Ninth Circuit Rejects CAFA Removal Bid in Teva Pain Drug Cases
In a rare win for plaintiffs involving the Class Action Fairness Act, the U.S. Court of Appeals for the Ninth Circuit ruled Tuesday that a mass pharmaceutical action involving hundreds of individual plaintiffs can stay in a California state court, notwithstanding the objections of defendant Teva Pharmaceuticals USA, amicus U.S. Chamber of Commerce, and a dissenting judge.
The court ruled that a coordinated mass action involving 1,500 individual plaintiffs does not belong in federal court because the four plaintiff firms said they were joining the cases together primarily for pretrial purposes. Dissenting Judge Ronald Gould said the case is exactly the type designated for federal court, regardless of how the plaintiffs characterized it.
"The United States Supreme Court has recently pointed out there are limits to how far plaintiffs may go in structuring their complaints to avoid federal jurisdiction," he warned in Romo v. Teva Phramaceuticals U.S.A.
CAFA requires that mass actions be removed to federal court when they are "proposed to be tried jointly." But when the four plaintiff firms suing Teva asked the California Judicial Council to join their cases into a single proceeding, they emphasized the benefits for discovery and other pretrial issues. That wording was enough to keep them in state court, the Ninth Circuit ruled.
"The plaintiffs' petition for coordination stopped far short of proposing a joint trial," Judge Johnnie Rawlinson wrote for a unanimous panel. "This fact is important because … both the Supreme Court and our court recognize that the plaintiff is, and should be, in control of selection of the litigation forum."
Rawlinson relied heavily on a 2009 Ninth Circuit decision, Tanoh v. Dow Chemical, despite arguments from the Chamber of Commerce that Tanoh had been undermined by a U.S. Supreme Court decision earlier this year on CAFA jurisdiction.
"We reject this argument because we agree with the reasoning of Tanoh, because as a three-judge panel we do not have authority to overrule a prior circuit precedent, and because the Chamber of Commerce's position would put us at odds with the Seventh Circuit, which cited Tanoh approvingly in [ In re Abbott Laboratories], and the Eleventh Circuit, which did so in Scimone [v. Carnival Corp.]," Rawlinson wrote.
U.S. District Judge Ivan Lemelle, visiting from Louisiana, concurred.
In his dissent, Gould said the court was in fact creating a circuit split "for practical purposes." In substance, he wrote, Romo "fits CAFA removal like a glove under a reasonable assessment of waht is a proposal for joint trial."
Judith Romo is one of some 1,500 plaintiffs suing Teva, McKesson Corp. and other drug makers over the pain medication propoxyphene, an ingredient found in Darvon, Darvocet and related generics. The drug was in circulation for about 50 years before it was taken off the market in 2010 due to FDA concerns.
The case was originally brought as 40 separate actions in various California courts, each under the 100-plaintiff limit that would trigger CAFA. Four firms representing most of the plaintiffs — The Sizemore Law Firm; Esner Chang & Boyer; Khorrami and Sill Law Group — then petitioned the Judicial Council to join the cases in a single coordinated proceeding.
Teva moved to remand to federal court, arguing that the plaintiffs firms were deliberately circumventing CAFA. In any event, the number of plaintiffs now greatly exceeds 100, Teva argued, and the plaintiffs had sought coordination "for all purposes," meaning that they are proposing a "joint trial" as described by CAFA.
But, said Rawlinson, the coordination petition focused mostly on avoiding duplicative discovery, conserving judicial resources and the threat of inconsistent rulings on legal issues. "One would be hard pressed to parse a proposal for a joint trial from this language," Rawlinson wrote. "Rather, the obvious focus was on pretrial proceedings, i.e., discovery matters."
And the Ninth Circuit's Tanoh precedent makes clear that "plaintiffs are 'the masters of their complaint,' and do not propose a joint trial simply by structuring their complaints so as to avoid the 100-plaintiff threshold," Rawlinson added.
Rawlinson also noted that three "eminent California judges" — U.S. District Judges Claudia Wilken, Richard Seeborg and William Alsup, all of the Northern District of California — had issued similar rulings. Rawlinson's decision affirmed U.S. District Judge Philip Gutierrez of Los Angeles.
But the result seems to cut against other recent appellate outcomes involving CAFA and jurisdiction. In March the Supreme Court ruled in Standard Fire v. Knowles that plaintiffs counsel could not avoid CAFA by stipulating that the class would seek less than $5 million in damages. In August the Ninth Circuit ruled that under Standard Fire, defendants need only show by a preponderance of the evidence that damages are likely to exceed $5 million.
Those were class action cases. Last year, the Seventh Circuit ruled in In re Abbott that a consolidated mass action involving the medicine Depakote came under CAFA provisions. But in that case, the plaintiffs' petition explicitly requested consolidation of the cases "through trial" and "not solely for pretrial proceedings."
Esner Chang's Stuart Esner argued the appeal for the plaintiffs. Greenberg Traurig partner Karin Bohmholdt argued for Teva.