In Re Oxycontin Antitrust Litigation
821 F. Supp. 2d 591
S.D.N.Y.2011Background
- Commonwealth of Kentucky and Pike County sue Purdue entities in Kentucky state court alleging misrepresentations about OxyContin and its addiction risks.
- Alleged deception spanned December 1995 to June 2001, claiming Purdue marketed OxyContin as less addictive and less prone to abuse than alternatives.
- Kentucky Medicaid program covers about 669,000 people and accounts for ~20% of the state budget; alleges Medicaid costs were inflated by Purdue's deception.
- Pike County alleges state expenditures for investigation, apprehension, prosecution, and incarceration of individuals affected by OxyContin addiction.
- Claims include Medicaid fraud, false advertising, public nuisance, unjust enrichment, indemnity, negligence, strict liability, common-law fraud, conspiracy, and punitive damages; seeks monetary relief and equitable injunctions.
- Purdue removed the case to federal court asserting federal-question jurisdiction and CAFA removal; MDL transfer placed action in this court; Commonwealth moved to remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal-question jurisdiction exists under Grable | Commonwealth contends fraud claims necessarily raise federal Medicaid issues | Purdue argues substantial and disputed federal issue exists and federal defense binds case | No federal-question jurisdiction; Grable not satisfied |
| Whether CAFA permits removal as a class action | Commonwealth seeks relief on behalf of Kentucky consumers and state interests | Purdue asserts CAFA class-action removal applies due to real-party-in-interest logic | CAFA removal not satisfied; not a class action; not removable |
Key Cases Cited
- Grable & Sons Metal Prods., Inc. v. Darue Engineering & Mfg., 545 U.S. 308 (U.S. 2005) (established strict three-part test for federal-question jurisdiction)
- Empire HealthChoice Assur., Inc. v. McVeigh, 547 U.S. 677 (U.S. 2006) (limits federal-question jurisdiction to a slim category)
- Merrell Dow Pharms. Inc. v. Thompson, 478 U.S. 804 (U.S. 1986) (mere federal-issue presence in state law claims is insufficient for removal)
- Franchise Tax Bd. of Cal. v. Construction Laborers Vacation Trust, 463 U.S. 1 (U.S. 1983) (federal defenses do not alone confer jurisdiction)
- Blockbuster, Inc. v. Galeno, 472 F.3d 53 (2d Cir. 2006) (removal narrowly construed; doubts resolved against removability)
- Navarro Sav. Ass'n v. Lee, 446 U.S. 458 (U.S. 1980) (real-party-in-interest focus in CAFA analysis)
- Alfred L. Snapp & Son, Inc. v. Puerto Rico, 458 U.S. 592 (U.S. 1982) (distinguishes quasi-sovereign vs private-interest suits for state actions)