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DAWSON EX REL. THOMPSON v. CIBA-GEIGY CORP.

May 23, 2001

DORIAN S. DAWSON, A MINOR, BY HIS GUARDIAN AD LITEM JENNIFER LESANE THOMPSON, ET AL, PLAINTIFFS,
v.
CIBA-GEIGY CORP., USA, NOVARTIS PHARMACEUTICALS CORP. ET AL, DEFENDANTS.



The opinion of the court was delivered by: Hochberg, District Judge.

OPINION

I. FACTUAL AND PROCEDURAL HISTORY

Plaintiffs filed a class action Complaint on September 13, 2000, in the Superior Court of New Jersey, Law Division, brought on behalf of persons who have used the drug Ritalin*fn1 or purchased Ritalin for use by their children. Defendants are Novartis Pharmaceuticals Corp. ("Novartis"), the manufacturer of Ritalin,*fn2 the American Psychiatric Association (the "APA"), which Plaintiffs allege determines and publishes the diagnostic criteria for Attention Deficit Disorder ("ADD") and Attention Deficit/Hyperactivity Disorder ("ADHD"), the disorders for which Ritalin is commonly prescribed, and Children and Adults with Attention-Deficit/Hyperactivity Disorder ("CHADD"), an organization which Plaintiff alleges enables Novartis to illegally advertise Ritalin.*fn3

Plaintiffs' Complaint alleges that Defendants individually and collectively injured Plaintiffs through the promotion, sale and distribution of Ritalin. Specifically, Plaintiffs claim that Novartis and the APA "planned, conspired and colluded to create, develop and confirm the diagnoses" of ADD and ADHD "to increase the market for its product Ritalin." (Compl., ¶ 9). Plaintiffs further allege that Novartis deliberately and negligently promoted the sale of Ritalin by distributing misleading sales and promotional literature to parents, schools and other interested persons. According to Plaintiffs, the literature distributed by Defendants fails to provide adequate information about many of the hazards of Ritalin and misrepresents the efficacy of Ritalin. (Compl. ¶ 12-15). Plaintiffs seek relief under the New Jersey Consumer Fraud Act, N.J.S.A. 56:8-1 et. seq.; Plaintiffs also sue under theories of fraud, misrepresentation, negligence, and breach of express and implied warranties. Plaintiffs seek relief in the form of exemplary damages, disgorgement of profits, restitution, medical monitoring and an injunction barring the methods and practices pursuant to which Defendants allegedly misrepresented the benefits and hazards of Ritalin.

Defendants timely filed a notice of removal with this Court on December 21, 2000. Plaintiffs filed a motion to remand, which the APA opposed. Defendants CHADD and Novartis joined in APA's opposition. Defendants claim that because Plaintiffs' Complaint seeks injunctive relief in a form which requires further approval from the Food and Drug Administration under the Federal Food, Drug, and Cosmetic Act (the "FDCA"), 21 U.S.C. § 321 et seq., federal question jurisdiction exists and this case was properly removed to this Court.*fn4

II. STANDARD OF REVIEW: REMOVAL

The question presented is whether Plaintiffs' state law claims for misrepresentation and fraud by Defendants regarding the drug Ritalin should be restated as a claim "arising under" federal law, due to the regulation of Ritalin under the FDCA.

Congress has provided for removal of cases from state court to federal court only if the federal court would have had original jurisdiction over the action. 28 U.S.C. § 1441(a). Congress gave the federal courts general federal question jurisdiction in the Judiciary Act of 1875, providing "[t]he districts courts shall have original jurisdiction of all civil actions arising under the Constitution, laws or treaties of the United States." 28 U.S.C. § 1331 (emphasis added). Federal removal statutes are to be strictly construed, and all doubts regarding removal are to be resolved in favor of remand. Boyer v. Snap-on Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990), cert. denied, 498 U.S. 1085, 111 S.Ct. 959, 112 L.Ed.2d 1046 (1991) (citations omitted).

The presence of federal question jurisdiction is governed by reference to the "well-pleaded complaint" doctrine. Merrell Dow Pharmaceuticals, Inc. v. Thompson, 478 U.S. 804, 808, 106 S.Ct. 3229, 92 L.Ed.2d 650 (1986) (citing Franchise Tax Board v. Construction Laborers Vacation Trust, 463 U.S. 1, 9-10, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983)). Pursuant to this doctrine, a case "arises under" federal law and is therefore removable only if a federal claim exists on the face of Plaintiffs' complaint. Id. The fact that Plaintiff's state law claims may be pre-empted by federal law is insufficient to confer federal question jurisdiction. Dukes v. U.S. Healthcare, Inc., 57 F.3d 350, 353 (3d Cir. 1995). Thus, removal is not proper if based on a defense or an anticipated defense which is federal in nature, even if both parties admit that the federal defense is the only real question in the case. See Caterpillar Inc. v. Williams, 482 U.S. 386, 393, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987) ("The fact that a defendant might ultimately prove that a plaintiff's claims are preempted under [a federal statute] does not establish that they are removable to federal court."); see also Gully v. First Nat'l Bank 299 U.S. 109, 116, 57 S.Ct. 96, 81 L.Ed. 70 (1936) ("By unimpeachable authority, a suit brought upon a state statute does not arise under an Act of Congress or the Constitution of the United States because prohibited thereby") (emphasis added).

One corollary to the well-pleaded complaint rule is the doctrine of "complete preemption."*fn5 Caterpillar, 482 U.S. at 393, 107 S.Ct. 2425. Although normally federal preemption only provides a federal defense and does not permit removal, in certain circumstances the preemptive force of federal law is so powerful that it completely displaces any state law cause of action, and leaves room only for federal law for purposes of the "well-pleaded complaint" rule. Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63-65, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987); see also Dukes, 57 F.3d at 354;*fn6 15 James Wm. Moore et al., Moore's Federal Practice, ¶ 103.45[1] (3d ed. 1999). This is known as the jurisdictional doctrine of "complete preemption" or "displacing preemption." Complete preemption only exists if: (1) "the statute relied upon by the defendant as preemptive contains civil enforcement provisions within the scope of which the plaintiff's state claim falls," Railway Labor Executives Ass'n v. Pittsburgh & Lake Erie R.R. Co., 858 F.2d 936, 942 (3d Cir. 1988) (citing Franchise Tax Board, 463 U.S. at 24, 26, 103 S.Ct. 2841); and (2) there is "a clear indication of a Congressional intention to permit removal despite the plaintiff's exclusive reliance on state law." Railway Labor, 858 F.2d at 942 (citing Metropolitan Life Ins. Co., 481 U.S. at 64-66, 107 S.Ct. 1542). The Third Circuit explained the logic of these requirements:

In order to determine whether it possesses this authority to recharacterize, the federal court must first ask whether the statute relied upon by the defendant as preemptive contains civil enforcement provisions within the scope of which the plaintiff's state claim falls . . . If the federal statute creates no federal cause of action vindicating the same interest the plaintiff's state cause of action seeks to vindicate, recharacterization as a federal claim is not possible and there is no claim arising under federal law to be removed and litigated in the federal court.

Railway Labor, 858 F.2d at 942 (citing Franchise Tax Board, 463 U.S. at 24, 26, 103 S.Ct. 2841). This two part test for complete preemption is "the only basis for recharacterizing a state law claim as a federal claim removable to a district court." Goepel v. National Postal Mail Handlers Union, 36 F.3d 306, 312 (3d Cir. 1994). If the above prerequisites are met, the state law claim is "recharacterized" as a federal claim and removal is proper. The Supreme Court has only found complete preemption to exist ...


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