State of WEST VIRGINIA ex rel. Darrell V. MCGRAW, Jr., Attorney General, Plaintiff-Appellee, v. CVS PHARMACY, INCORPORATED, a Rhode Island Corporation; Kmart Holding Corporation, a Delaware Corporation; The Kroger Company, an Ohio Corporation; Wal-Mart Stores, Incorporated, a Delaware Corporation; Walgreen Company, an Illinois Corporation; Target Stores Incorporated, a Minnesota Corporation, Defendants-Appellants.
No. 11-1251
United States Court of Appeals, Fourth Circuit
May 20, 2011
646 F.3d 169
Argued: March 22, 2011.
F. The Department of Justice‘s (DOJ‘s) internal guidelines
Finally, Company 1 claims that the government violated the DOJ‘s internal guidelines by failing to obtain the proper approval before subpoenaing Company 1‘s confidential information that was in the control of Company 2‘s outside counsel. But Company 2 correctly notes that these guidelines explicitly state that they “are set forth solely for the purpose of internal DOJ guidance. They are not intended to, do not, and may not be relied upon to create any rights, substantive or procedural, enforceable at law by any party.”
Company 2 also correctly notes that the DOJ guidelines deal with the disclosure of an attorney‘s documents that might hinder the attorney-client relationship because the documents “relat[e] to the attorney‘s representation of a client.”
III. Conclusion
For all of the reasons set forth above, the district court‘s denial of Company 1‘s motion to quash is
AFFIRMED.
ARGUED: David B. Goroff, Foley & Lardner, LLP, Chicago, Illinois, for Appellants. John William Barrett, Bailey & Glasser, LLP, Charleston, West Virginia, for Appellee. ON BRIEF: Pamela C. Deem, Bryant J. Spann, Allen Guthrie & Thomas PLLC, Charleston, West Virginia, Robert H. Griffith, Jonathan W. Garlough, Foley & Lardner, LLP, Chicago, Illinois, for CVS Pharmacy, Incorporated; Alexander Macia, Spilman, Thomas and Battle PLLC, Charleston, West Virginia, Tina M.
Before NIEMEYER and DAVIS, Circuit Judges, and RONALD LEE GILMAN, Senior Circuit Judge of the United States Court of Appeals for the Sixth Circuit, sitting by designation.
Affirmed by published opinion. Judge NIEMEYER wrote the majority opinion, in which Judge DAVIS joined. Senior Judge GILMAN wrote a dissenting opinion.
OPINION
NIEMEYER, Circuit Judge:
The State of West Virginia, by its Attorney General, commenced this action in state court against CVS Pharmacy, Inc., and five other pharmacies (collectively, the “Pharmacies“), alleging that the Pharmacies sold generic drugs to West Virginia consumers without passing along to the
The Pharmacies removed the action from state court to the district court under the Class Action Fairness Act of 2005 (“CAFA“), Pub.L. No. 109-2, 119 Stat. 4 (2005), arguing that the action is a “disguised class action” and therefore was subject to removal under CAFA.
On the State‘s motion, the district court ordered that the action be remanded to state court, holding that the action was not a “class action” under CAFA, but rather a “classic parens patriae action” intended to vindicate the State‘s quasi-sovereign interests and the individual interests of its citizens.
We affirm, concluding that this action is not a “class action” as defined by CAFA. CAFA authorizes the removal of specified civil actions that are brought under
I
Attorney General Darrell McGraw commenced this action in the Circuit Court of Boone County, West Virginia, naming as defendants CVS Pharmacy, Inc., Kmart Holding Corporation, the Kroger Company, Wal-Mart Stores Inc., Walgreen Co., and Target Stores, Inc., and alleging that in filling drug prescriptions, these Pharmacies overcharged West Virginia citizens, in violation of two laws,
The Pharmacy Act requires pharmacists to fill prescriptions with generic drugs, when appropriate, and to pass on to the consumer the savings in the cost of the generic drugs. Thus, when a pharmacy acquires a brand name drug at $30 and a generic equivalent at $10, the pharmacy must pass on at least the $20 difference to the consumer. See
As authorized by these Acts, the West Virginia Attorney General is, in this action, seeking a temporary and permanent injunction against further violations of the Acts; “[e]quitable relief, including but not limited to restitution and disgorgement of monies obtained as a result of the overcharges“; repayment of the “excess charges” to affected consumers; civil penalties of up to $5,000 for each willful violation of the WVCCPA; pre-judgment and post-judgment interest; and costs including legal fees. The State alleges that it is pursuing these remedies “in its sovereign and quasi-sovereign capacity.”
The Pharmacies removed the action to federal court, relying on several distinct grounds for doing so, including CAFA. To justify removal under CAFA, the Pharmacies asserted that because the “complaint [was] a disguised class action” designed “to recover funds on behalf of those consumers who have allegedly paid overcharges,” it was a removable class action. In particular, they pointed to Count III, which is dedicated to the remedy of collecting, on behalf of consumers, excess charges under
The district court granted the State‘s motion to remand, rejecting each of the various grounds relied on for removal. With respect to the CAFA ground, which is the only issue on appeal, the court concluded that this action was “a classic parens patriae action that is neither a class action nor a mass action contemplated by CAFA.” West Virginia ex rel. McGraw v. CVS Pharmacy, Inc., 748 F.Supp.2d 580, 597 (S.D.W.Va.2010). In concluding that this action was a parens patriae action, the district court noted that the WVCCPA authorized the Attorney General to act “as an administrator of the law,” independently of individual consumer complaints. Id. at 593 (quoting Manchin v. Browning, 170 W.Va. 779, 296 S.E.2d 909, 919 (1982)); see also id. at 595 (observing that the Attorney General is charged with “a freestanding consumer-protection duty“). The district court also noted that the State‘s action was “imbued with a ‘disgorgement’ purpose,” “separate and apart from the interests of particular consumers in obtaining recompense.” Id. at 593. In this sense, the court explained, “the Attorney General‘s paramount goal [was] to extract from the alleged wrongdoers every penny associated with the excess charges, along with civil penalties flowing to the State alone,” thereby “warning ... future violators that they [would] not long profit from consumer fraud.” Id. at 594.
The Pharmacies sought permission to appeal the CAFA portion of the district court‘s order, relying on
II
In arguing that the district court erred in concluding that this action was not removable as a class action under
It is well-settled that “in determining whether there is jurisdiction, federal courts look to the substance of the action and not only at the labels that the parties may attach.”
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Thus, the AG may not plead around federal jurisdiction merely by labeling his claims as brought in the state‘s sovereign or quasi-sovereign capacity.
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Instead, this Court must consider whether, in substance, the Amended Complaint satisfies CAFA‘s requirements for a “class action.” That analysis makes clear this case is properly removed as a CAFA class action, and that the district court erred by remanding it.
(Quoting Louisiana ex rel. Caldwell v. Allstate Ins. Co., 536 F.3d 418, 424 (5th Cir.2008)). After asserting that the requirements for minimal diversity, the jurisdictional amount, and numerosity were in fact satisfied, the Pharmacies assert, as they must, that the state statutes on which the Attorney General relied were “similar” to
To determine whether the Pharmacies’ position is sustainable requires a straightforward statutory analysis of CAFA.
CAFA authorizes the removal of any civil action which is a class action in which (1) “the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs,”
Inasmuch as West Virginia‘s action was commenced in state court, it was obviously not commenced under
A state statute or rule is “similar” to
At its essence, Rule 23 provides that “one or more members of a class may sue or be sued as representative parties on
Instead, the Attorney General filed a statutorily authorized action on the State‘s behalf, asserting claims arising exclusively under state consumer protection statutes. Count I alleges that the Pharmacies violated state law regulating the practice of pharmacy in West Virginia, particularly
Section 46A-7-111, on which Count III is based, authorizes the Attorney General to pursue refunds on behalf of consumers affected by “excess charges” and to seek civil penalties where the excess charges were repeatedly and willfully collected by a defendant.
These West Virginia statutes, on which the Attorney General relies for his claims, contain virtually none of the essential re-
Moreover, neither the Pharmacy Act nor the WVCCPA contains any numerosity, commonality, or typicality requirements, all of which are essential to a class action.
Finally, these Acts authorize the Attorney General to proceed without providing notice to overcharged consumers, which would also be essential in a Rule 23 class action seeking monetary damages. See Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 812, 105 S.Ct. 2965, 86 L.Ed.2d 628 (1985).
The Pharmacies argue that the suit is nonetheless a “disguised class ac-
Indeed, the West Virginia Attorney General‘s role here is more analogous to the role of the EEOC or other regulator when it brings an action on behalf of a large group of employees or a segment of the public. Yet, the Supreme Court has concluded that such a regulator‘s action is not a class action of the kind defined in Rule 23. For example, in General Telephone Co. v. EEOC, 446 U.S. 318, 334 & n. 16, 100 S.Ct. 1698, 64 L.Ed.2d 319 (1980), the Supreme Court held that a sex-discrimination suit brought by the EEOC under Title VII was “not properly characterized as a ‘class action’ subject to the procedural requirements of Rule 23.” The Court reached that conclusion despite the fact that the suit sought back pay and other relief on behalf of all of the employer‘s adversely affected employees in California, Idaho, Montana, and Oregon. Id. at 321, 324. Likewise, in Edmond, we held that a bankruptcy claim brought by the Maryland Attorney General‘s Office “on behalf of itself and all [affected Maryland] consumers” did not need to comply with Rule 23, even though one of the claim‘s primary purposes was to provide individual citizens with refunds pursuant Maryland‘s Consumer Protection Act. See 934 F.2d at 1306; see also id. at 1310-13.
Much like the statutes at issue in General Telephone and Edmond, the WVCCPA authorizes the Attorney General to bring enforcement actions against violators and, in so doing, to pursue relief on behalf of aggrieved individuals. See Scott Runyan, 461 S.E.2d at 523-24. Yet that type of representation by the State is no more characteristic of the representational nature of a class action than were the claims in General Telephone and Edmond. Neither the State nor the Attorney General is a member of the class purportedly represented, and neither suffered the same injury as the citizens in that class.
The Pharmacies nonetheless argue that CAFA‘s legislative history supports their position. In particular, they point to Senate Report 109-14, which outlines the Senate Judiciary Committee‘s views, and several floor statements made during debate on the Act. Senate Report 109-14, however, was issued 10 days after CAFA was signed into law, and for that reason alone, it is a questionable source of congressional intent. See Coll. of Dental Surgeons v. Conn. Gen. Life Ins. Co., 585 F.3d 33, 38 n. 2 (1st Cir.2009); see also Weinberger v. Rossi, 456 U.S. 25, 35, 102 S.Ct. 1510, 71 L.Ed.2d 715 (1982) (“[P]ost hoc statements of a congressional Committee are not entitled to much weight“). Moreover, while some floor statements cited by the Pharmacies are favorable to their arguments, others cited by the Attorney General, from the same Senator and the same page of the Congressional Record, point in the opposite direction. Compare 151 Cong. Rec. S1163 (daily ed. Feb. 9, 2005) (statement of Sen. Charles Grassley that a subsequently defeated amendment intended to exempt suits brought by state attorneys general would have “create[d] a very serious loophole“), with id. (statement of Sen. Charles Grassley that “the amendment [was] not necessary” because “cases brought by State attorneys general will not be affected by this bill“). This legislative history is hardly probative.
In sum, we conclude that because the action before us was not brought under
III
The West Virginia Attorney General initially filed this action in a West Virginia state court to enforce, on behalf of West Virginia and its citizens, state consumer protection laws applicable only in West Virginia. Were we now to mandate that the State was not entitled to pursue its action in its own courts, we would risk trampling on the sovereign dignity of the State and inappropriately transforming what is essentially a West Virginia matter into a federal case. The Pharmacies nonetheless rationalize such a transformation on the basis that the Attorney General somehow mispleaded his case, disguising what would otherwise be a CAFA class action.
The Pharmacies’ approach, however, would have to ignore the Attorney General‘s stated basis for his action of seeking to vindicate West Virginia‘s interests in how pharmacies may charge West Virginia consumers in filling prescriptions. If we accept the Attorney General‘s good faith in pleading his claims—and we are given no reason not to—the Pharmacies have no basis, real or postured, to assert that this is an “interstate case of national importance,” the defining federal interest animating CAFA‘s removal provisions. See CAFA, Pub.L. No. 109-2 § 2(b)(2).
To be sure, CAFA does protect important federal interests in addressing state abuses in interstate class actions. It was enacted to prevent States from keeping “cases of national importance out of Federal court” and making “judgments that impose their view of the law on other States and bind the rights of the residents of those states.”
In this case, where West Virginia has raised no federal question and where all persons on whose behalf West Virginia has filed this action are West Virginia citizens, the “claim of sovereign protection from removal [arises] in its most powerful form.” In re Katrina Canal Litig. Breaches, 524 F.3d 700, 706 (5th Cir.2008). Such sovereign protection derives from our constitutional structure and serves the important function of preserving the “dignity” to which states are entitled “as residuary sovereigns and joint participants in the governance of the Nation.” Alden v. Maine, 527 U.S. 706, 713-14, 748-49, 119 S.Ct. 2240, 144 L.Ed.2d 636 (1999); see also Idaho v. Coeur d‘Alene Tribe, 521 U.S. 261, 268, 117 S.Ct. 2028, 138 L.Ed.2d 438 (1997). It does so by preventing States from being involuntarily “dragged” into any court—a prerogative of sovereigns well established at the time of the founding. See Alden, 527 U.S. at 715-18.
While it is true that West Virginia voluntarily entered into its own courts to enforce its laws, it did not voluntarily consent to removal of its case to a federal court, and a federal court should be most reluctant to compel such removal, reserving its constitutional supremacy only for when removal serves an overriding federal interest. See Tennessee v. Davis, 100 U.S. 257, 266-67, 25 L.Ed. 648 (1880). It is telling that “[n]one of the cases or founding history speak directly to” the question of “whether a state as a plaintiff suing defendants over whom it has regulatory
We conclude, in the circumstances presented here, that CAFA does not clearly demand that West Virginia‘s action, which is essentially a parens patriae type of action for enforcement of its own laws on behalf of itself and its citizens, be removed to federal court, even though the Pharmacies are citizens of States different from West Virginia. The Pharmacies are summoned to West Virginia courts only because they do business in West Virginia and, while there, allegedly violated its laws.
We emphasize, however, that even as our interpretation of CAFA recognizes West Virginia‘s important sovereign interests, it should not be taken as an interpretation that lessens CAFA‘s scope and important federal purposes. We simply conclude that removal of this action does not serve those federal interests as articulated in CAFA.
Accordingly, the district court‘s order remanding this matter to the Circuit Court for Boone County is
AFFIRMED.
GILMAN, Senior Circuit Judge, dissenting:
The majority has concluded that the Class Action Fairness Act (CAFA) does not provide federal jurisdiction over the West Virginia Attorney General‘s lawsuit because this case is a parens patriae action and not a “class action” as defined by CAFA. For the reasons set forth below, I respectfully disagree.
The primary difficulty in this case, as I see it, is that CAFA does not actually define a class action. As the majority notes, CAFA‘s definition of a class action is essentially circular: “the term ‘class action’ means any civil action filed under rule 23 of the Federal Rules of Civil Procedure or similar State statute or rule of judicial procedure authorizing an action to be brought by 1 or more representative persons as a class action.”
In my view, the essence of a class action is set forth in the first sentence of the term‘s definition in Black‘s Law Dictionary: “A lawsuit in which the court authorizes a single person or a small group of people to represent the interests of a larger group....” Black‘s Law Dictionary 284 (9th ed.2009). I believe that the present suit brought by the Attorney General squarely fits within that authoritative definition of a class action.
True enough, as the majority points out, the Attorney General‘s suit was not brought under
To decide whether CAFA grants federal jurisdiction over the Attorney General‘s
The Attorney General brings this suit in what he alleges is West Virginia‘s parens patriae capacity. “In order to maintain such an action, the State must articulate an interest apart from the interests of particular private parties,” also known as a “quasi-sovereign interest.” Alfred L. Snapp & Son, Inc. v. Puerto Rico ex rel. Barez, 458 U.S. 592, 607, 102 S.Ct. 3260, 73 L.Ed.2d 995 (1982). The Supreme Court has stated that there are two general categories of quasi-sovereign interests: (1) a state‘s interest in the physical and economic well-being of its citizens in general, and (2) a state‘s interest in “not being discriminatorily denied its rightful status within the federal system.” Id.
Snapp provides an example of a valid quasi-sovereign interest. In that case, the Attorney General of Puerto Rico alleged that certain east-coast apple growers were violating federal labor and immigration laws by discriminating against Puerto Ricans in favor of foreign laborers. The Supreme Court concluded that Puerto Rico has a “substantial interest in assuring its residents that it will act to protect them” from discrimination. Id. at 609. Alternatively, the Court concluded that Puerto Rico had parens patriae standing to “pursue the interests of its residents in the Commonwealth‘s full and equal participation in the federal employment service scheme.” Id.
Other examples of successful parens patriae actions include cases where a state has sought to enjoin a public nuisance or ensure the economic well-being of its citizenry generally. See, e.g., Missouri v. Illinois, 180 U.S. 208, 248, 21 S.Ct. 331, 45 L.Ed. 497 (1901) (holding that Missouri could pursue an injunction to prevent the defendants from discharging sewage in such a way that polluted the Mississippi River in Missouri); Pennsylvania v. West Virginia, 262 U.S. 553, 592, 43 S.Ct. 658, 67 L.Ed. 1117 (1923) (recognizing Pennsylvania and Ohio as the proper parties to represent the interests of their citizens in maintaining access to natural gas produced in West Virginia); Georgia v. Pennsylvania R. Co., 324 U.S. 439, 450, 65 S.Ct. 716, 89 L.Ed. 1051 (1945) (holding that Georgia had an interest apart from that of its citizens where numerous railroads had conspired to fix freight rates in a manner that discriminated against Georgia shippers in violation of federal antitrust laws). “In sum, if a state can demonstrate that, in bringing an action, it seeks only to protect the well-being of its residents in general, it has expressed a quasi-sovereign interest in the entire action.” West Virginia ex rel. McGraw v. Comcast Corp., 705 F.Supp.2d 441, 446 (E.D.Pa.2010).
The “analytical framework in which a court examines a state‘s claims for relief has a powerful impact on the court‘s ultimate conclusion as to whether the state has a quasi-sovereign interest in all the relief it seeks.” Id. at 447. Like the Fifth Circuit in Caldwell, and the Eastern District of Pennsylvania in Comcast, I would adopt a claim-by-claim approach to determine if West Virginia has a sufficient quasi-sovereign interest such that it is acting within its parens patriae authority. This framework best aligns with CAFA‘s expansion of federal jurisdiction over class actions. See Comcast, 705 F.Supp.2d at 449 (“The claim-by-claim approach does a better job of unearthing a state‘s real interest in a suit because, unlike the wholesale approach, it does not blur the lines between those claims for which a state has a well-recognized interest, and those claims for which a state‘s interest is negligible.“).
In Caldwell, the Louisiana Attorney General filed a state-court lawsuit styled as a parens patriae action against several insurance companies and other defendants. The suit sought forfeiture of illegal profits, treble damages, and injunctive relief due to the defendants allegedly agreeing to undervalue and underpay certain insurance claims of Louisiana citizens, in violation of Louisiana‘s antitrust laws. See Louisiana ex. rel. Caldwell v. Allstate Ins. Co., 536 F.3d 418, 422-23 (5th Cir.2008). Upon review, the Fifth Circuit concluded that the Attorney General was only a nominal party in interest for purposes of the treble-damages claim in light of the fact that the state was seeking to recover those damages on behalf of individual policyholders. In reaching this conclusion, the Fifth Circuit stated that it was mindful that Louisiana was also seeking injunctive relief, a remedy clearly sought on behalf of the state. Id. at 430. But the court ultimately concluded that despite the request for injunctive relief, the individual policyholders were the real parties in interest and, because the requirements of a “mass action” were met, the action was properly removed under CAFA. Id.
Similarly, in Comcast, the United States District Court for the Eastern District of Pennsylvania found that the Attorney General was not acting within West Virginia‘s parens patriae authority where he sought relief for a “discrete group of Comcast‘s premium subscribers.” Comcast, 705 F.Supp.2d at 450. In that case, the district court concluded that West Virginia did not have a quasi-sovereign interest in the antitrust treble and compensatory-damages claims. The court further held that the West Virginia Antitrust Act was sufficiently similar to Rule 23 of the Federal Rules of Civil Procedure to meet CAFA‘s requirements, thereby conferring federal jurisdiction over the case. Id. at 454.
Here, the Attorney General asserts that the defendants (the Pharmacies) violated West Virginia‘s Pharmacy Act and the WVCCPA, and he seeks damages payable directly to the allegedly aggrieved West Virginia purchasers of generic drugs under
I reach this conclusion for two reasons: (1) the WVCCPA provides that a ruling that the consumers have been overcharged will result in those overcharges being remitted directly to the consumers, and (2)
Just as the Louisiana Attorney General did not have a quasi-sovereign interest in the treble-damages relief he sought on behalf of individual policyholders in Caldwell, the West Virginia Attorney General here does not have a quasi-sovereign interest in the refunds that the Pharmacies will be required to pay directly to the affected consumers if they are found to have violated the WVCCPA. Admittedly, the Attorney General is also seeking civil penalties and injunctive relief, these being the type of claims clearly within the state‘s parens patriae authority. But for the reasons stated above, I do not believe that these claims are the primary focus of this case, and are instead subsidiary claims that will be considered by the trial court only if the primary claim of reimbursement to the allegedly overcharged consumers is successful.
I believe that my analysis is strengthened by the fact that some of the same private attorneys representing the Attorney General here are simultaneously representing individuals who have filed essentially identical claims against the same defendants in Michigan and Minnesota. No one questions that those cases are class actions; in fact, they were filed as class actions. See Graphic Comms. Local 1B Health & Welfare Fund “A” v. CVS Caremark Corp., No. 09-cv-2203 (D.Minn); City of Lansing v. CVS Caremark Corp., No. 09-994 (30th Jud. Cir., Ingham County, Mich). If one were to close one‘s eyes as to who the named plaintiff is in the three lawsuits, there is no way to detect a material difference between the Attorney General‘s request for repayment to overcharged consumers under
CAFA‘s legislative history, which is admittedly limited, also supports my conclusion that this case is simply not a parens patriae action. During the debate in the U.S. Senate over CAFA, Senator Pryor proposed an amendment that would have exempted all class actions filed by state attorneys general from removal under CAFA. See 151 Cong. Rec. S1157 (daily ed. Feb. 9, 2005). Both Senators Grassley (a cosponsor of CAFA) and Hatch (the former chair of the Senate Judiciary Committee) opposed the Pryor Amendment because, among other things, the Amendment risked “creating a situation where State attorneys general can be used as pawns so that crafty class action lawyers can avoid the jurisdictional provisions of [CAFA]” by “simply includ[ing] in their complaint a State attorney general‘s name as a purported class member.” Id. at 1163-64.
The concern that Senators Grassley and Hatch expressed in opposing the ultimately defeated Pryor Amendment is exactly what has come to fruition here. I believe that the West Virginia Attorney General has been “used as a pawn” so that the private class-action lawyers can remain in state court and avoid the impact of CAFA, despite the fact that the real parties in interest are the allegedly aggrieved West Virginia consumers and not the state.
Having concluded that the affected West Virginia consumers are the real parties in
[CAFA‘s] application should not be confined solely to lawsuits that are labeled “class actions” by the named plaintiff or the state rulemaking authority. Generally speaking, lawsuits that resemble a purported class action should be considered class actions for the purpose of applying these provisions.
S.Rep. No. 109-14, at 35, 2005 U.S.C.C.A.N. 3, 34 (2005).
Here, the West Virginia Attorney General is representing a large group of West Virginia citizens who have allegedly been overcharged by the Pharmacies in their purchase of generic drugs. Yet their claims are too small on an individual basis to justify any one of them bringing suit alone. This is exactly the type of situation that class actions were designed to address. See Montgomery Ward & Co. v. Langer, 168 F.2d 182, 187 (8th Cir.1948) (“The class action was an invention of equity mothered by the practical necessity of providing a procedural device so that mere numbers would not disable large groups of individuals, united in interest, from enforcing their equitable rights nor grant them immunity from their equitable wrongs.” (internal citation omitted)).
Further, the WVCCPA clearly contemplates that the Attorney General can fairly and adequately protect the interests of West Virginia‘s generic-drug purchasers by bringing this type of lawsuit on behalf of the class. See Comcast, 705 F.Supp.2d at 453 (“The [West Virginia Antitrust Statute] assumes that the state attorney general is an adequate representative....“). The majority apparently disagrees, concluding that the Attorney General‘s lawsuit cannot be considered a class action because the Attorney General is not an actual member of the class. It principally relies on the case of General Telephone Co. of Southwest v. Falcon, 457 U.S. 147, 156, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982), to support its conclusion.
Falcon is a Title VII case in which Mexican-American employees filed suit against their employer for alleged discrimination in hiring and promoting. The Supreme Court held that the class representative‘s complaint failed to include any “specific presentation identifying the questions of law or fact that were common to the claims of respondent and of the members of the class he sought to represent.” Id. at 158. Specifically, the evidentiary approaches to the individual and class claims were entirely different because the class representative “attempted to sustain his individual claim by proving intentional discrimination, [whereas he] tried to prove the class claims through statistical evidence of disparate impact.” Id. at 159.
I have no problem with the majority‘s proposition that the class representative‘s claims should be typical of those of the class as a whole. But Falcon is distinguishable from this case. Unlike the class representative in Falcon, whose claims were not typical of the class, the putative class in this case is comprised of identically situated West Virginia consumers who have allegedly been overcharged for their generic drugs. I therefore believe that the majority‘s conclusion that the Attorney
The Fifth Circuit, in fact, did not even discuss the point that the Louisiana Attorney General himself was not actually harmed. Rather, the court simply concluded that the lawsuit was “brought in a representative capacity on behalf of those who allegedly suffered harm.” See Caldwell, 536 F.3d at 430; see also Comcast, 705 F.Supp.2d at 453 (stating that the West Virginia Antitrust Act assumes that the Attorney General is an adequate representative).
The majority also relies on General Telephone Co. of the Northwest, Inc. v. EEOC, 446 U.S. 318, 100 S.Ct. 1698, 64 L.Ed.2d 319 (1980), and In re Edmond, 934 F.2d 1304 (4th Cir.1991), to conclude that the Attorney General‘s role in this case “is more analogous to the role of the EEOC or other regulator when it brings an action on behalf of a large group of employees or a segment of the public.” But these cases are distinguishable. General Telephone involved a Title VII action filed by the EEOC in its own name pursuant to its authority under § 706 of the Civil Rights Act of 1964. The Supreme Court concluded that where the EEOC acts under § 706, “it acts also to vindicate the public interest in preventing employment discrimination,” and not as a class representative. Id. at 326. Section 706 expressly authorizes the EEOC to bring a “civil action against any respondent ... upon failure to secure an acceptable conciliation agreement, the purpose of the action being to terminate unlawful practices and to secure appropriate relief.” Id. at 324. And the EEOC has exclusive jurisdiction for the 180-day period following the filing of a charge with the Commission.
In contrast, the Attorney General‘s power under
In re Edmond is also distinguishable. In that case, the Fourth Circuit held that the Maryland Consumer Protection Act gave the Maryland Consumer Protection Division parens patriae authority to bring a nondischargeability proceeding against a debtor. The court concluded that the Consumer Protection Division was acting on behalf of the state‘s quasi-sovereign interest because (1) the Maryland Consumer Protection Act grants the Consumer Protection Division the authority to “initiate administrative hearings to obtain a cease and desist order on its own initiative,” and (2) the Division has the ability to require disgorgement, in the absence of individual complaints, and in some cases “over and above that which will be returned to individuals.” In re Edmond, 934 F.2d at 1310-11 (internal quotation marks omitted).
Unlike the Maryland Consumer Protection Act,
As mentioned above, the allegedly overcharged consumer, like any putative class member considering whether to join a class action, has the ultimate say as to whether to be bound by the Attorney General‘s lawsuit.
[i]f a consumer brings an action against a creditor to recover an excess charge or civil penalty, an action by the attorney general to recover for the same excess charge shall be stayed while the consumer‘s action is pending and shall be dismissed if the consumer‘s action is dismissed with prejudice or results in a final judgment granting or denying the consumer‘s claim.
The Attorney General‘s power over a particular generic-drug purchaser‘s claim is thus ultimately controlled by the consumer. I therefore believe that
One final issue that the majority addresses is the concept of sovereign immunity. But because West Virginia voluntarily brought this lawsuit, I see no Eleventh Amendment or sovereign immunity concerns in asserting federal jurisdiction over this case. See In re Methyl Tertiary Butyl Ether (“MTBE“) Prods. Liab. Litig., 488 F.3d 112, 118-120 (2d Cir.2007) (explaining that the “removal of the cases here was the result of the voluntary acts of California and New Hampshire in commencing the lawsuits against the defendants [and,] having done so, these states subjected themselves to all the rules and consequences attendant to that decision“); see also California ex rel. Lockyer v. Dynegy, Inc., 375 F.3d 831, 848 (9th Cir.2004) (rejecting the state‘s argument that involuntary removal is equal to commencing a suit against the state because “where a State voluntarily becomes a party to a cause and submits its rights for judicial determination, it will be bound thereby and cannot escape the result of its own voluntary act by invoking the prohibitions of the Eleventh Amendment“) (quoting Gunter v. Atl. Coast Line R.R. Co., 200 U.S. 273, 284, 26 S.Ct. 252, 50 L.Ed. 477 (1906)).
In sum, there is a saying that if something looks like a duck, walks like a duck, and quacks like a duck, it is probably a duck. To my mind this case “quacks” much more like a CAFA class action than a parens patriae case. I would therefore reverse the judgment of the district court and allow this case to proceed in federal court.