Purdue Pharma L.P. v. Commonwealth of Kentucky
2013 U.S. App. LEXIS 559
| 2d Cir. | 2013Background
- Kentucky and Pike County sued Purdue entities in state court alleging deceptive promotion of OxyContin and related costs to state programs and residents.
- Plaintiffs asserted multiple state-law claims (Medicaid fraud, false advertising, antitrust, nuisance, unjust enrichment, negligence, fraud, conspiracy, punitive damages) seeking damages, penalties, fees, and equitable relief.
- Purdue removed to federal court arguing CAFA class-action removal and federal-question jurisdiction; case transferred to SDNY for MDL purposes.
- District Court remanded, holding the action did not meet CAFA’s class-action or mass-action definitions; Purdue sought permission to appeal under 28 U.S.C. § 1453(c)(1).
- The panel denied leave to appeal, holding parens patriae action by a state is not a CAFA “class action,” so no CAFA jurisdiction exists.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether parens patriae actions qualify as CAFA class actions | Purdue argues the suit is masquerading as parens patriae to defeat CAFA jurisdiction. | Plaintiffs contend the action is not a CAFA class action because it is brought by state sovereigns, not a class under Rule 23. | Parens patriae actions are not CAFA class actions; no CAFA jurisdiction. |
| Whether the whole-complaint or claim-by-claim approach determines real party in interest for CAFA | Purdue urges claim-by-claim analysis to show consumers are real parties in interest for some relief. | Plaintiffs argue the sovereignty nature of the suit predominates and the case as a whole shows the state is the real party in interest. | Court declines to adopt Caldwell’s claim-by-claim approach for class-action analysis; regardless, the action is not a CAFA class action. |
| Whether the action satisfies CAFA’s jurisdictional requirements (numerosity, minimal diversity, amount in controversy) | If treated as a class action, it would meet CAFA requirements due to multiple claims and potential consumers. | Even if some relief could be framed for consumers, the action does not fit CAFA’s class-action definition and thus lacks jurisdiction. | Not a CAFA class action; jurisdiction lacking. |
| Whether the real-party-in-interest analysis affects CAFA jurisdiction here | If consumers are real parties for certain claims, their citizenship could satisfy minimal diversity for CAFA. | Real-party-in-interest does not convert the action into a CAFA class action; state sovereign interests predominate and CAFA does not apply. | Real-party-in-interest analysis does not create CAFA jurisdiction; parens patriae action remains non-class-action. |
Key Cases Cited
- West Virginia ex rel. McGraw v. CVS Pharmacy, Inc., 646 F.3d 169 (4th Cir. 2011) (parens patriae not removable as CAFA class action)
- Madigan v. City of Etna, 665 F.3d 676 (7th Cir. 2012) (parens patriae not CAFA class action; issue of approach to real-party-in-interest)
- Washington v. Chimei Innolux Corp., 659 F.3d 842 (9th Cir. 2011) (parens patriae suits not class actions under CAFA)
- AU Optronics Corp. v. South Carolina, 699 F.3d 385 (4th Cir. 2012) (adopts whole-case approach to CAFA mass-action, rejects Caldwell-like approach)
- In re Vioxx Prods. Liab. Litig., 843 F. Supp. 2d 654 (E.D. La. 2012) (cites approaches to CAFA class-action determination)