Friday, August 7, 2015
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Ninth Circuit Returns Diabetes Drug Litigation to State Court
By KENNETH OFGANG, Staff Writer
Five multi-plaintiff lawsuits alleging that pharmaceutical manufacturers failed to warn users of diabetes drugs that they can have harmful side effects belong in state, not federal, court, the Ninth U.S. Circuit Court of Appeals ruled yesterday.
The panel said a district judge in San Diego erred by ruling that the suits were removable to federal court as “mass actions” under the Class Action Fairness Act.
The complaints against Merck Sharp & Dohme and others allege that the defendants failed to warn that incretin-based drugs—including Byetta, Januvia, and Janument—may cause diseases of the pancreas, including cancer. Incretins are metabolic hormones that stimulate a decrease in blood glucose levels.
The Class Action Fairness Act, or CAFA, allows defendants in putative class actions or mass actions to remove them to federal court, subject to certain exceptions. A mass action is defined as one in in which “monetary relief claims of 100 or more persons are proposed to be tried jointly.”
Meaning of ‘Proposal’
The Ninth Circuit and other courts have held that a “proposal” for a joint trial must be made by the plaintiffs, and not the defendants, for a proceeding to be treated as a mass action under CAFA.
None of the five suits affected by yesterday’s ruling had 100 or more plaintiffs, but defendant Merck, Sharp & Dohme removed them from San Diego Superior Court to the U.S. District Court for the Southern District of California. When the plaintiffs moved to remand the cases to state court, Merck argued that they should be treated as a single mass action under CAFA because they involved common factual claims and, to some extent, common counsel.
One group of lawyers represents the plaintiffs in three of the lawsuits, and another represents the plaintiffs in the other two.
At the time the San Diego cases were filed, a coordination proceeding involving Byetta was already pending before Los Angeles Superior Court Judge William Highberger, and cases involving the other incretin-based drugs and other defendants, including Merck, have been added to that action since. The case management order in that proceeding expressly states that no determination has been made that the actions should be tried together.
Also pending at the time the five cases were filed was a set of incretin cases that have been declared to constitute multi-district litigation and assigned to U.S. District Judge Anthony Battaglia in the Southern District. When Merck removed the five cases, they were found to be related to the multi-district litigation—MDL in federal parlance—and assigned to Battaglia as well.
Motions Denied
Battaglia eventually denied the plaintiffs’ motions for remand. He cited plaintiffs’ counsel’s representation that the cases were likely, if remanded, to wind up as part of the coordination proceeding and accepted the defense argument that there was at least an implicit understanding that the claims would be tried jointly and thus constitute a mass action.
The plaintiffs moved to reconsider the remand order, a motion that was denied. The plaintiffs then sought relief from the Ninth Circuit under CAFA’s interlocutory appellate provision.
Rejecting the defendant’s jurisdictional objection, the Ninth Circuit panel yesterday held that the denial of a motion to reconsider the court’s original order on a motion to remand triggers a new 10-day period in which to appeal, so the appeal was timely.
Turning to the merits, Judge William Fletcher said remand should have been granted because none of the five suits is a mass action under CAFA because there had been no “proposal” by the plaintiffs that the claims of more than 100 persons be tried jointly.
“From our understanding of the meaning of ‘proposal,’ it follows that nothing the…plaintiffs represented to the federal district court about what would or might happen to their cases, if they were remanded to state court, qualified as a proposal for a joint trial,” Fletcher wrote.
Lack of Authority
Counsel had, at most, cited the prospect of consolidation with the proceeding before Highberger as one reason for remand, Fletcher explained. And even if counsel were expressing an intent to join the coordination proceeding, the appellate jurist continued, “these statements could not have been ‘proposals,’ given that the district court lacked any authority to join plaintiffs’ cases to” a proceeding in state court.
While there is a “strong likelihood” that the remanded cases will be joined to the coordination proceeding, Fletcher added, that likelihood is not a certainty, and the mere fact that the plaintiffs filed their suits in a California state court after the initial coordination does not mean they have proposed a joint trial.
Fletcher went on to say that the plaintiffs in one of the five cases did not propose a joint trial by petitioning, in state court, to join the coordination proceeding, since even if such petition were granted, it would not necessarily mean a joint trial of those plaintiffs’ claims.
Judges Richard Paez and Marsha Berzon joined in the opinion.
The case is Briggs v. Merck Sharp & Dohme, 15-55873.
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