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Stout v. Novartis Pharmaceuticals

November 30, 2009

CANDACE STOUT, PLAINTIFF,
v.
NOVARTIS PHARMACEUTICALS, CORPORATION, NOVARTIS PHARMA GMBH, AND NOVARTIS AG, DEFENDANTS.
VICTORIA ANDERSON, PLAINTIFF,
v.
NOVARTIS PHARMACEUTICALS, CORPORATION, NOVARTIS PHARMA GMBH, AND NOVARTIS AG, DEFENDANTS.
DAWN BERKEY, PLAINTIFF,
v.
NOVARTIS PHARMACEUTICALS, CORPORATION, NOVARTIS PHARMA GMBH, AND NOVARTIS AG, ASTELLAS PHARMA US, INC., DEFENDANTS.
DON HOWSON & CHERYL HOWSON, PLAINTIFFS,
v.
NOVARTIS PHARMACEUTICALS, CORPORATION, NOVARTIS PHARMA GMBH, AND NOVARTIS AG, DEFENDANTS. KELLY LINKENMEYER, PLAINTIFF,
v.
NOVARTIS PHARMACEUTICALS, CORPORATION, NOVARTIS PHARMA GMBH, AND NOVARTIS AG, DEFENDANTS.
ASHLEY MCDONALD, PLAINTIFF,
v.
NOVARTIS PHARMACEUTICALS, CORPORATION, NOVARTIS CORPORATION, NOVARTIS PHARMA GMBH, AND NOVARTIS AG, DEFENDANTS.



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

OPINION

Under New Jersey law, in certain circumstances a consumer injured by an FDA-approved pharmaceutical drug may seek punitive damages if the product manufacturer knowingly withheld or misrepresented information required to be submitted under the FDA's regulations, which information was material to the harm in question. N.J. Stat. Ann. § 2A:58C-5(c). The principal issue to be decided here is whether such a claim - as presented in each of these six lawsuits that had been initiated in state court - gives rise to federal question jurisdiction enabling the defendants to remove the cases to federal court. These matters are before the Court on Plaintiffs' motions to remand following Defendants' removal of the cases from New Jersey state court.*fn1 As will be explained below, because the Court finds Defendants' alleged basis for federal question jurisdiction insufficient, the motions for remand will be granted.

I. BACKGROUND

These six cases involve state-law products liability actions against Defendants based on Defendants' sale of topical immunosuppressants. There are over a dozen related cases that were filed in New Jersey Superior Court and removed to Camden vicinage. The undersigned has been assigned six of these cases, none of which has facts that would distinguish them from each other for the purposes of assessing subject matter jurisdiction.*fn2

Defendants initially asserted multiple bases for removal, alleging that the Court has federal question jurisdiction pursuant to 28 U.S.C. § 1331 based on several aspects of Plaintiffs' complaints. For the purposes of these motions to remand, however, Defendants assert only one basis, that Plaintiffs' request for punitive damages requires the Court to apply federal law in determining whether Defendants failed to comply with Federal Drug Administration (FDA) regulations requiring certain disclosures of information. The provision of New Jersey products liability law providing for these damages states:

Punitive damages shall not be awarded if a drug or device or food or food additive which caused the claimant's harm was subject to premarket approval or licensure by the federal Food and Drug Administration under the "Federal Food, Drug, and Cosmetic Act," 52 Stat. 1040, 21 U.S.C. § 301 et seq. or the "Public Health Service Act," 58 Stat. 682, 42 U.S.C. § 201 et seq. and was approved or licensed; or is generally recognized as safe and effective pursuant to conditions established by the federal Food and Drug Administration and applicable regulations, including packaging and labeling regulations. However, where the product manufacturer knowingly withheld or misrepresented information required to be submitted under the agency's regulations, which information was material and relevant to the harm in question, punitive damages may be awarded.

N.J. Stat. Ann. § 2A:58C-5(c) (emphasis added).

The only question before this Court is whether Plaintiffs' allegation that Defendants "knowingly withheld or misrepresented information required to be submitted under the [FDA's] regulations, which information was material and relevant to the harm in question," id., provides a sufficient basis on which this Court may assert federal jurisdiction under 28 U.S.C. § 1331.*fn3

II. DISCUSSION

A. Legal Standard Governing Federal Question Jurisdiction Over State Law Claims

The standard for asserting federal question jurisdiction in the context of a state-law claim that raises a federal issue is stated in Grable & Sons Metal Prods., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308 (2005). "[T]he question is, does a state-law claim necessarily raise a stated federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities." Grable, 545 U.S. at 314. A dispute over a federal issue means a dispute over the interpretation of federal law. See Grable, 545 U.S. at 313 ("As early as 1912, this Court had confined federal-question jurisdiction over state-law claims to those that "really and substantially involv[e] a dispute or controversy respecting the validity, construction or effect of [federal] law.") (internal quotations omitted) (emphasis added).

In Grable, the plaintiff sought to quiet title over land that was subject to a quitclaim deed purporting to convey all of plaintiff's interest in the subject property from the District Director of Internal Revenue to defendant, pursuant to a tax sale. Grable & Sons Metal Products, Inc. v. Darue Engineering & Mfg., Inc., 207 F. Supp. 2d 694, 695 (W.D. Mich. 2002). The plaintiff's sole claim was that the quitclaim deed was void because plaintiff never received legally sufficient notice of the seizure of the property in the first place. Id. The plaintiff conceded that it received actual notice by way of certified mail, but claimed that this method of service did not comply with federal law. Id. The dispute, therefore, centered on the meaning of that federal law. Thus, in the words of a subsequent Supreme Court decision contrasting Grable's grant of jurisdiction from its denial, "Grable presented a nearly pure issue of [federal] law, one that could be settled once and for all and thereafter would govern numerous tax sale cases." Empire Healthchoice Assur., Inc. v. McVeigh, 547 U.S. 677, 700-01 (2006).

The natural reading of Grable's emphasis on the necessity of an "actually disputed" federal law is that jurisdiction exists only when a defendant actually disputes plaintiff's interpretation of a federal law. But a problem with this understanding of Grable is immediately apparent. It seems to be in tension with the well-pleaded complaint rule, which requires that federal question jurisdiction be determined based on the content of a plaintiff's complaint, not a defendant's response. See Louisville & Nashville R. Co. v. Mottley, 211 U.S. 149, 152 (1908); Douglas D. McFarland, The True Compass: No Federal Question in a State Law Claim, 55 U. Kan. L. Rev. 1, 20 n.121 (2006) (describing this apparent contradiction between Grable and Mottley).

One way to resolve this conflict would be to read Grable as creating an exception to the ...


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