New York Supreme Court. Because the decision to grant or deny pre-action disclosure depended on the construction of New York's CPLR, the district court concluded that federal question jurisdiction under § 1331 was lacking. The district court could not reach the state law question because federal law was not implicated.

The district court also determined that Respondents failed to allege complete diversity such that § 1332 diversity jurisdiction did not lie. The court first found that the notice of removal incorrectly alleged Petitioner's place of business as Massachusetts without alleging that Petitioner was a corporation. It next reasoned that Petitioner was not a corporation and, therefore, its citizenship was unclear from the notice of removal. The district court speculated as to Petitioner's business form, guessing that Petitioner was an express trust. If it was, then the citizenship of Petitioner's trustees would control for purposes of its citizenship. The district court, though, did not make a finding with respect to the parties' citizenship. Instead it found that removal based on § 1332 diversity jurisdiction was improper under § 1441(b) 's "forum defendant" rule. It did so despite Petitioner's failure to raise the "forum defendant" rule within thirty days from the filing of the notice of removal. According to the district court, because the original state court action was filed in New York Supreme Court-the state in which Respondent Pfizer was a "citizen"- § 1441(b) barred Respondents' request to remove the action to a federal forum. The district court thus remanded the action to state court.

Respondents appealed the district court's remand determination and Petitioner moved to dismiss for lack of appellate jurisdiction. On July 13, 2017, this Court *264denied Petitioner's motion to dismiss for lack of appellate jurisdiction.

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Bluebook (online)
906 F.3d 260, Counsel Stack Legal Research, https://law.counselstack.com/opinion/teamsters-local-404-health-servs-ins-plan-v-king-pharm-inc-ca2-2018.