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

United States District Court, District of New Jersey


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

This matter comes before the Court on a motion to remand by Plaintiffs. Also pending are several motions to dismiss under Fed.R.Civ.P. 12(b)(6) filed by Defendants. This Court having reviewed the motions and heard the oral argument of the parties on the motion to remand and for the reasons set forth below, Plaintiffs' motion to remand is granted.

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 in a limited number of circumstances, such as Section 502(a) of ERISA and Section 301 of the Labor Management Relations Act.*fn7

III. DISCUSSION

In the instant case, Plaintiffs' Complaint does not rely on federal law; all of the claims expressly stated by Plaintiffs are traditional state law tort and fraud claims. Nonetheless, Defendants contend that removal is proper, and make several separate but related arguments in opposition to Plaintiffs' motion to remand. Defendants first claim that because Plaintiffs' Complaint seeks injunctive relief in a form which requires further approval from the FDA under the FDCA, 21 U.S.C. § 321 et seq., federal question jurisdiction exists. Specifically, Defendants contend that any change to the literature, labeling or other information they disseminate requires further approval of the FDA. Defendants argue that because Congress expressly entrusted the FDA to approve and handle all federally-regulated drug labeling, the state court lacks the power to provide this injunctive relief.

Even assuming, arguendo, that a state court could not order the injunctive relief sought by Plaintiffs without the approval of the FDA, removal does not necessarily follow.*fn8 If it is presumed that, in enacting the FDCA, Congress determined that only the FDA may approve changes to labels or other literature regarding FDA-approved drugs, Defendants would have only established that the FDCA may provide a defense to Plaintiffs' state law claims or remedies. However, 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, 482 U.S. at 393, 107 S.Ct. 2425.*fn9

The existence of a federal defense (also known as "defensive preemption") does not provide a sufficient federal question for removal. Metropolitan Life Ins. Co., 481 U.S. at 67, 107 S.Ct. 1542. "The fact that [Defendants] might ultimately prove that [Plaintiffs'] claims [for injunctive relief] are pre-empted under [the FDCA] does not establish that they are removable to federal court." Caterpillar, 482 U.S. at 393, 107 S.Ct. 2425. Even assuming that the FDCA preempts the injunctive relief sought by Plaintiffs, this Court lacks jurisdiction unless (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, 858 F.2d at 942 (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, 481 U.S. at 64-66, 107 S.Ct. 1542).

The FDCA contains no private civil enforcement provisions which would encompass Plaintiffs' claims. See Thompson v. Merrell Dow Pharmaceuticals, 766 F.2d 1005 (6th Cir. 1985); aff'd Merrell Dow Pharmaceuticals, Inc. v. Thompson, 478 U.S. 804, 106 S.Ct. 3229, 92 L.Ed.2d 650 (1986). See also In re Orthopedic Bone Screw Products Liability Litigation, 193 F.3d 781, 788 (3d Cir. 1999) ("It is well settled . . . that the FDCA creates no private right of action"); PDK Labs., Inc. v. Friedlander, 103 F.3d 1105, 1113 (2d Cir. 1997); Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1139 (4th Cir. 1993).

As the Supreme Court found in Merrell, because no federal right of action existed under the FDCA, removal was not proper:

The significance of the necessary assumption that there is no federal private cause of action thus cannot be overstated. For the ultimate import of such a conclusion, as we have repeatedly emphasized, is that it would flout congressional intent to provide a private federal remedy for the violation of the federal statute. We think it would similarly flout, or at least undermine, congressional intent to conclude that the federal courts might nevertheless exercise federal-question jurisdiction and provide remedies for violations of that federal statute . . .

Merrell, 478 U.S. at 812, 106 S.Ct. 3229.*fn10

It is thus without doubt that there is no civil remedy available to Plaintiffs under the FDCA. Furthermore, as stated in Merrell, the lack of a private remedy in the FDCA is evidence that Congress did not intend that these types of claims be removed to federal court. See Merrell, 478 U.S. at 812, 106 S.Ct. 3229.*fn11

Defendants provide several counter-arguments. Defendants contend that despite the lack of a private federal remedy under the FDCA, complete preemption exists because Plaintiffs may avail themselves of a federal remedy under the Administrative Procedure Act, 5 U.S.C. § 702, 706 (the "APA"). Section 702 of the APA does provide Plaintiffs with a cause of action against the FDA for review of any action of that agency. However, the substitute federal cause of action which allows a federal court to recast a state claim as a federal claim under the complete preemption doctrine must be a cause of action "vindicating the same interest the plaintiff's state law cause of action seeks to vindicate." Goepel, 36 F.3d at 312 (citing Franchise Tax Board, 463 U.S. at 13, 103 S.Ct. 2841). In the instant case, Plaintiffs are not faulting the FDA for any alleged wrongs, but claim that the Defendants deceived consumers and purchasers of Ritalin about its negative and positive implications. A suit against the FDA therefore would not vindicate the same interests as Plaintiffs seek to vindicate by their current claims against Defendants.

The availability of a remedy under the APA does not vindicate the same interests as Plaintiffs seek to vindicate here, and also does not demonstrate Congressional intent to permit removal despite Plaintiffs' exclusive reliance on state law. See Railway Labor, 858 F.2d at 942 (citing Metropolitan Life, 481 U.S. at 64-66, 107 S.Ct. 1542). See also Utley v. Varian Assoc., Inc. 811 F.2d 1279, 1284 (9th Cir. 1987), cert. denied 484 U.S. 824, 108 S.Ct. 89, 98 L.Ed.2d 50 (1987) ("These remedies [under the APA] . . . are not comparable to a suit brought against [Defendants] in federal court. Judicial review under the APA typically involves suit against [the agency], not [Defendants]. . . . Neither remedy indicates congressional intent to permit suit against [Defendants] in federal court, and thus neither supports removal jurisdiction under Merrell Dow").

Defendants also seek to recharacterize Plaintiffs' misrepresentation claims as "fraud on the FDA" claims, and rely on the recent Supreme Court decision in Buckman Co. v. Plaintiffs' Legal Committee, 531 U.S. 341, 121 S.Ct. 1012, 148 L.Ed.2d 854 (2001). In Buckman, plaintiffs sought damages resulting from the use of orthopedic pedicle screws, and sued the consulting firm that assisted the manufacturer in applying to the FDA for approval (under the Medical Device Amendments ("MDA") to the FDCA). The claim alleged the fraudulent representation of the use and effects of the device to the FDA. Id. at 1015-1017. The Court noted that the Buckman plaintiffs' "fraud on the FDA" claim did not rely on traditional tort law, but rather relied on the MDA regulations as a critical element of the cause of action. In other words, the "fraud on the FDA" claim necessarily involved a finding of a violation of the MDA. Id. at 1017-1019. The Supreme Court held that these "fraud on the FDA" claims conflict with, and are preempted by, the MDA because these Amendments specifically empower the FDA, not individual consumers, to punish and deter fraud against the agency. Id. at 1017. Although Buckman did not address any jurisdictional issues of removal, Defendants interpret the Court's holding as finding both implied preemption and the elements of the jurisdictional doctrine of complete preemption.

This Court's reading of Buckman does not create federal question jurisdiction in this case. Plaintiffs' Complaint here does not allege a claim of "fraud on the FDA," but rather alleges that Defendants deceived the public, including Plaintiffs. (Compl. ¶ 39). The Supreme Court in Buckman expressly distinguished "fraud on the FDA" claims from other state tort claims for fraudulent labeling, such as those that the Court had previously addressed in Medtronic v. Lohr, 518 U.S. 470, 116 S.Ct. 2240, 135 L.Ed.2d 700 (1996). Buckman, 121 S.Ct. at 1020. In Medtronic, the Supreme Court held that the plaintiff's state law claims based on allegedly defective labeling and manufacturing of pacemaker devices were not preempted by the federal labeling and manufacturing requirements of the FDA. Medtronic, 518 U.S. at 501, 116 S.Ct. 2240. In Buckman, the Supreme Court distinguished Medtronic by stating "although Medtronic can be read to allow certain state-law causes of actions that parallel federal safety requirements, it does not and cannot stand for the proposition that any violation of the FDCA will support a state law claim." Buckman, 121 S.Ct. at 1020. Buckman thus clarified that traditional state tort law claims (even those which parallel FDCA requirements) are not necessarily preempted by the FDCA and are not necessarily the same as "fraud on the FDA" type claims. Id.

Unlike the claims in Buckman, a finding of a violation of the FDCA is not a necessary element of Plaintiffs' claims, which rely on traditional state tort principles. Plaintiffs are not claiming a violation of the FDCA; their claims are confined to traditional state tort and fraud claims, similar to those in Medtronic. Plaintiffs' claims rely on traditional state tort law, and there is no federal cause of action that supplants those claims.*fn12

Although this Court is sympathetic to Defendants' argument that it would be more efficient and practical to have a uniform federal ruling addressing these claims that have been filed in myriad state court proceedings, the Supreme Court has rejected such a basis for federal question jurisdiction. See Merrell, 478 U.S. at 815-816, 106 S.Ct. 3229. While it is true that Plaintiffs may have no right to the injunctive relief they seek in state court due to the FDCA, such "defensive preemption" does not convert Plaintiff's state law claim to one that "arises under" the laws of the United States. This Court declines to extend the doctrine of complete preemption to the FDCA, in light of Congress' determination that no private right of action exist for violations of that statute. See Merrell, 478 U.S. at 812, 106 S.Ct. 3229.

IV. CONCLUSION

For the foregoing reasons, there is no federal question jurisdiction which permits removal of this case. Plaintiffs' motion to remand is granted, and this Court may not reach the merits of Defendants' motions to dismiss. An appropriate Order will issue.


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