West Virginia Ex Rel. McGraw v. CVS Pharmacy, Inc.
2011 U.S. App. LEXIS 10171
4th Cir.2011Background
- West Virginia AG sued CVS Pharmacy and five other pharmacies in state court alleging overcharges on generics under WV Pharmacy Act and WVCCPA, seeking injunctions, restitution, disgorgement, penalties, interest, and fees.
- Pharmacies removed to federal court under CAFA claiming the action was a disguised class action seeking relief for consumers nationwide.
- District court remanded, concluding the action is not a CAFA class action but a classic parens patriae action to vindicate sovereign and citizen interests.
- CAFA removal requires a class action under Rule 23 or a ‘similar’ state statute enabling representative actions; WV acts here do not resemble Rule 23 in essential elements like numerosity and typicality.
- On appeal, the Fourth Circuit affirmed remand, holding WVCCPA and Pharmacy Act are not similar to Rule 23, so CAFA does not apply to remove the action.
- Dissent (Gilman, J.) would treat the action as a CAFA class action, arguing the real parties in interest are consumers and that WVCCPA provides sufficient class-action-like mechanism.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the action is a CAFA class action removable to federal court. | McGraw: action resembles a class action under CAFA via WVCCPA claims. | Pharmacies: WV statutes are not ‘similar’ to Rule 23; not a class action; parens patriae sufficient. | Not removable as CAFA class action; remand affirmed. |
| Whether WVCCPA and Pharmacy Act are sufficiently similar to Rule 23 to confer CAFA jurisdiction. | Statutes enable aggregation of many consumer claims; similar to class action. | Statutes lack numerosity, commonality, typicality; are parens patriae, not class action. | Not sufficiently similar; CAFA jurisdiction not triggered. |
| Whether the state’s parens patriae posture defeats CAFA removal or whether consumers are the real class members. | State represents general consumer interests; quasi-sovereign duty supports removal. | Consumers are the real beneficiaries; state action is masking a class action. | Court treated as parens patriae; removal denied. |
| Whether the district court properly applied CAFA’s jurisdictional framework to reject removal. | CAFA should apply when the action resembles a class action under similar state law. | CAFA requires a true similarity to Rule 23; here it does not. | Remand affirmed; CAFA does not apply. |
Key Cases Cited
- General Telephone Co. v. EEOC, 446 U.S. 318 (1980) (EEOC action not a Rule 23 class action; public interest role)
- Louisiana ex rel. Caldwell v. Allstate Ins. Co., 536 F.3d 418 (5th Cir. 2008) (parens patriae framework; quasi-sovereign interest in consumer protection cases)
- In re Edmond, 934 F.2d 1304 (4th Cir. 1991) (state action not always Rule 23 class action; consumer protection context)
- Gen. Tel. Co. v. Falcon, 457 U.S. 147 (1982) (class action representation requirements; role of named plaintiff)
- West Virginia ex rel. McGraw v. Comcast Corp., 705 F. Supp. 2d 441 (E.D. Pa. 2010) (claim-by-claim quasi-sovereign framework; CAFA similarity analysis)
- Caldwell v. Allstate Ins. Co., 536 F.3d 418 (5th Cir. 2008) (quasi-sovereign interests; representative actions versus class actions)
- In re Katrina Canal Litig. Breaches, 524 F.3d 700 (5th Cir. 2008) (sovereign interest and removal considerations)