Thompson v. Abbott Laboratories

309 F. Supp. 2d 165
CourtDistrict Court, D. Massachusetts
DecidedJanuary 9, 2004
DocketNo. MDL NO. 1456; No. CIV.A.01-12257-PBS, 1:03-CV-10696-PBS, 1:03-CV-10216-PBS
StatusPublished
Cited by1 cases

This text of 309 F. Supp. 2d 165 (Thompson v. Abbott Laboratories) is published on Counsel Stack Legal Research, covering District Court, D. Massachusetts primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Thompson v. Abbott Laboratories, 309 F. Supp. 2d 165 (D. Mass. 2004).

Opinion

MEMORANDUM AND ORDER

SARIS, District Judge.

INTRODUCTION

Plaintiffs Thompson and Turner bring the current actions on behalf of themselves, as private, attorneys general representing the general public, and as class representatives under California’s Unfair Competition. Law (“UCL”), Cal. Bus. & Prof.Code §§ 17200-17210 (1977). Plaintiff Congress of California Seniors brings its action on behalf of its members and the general public. Plaintiffs claim that Defendant pharmaceutical companies violated the UCL by misrepresenting the average wholesale prices (“AWP”) of their drugs, causing potentially millions of entities, including ERISA plans, participants, and beneficiaries, to overpay for prescription drugs. They seek injunctive relief, restitution, and disgorgement of profits, and Thompson also seeks damages.1

Defendants have removed the suits from state court on the ground that the state law claims are completely preempted under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001-1461. Plaintiffs seek remand on two grounds: first, that the state law claims do not create impermissible alternative enforcement mechanisms under ERISA Section 502(a), 29 U.S.C. § 1132(a), or otherwise “relate to” ERISA under Section 514(a), 29 U.S.C. § 1144(a); and second, that Plaintiffs--lack Article III standing to bring, these UCL claims in federal court.

After hearing, the Court DENIES the motions for remand of Thompson, of the Congress of California Seniors and of Turner.

DISCUSSION

I. California’s Unfair Competition Law

An analysis of ERISA preemption necessitates an examination of California’s Unfair Competition Law (“UCL”). The UCL forbids “unfair competition,” defined as “any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by Chapter. 1 (commencing with Section 17500) of Part 3 of Division 7 of the Business and Professions Code.” UCL § 17200. Actions to enforce these provisions may be brought by, inter alia, “any .person acting for the interests of itself, its members'.or the general public.” UCL § 17204. The UCL provides for in-junctive relief as well as any “orders or judgments, including-the appointment of a receiver, as may be necessary to prevent the use or employment by any person of any practice which constitutes unfair competition, as defined in this chapter, or as may be necessary to restore to any person in interest any money or property, real, .or personal, which may have been acquired by means of such unfair competition.” § 17203.

[170]*170The UCL grants relief in equity. See Cel-Tech Comm., Inc. v. Los Angeles Cellular Tel. Co., 20 Cal.4th 163, 181, 83 Cal.Rptr.2d 548, 973 P.2d 527 (1999) (“ ‘With respect to “unlawful” or “unfair” business practices, [former] section 3369 [today section 17200] undeniably establishes only a wide standard to guide courts of equity’ ”) (citing Barquis v. Merchants Collection Ass’n, 7 Cal.3d 94, 111-112, 101 Cal.Rptr. 745, 496 P.2d 817 (1972)); Olson v. Cohen, 106 Cal.App.4th 1209, 131 Cal.Rptr.2d 620, 624 (2003) (“A UCL action is equitable in nature, and the court may consider equitable factors in deciding which, if any, remedies authorized by the UCL should be awarded.”) (citation omitted).

The court in which an action under the UCL is brought has discretion to decide whether or not to allow representative claims to proceed absent class certification. Kraus v. Trinity Mgmt. Servs., Inc., 23 Cal.4th 116, 138, 96 Cal.Rptr.2d 485, 999 P.2d 718 (2000) (“[B]ecause a UCL action is one in equity, in any case in which a defendant can demonstrate a potential for harm or show that the action is not one brought by a competent plaintiff for the benefit of injured parties, the court may decline to entertain the action as a representative suit.”) (citation omitted).

In order to ensure that due process is followed, the court must establish protections for both the non-party represented persons (to make sure their interests are protected) and the defendants (to prevent double recoveries). Bronco Wine Co. v. Logoluso Farms, 214 Cal.App.3d 699, 262 Cal.Rptr. 899 (1989) (discussing due process concerns implicated in procedure utilized with regard to nonparty grower who received no notice or opportunity to be heard); Prata v. Super. Ct., 91 Cal.App.4th 1128, 1142, 111 Cal.Rptr.2d 296 (2001) (‘We are confident that the procedures suggested by the Supreme Court in Kraus will obviate the due process concerns raised by the court in Bronco Wine Co. v. Frank A. Logoluso Farms, supra, 214 Cal.App.3d at page 717, 262 Cal.Rptr. 899.”); Stokes v. Saga Int’l Holidays, Ltd., 218 F.R.D. 6, *11 (D.Mass.2003) (Collings, U.S.M.J.) (“[B]oth the Kraus and Prata Courts have made it clear that any due process concerns alleged by the defendants may be resolved by the exercise of equitable discretion so as to provide for due process protections and allow a representative UCL action to proceed.”).

II. Removal

A. The Well-Pleaded Complaint Rule

A party seeking to remove a case to federal court has the burden of demonstrating the existence of federal jurisdiction. See, e.g., BIW Deceived v. Local S6, 132 F.3d 824, 831 (1st Cir.1997). Furthermore, 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).

Federal removal jurisdiction is normally ascertained by examining the face of the state court complaint that triggered the removal. Id. Here, the parties do not dispute that the complaints present no federal questions on their faces. Normally, such a situation would compel the remand of the cases to the state court. See Danca, 185 F.3d at 4. However, where a claim under state law implicates an area of federal law for which Congress intended “a particularly powerful preemptive sweep,” the cause is deemed federal. Id. This exception to the well-pleaded complaint rule is a jurisdictional doctrine called complete preemption. Id.

[171]*171B. Complete Preemption under ERISA § 502(a)

ERISA’s civil enforcement provision, Section 502(a), 29 U.S.C. § 1132(a) (1974), is one area of federal law that triggers the complete preemption exception to the well-pleaded complaint rule.

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Related

In Re Pharmaceutical Industry Average Wholesale Price Litigation
309 F. Supp. 2d 165 (D. Massachusetts, 2004)

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Bluebook (online)
309 F. Supp. 2d 165, Counsel Stack Legal Research, https://law.counselstack.com/opinion/thompson-v-abbott-laboratories-mad-2004.