737 F.Supp.3d 214
S.D.N.Y.2024Background
- Thirty-four New York counties and municipalities sued various defendants—including pharmacy benefit managers (PBMs) Express Scripts, Inc. and OptumRx, Inc.—in state courts, alleging state law claims related to the opioid crisis.
- The cases were consolidated in New York's state court opioid litigation and assigned to Westchester County Supreme Court.
- After amending their pleadings to add PBMs as defendants, the PBMs removed the cases to federal court under the federal officer removal statute, citing their contracts with federal agencies (including the VHA, DOD/TRICARE, and FEHBP).
- Plaintiffs then amended their complaints to expressly disclaim any claims arising from defendants' federal contracts or implicating federal law, and moved to remand the cases to state court.
- The litigation is at an early stage, with parallel opioid cases proceeding in state court before a judge familiar with the broader opioid litigation.
- The federal court was presented with Plaintiffs’ motion to remand and Defendants' opposition, as well as Defendants' request for a stay pending possible appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Effect of Post-Removal Disclaimer on Jurisdiction | Amended complaints disclaim all claims triggering federal officer jurisdiction; therefore, no federal jurisdiction remains. | Post-removal amendments do not affect propriety of removal; removal was proper at time of filing. | Disclaimers are effective and eliminate basis for federal officer jurisdiction. |
| Indivisibility of Damages and Claims | Any damages relating to federal programs are waived; only non-federal work is at issue. | The claims and damages are indivisible; disclaimer is illusory since nuisance is aggregate. | Indivisibility argument rejected; disclaimers are enforceable and sufficient. |
| Supplemental Jurisdiction over State Law Claims | Court should decline jurisdiction: claims are purely state law and best left to state forum. | Federal court should retain jurisdiction due to possible federal issues remaining or federal defenses. | Declines to exercise supplemental jurisdiction; remands to state court. |
| Stay of Remand Pending Appeal | (Not expressly requested by Plaintiffs.) | Requested a stay to preserve right to appeal remand. | Stay denied; Defendants did not meet the burden for a stay. |
Key Cases Cited
- Isaacson v. Dow Chem. Co., 517 F.3d 129 (2d Cir. 2008) (sets forth test for federal officer removal for non-officers)
- Home Depot U.S.A., Inc. v. Jackson, 139 S. Ct. 1743 (2019) (reaffirms limited jurisdiction of federal courts)
- Nken v. Holder, 556 U.S. 418 (2009) (outlines factors for granting a stay pending appeal)