People of The State of California v. Boehringer Ingelheim Pharmaceuticals, Inc., 8:17-cv-00923

The People of the State of California (through the Orange County District Attorney) sued multiple pharmaceutical companies in California Superior Court under California's Unfair Competition Law (Cal. Bus. & Prof. Code § 17200 et seq.), alleging a scheme to keep generic Aggrenox off the market and causing overpayments by Californians and public payors.
Plaintiffs seek injunctive relief, civil penalties, and restitution to protect the public and enforce consumer protection laws.
Defendants removed the case to federal court asserting diversity jurisdiction and anticipating transfer to MDL proceedings in Connecticut.
The People moved to remand, arguing the State (the real party in interest) is not a "citizen" for diversity purposes; defendants asked the court to look behind the pleadings and argued Orange County (a political subdivision) is the real party in interest and is a citizen of California.
The district court concluded the State (the People) is the real party in interest given statutory authorization for district attorneys to sue in the name of the People, the public-law enforcement character of § 17200 actions, the public-focused remedies sought, and precedent treating such actions as state enforcement.
The court granted the motion to remand for lack of diversity jurisdiction and denied the defendants' motion to stay pending the JPML's conditional transfer order.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether federal diversity jurisdiction exists	The State (People) brought a law‑enforcement action; a State is not a citizen for diversity, so remand required	Orange County (a political subdivision) is the real party in interest and is a citizen of California, so diversity exists	Remand granted — the State is the real party in interest; diversity lacking
Whether court may look behind the pleadings to determine real party in interest	Look to statutory scheme and nature of action; pleadings show State enforcement	Court should pierce form where plaintiffs improperly create/destroy diversity	Court considered the record but concluded substance shows State is real party in interest
Whether § 17200 restitution/penalties make action a private or public enforcement action	Action is public-law enforcement seeking injunctive relief and penalties for public benefit; restitution is ancillary	Seeking restitution and alleged impact on local payors shows county/local interests	Court held remedies and statutory scheme show public/state enforcement predominates
Whether to stay pending JPML conditional transfer	Remand motion must be decided by district court; stay unnecessary	Stay appropriate until JPML rules on conditional transfer	Court denied stay, deciding remand motion and noting JPML pendency does not suspend district court jurisdiction

Lightfoot v. Cendant Mortg. Corp., 137 S. Ct. 553 (U.S. 2017) (state courts are competent to adjudicate their own laws)
Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (U.S. 1994) (party asserting federal jurisdiction bears burden of establishing it)
Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (U.S. 1941) (removal jurisdiction must be strictly confined to statutory limits)
Miller v. Grgurich, 763 F.2d 372 (9th Cir. 1985) (diversity for removal generally determined from face of complaint)
Dep’t of Fair Employment & Housing v. Lucent Techs., Inc., 642 F.3d 728 (9th Cir. 2011) (a State or state agency is not a citizen for diversity purposes)
Moor v. Alameda Cty., 411 U.S. 693 (U.S. 1973) (political subdivisions are citizens of the State for diversity purposes)
Nevada v. Bank of Am. Corp., 672 F.3d 661 (9th Cir. 2012) (look to the essential nature and effect of the proceeding to determine real party in interest)
City & County of San Francisco v. PG & E Corp., 433 F.3d 1115 (9th Cir. 2006) (California § 17200 governmental enforcement actions are fundamentally public-law actions)