327 F. Supp. 3d 1064
N.D. Ohio2018Background
- Cherokee Nation and Lac Courte Oreilles (the Tribes) sued opioid distributors (including McKesson) in tribal/state courts alleging state-law claims based on opioid diversion and associated public-health costs.
- McKesson removed both cases to federal court under the Federal Officer Removal Statute, 28 U.S.C. § 1442, asserting it acted under federal direction via the VA/PPV (Prime Vendor Program) contract.
- The cases were transferred into the National Prescription Opiate MDL in the Northern District of Ohio.
- Central factual predicate: McKesson supplied pharmaceuticals to federal customers (VA/IHS) under the PPV Contract; the Tribes allege defendants filled suspicious orders that caused diversion.
- The district court applied Sixth Circuit law and analyzed the three federal-officer removal elements: (1) acting under a federal officer, (2) causal nexus between conduct and federal direction, and (3) a colorable federal defense.
- Court denied the Tribes’ motions to remand, finding McKesson met the low thresholds for each prong and that removal was proper; related motions (stay of remand, oral argument, fees) were denied or denied as moot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether McKesson was "acting under" a federal officer for §1442 removal | The PPV contract did not impose the close, detailed control required; McKesson retained discretion and the contract did not direct the tortious conduct | McKesson performed a government function under detailed PPV specifications and oversight (CO review/witnessing) that VA would otherwise perform | Held: Acting-under prong satisfied — PPV relationship sufficiently close under Sixth Circuit precedent |
| Whether there is a causal nexus between contract-based actions and the Tribes’ claims | Tribes argued the PPV distributions weren’t the source of alleged diversion and removal lacks causal connection; also estoppel asserted based on prior tribal-jurisdiction positions | McKesson argued filling orders under PPV is the precise conduct alleged (filling suspicious orders) and creates a causal link to diversion claims | Held: Causal-nexus prong satisfied — low threshold met because filling orders under contract plausibly connects to diversion allegations |
| Whether McKesson asserted colorable federal defenses (e.g., government-contractor defense) | Tribes contended defenses are not colorable or applicable | McKesson asserted plausible federal defenses including Boyle government-contractor defense under PPV specifications | Held: Colorable federal defenses exist — plausibility standard met; removal proper on that basis |
| Whether remand would create problematic policy precedent for state AGs/tribal claims | Tribes warned of broad precedent enabling removal of state suits | McKesson emphasized narrow, contract-specific grounds and MDL context; noted other tribes are in MDL | Held: Court construes ruling narrowly to the cases’ facts and declines to award fees; denial of remand stands |
Key Cases Cited
- Bennett v. MIS Corp., 607 F.3d 1076 (6th Cir.) (establishes Sixth Circuit framework for "acting under" and colorable-federal-defense analysis)
- Watson v. Philip Morris Cos., 551 U.S. 142 (2007) (Federal Officer Removal Statute should be liberally construed)
- Boyle v. United Techs. Corp., 487 U.S. 500 (1988) (elements of government-contractor defense)
- Jefferson Cnty. v. Acker, 527 U.S. 423 (1999) (requires causal connection for removal)
- Mesa v. California, 489 U.S. 121 (1989) (federal-defense requirement for removal must be federal-law based and defensive)
- Mays v. City of Flint, 871 F.3d 437 (6th Cir.) (distinguishes noncontractual/state-delegation scenarios from contractors acting under federal direction)
- Isaacson v. Dow Chem. Co., 517 F.3d 129 (2d Cir.) (describes low bar for causal nexus)