Aetna Inc. v. Gilead Sciences, Inc.

Background

Aetna filed an antitrust lawsuit in state court against Gilead Sciences, Inc., BMS, and Janssen. Its complaint asserted only state-law claims. Gilead removed the case to federal court, relying on diversity jurisdiction and federal-question jurisdiction.

The parties agreed that diversity jurisdiction existed because the parties were completely diverse and the amount in controversy exceeded $75,000. The dispute was whether the forum-defendant rule prevented removal. That rule generally bars removal based only on diversity jurisdiction when a properly served defendant is a citizen of the state where the case was filed.

Aetna had previously filed a substantially similar lawsuit, called Aetna I, which Gilead removed before service. Aetna later voluntarily dismissed Aetna I and filed the current lawsuit, Aetna II, in state court. Aetna served Gilead and other U.S.-based defendants before Gilead removed Aetna II. Defendants argued that Aetna had manipulated the removal process and should be prevented from relying on the forum-defendant rule. Defendants also asked the court to stop Aetna from pursuing Aetna II in state court.

Forum-Defendant Rule

The court held that Gilead had been properly served under state law. It rejected defendants’ argument that service should not count because Aetna had filed Aetna II and dismissed Aetna I to defeat removal. The court explained that the phrase “properly served” ordinarily asks whether service complied with state law, and defendants identified no authority supporting a broader interpretation.

The court agreed that the forum-defendant rule is procedural rather than jurisdictional, meaning it can be waived and may be subject to equitable estoppel. The court assumed, without deciding, that estoppel could prevent a party from invoking the rule in appropriate circumstances. It nevertheless rejected defendants’ estoppel argument.

The court found that both sides had engaged in forum-related strategic conduct. Gilead had used “snap removal” in Aetna I by removing the case before it was served, while Aetna later used a voluntary dismissal and refiling strategy. But the court concluded that Aetna’s voluntary dismissal was permitted by Federal Rule of Civil Procedure 41. The dismissal occurred early in the case, before an answer or summary-judgment motion, and Aetna’s motive did not invalidate an otherwise proper dismissal. The court also found no express promise, implied agreement, or reasonable reliance that barred Aetna from voluntarily dismissing Aetna I.

Federal-Question Jurisdiction

The court considered whether Aetna’s state-law claims fell within the narrow category of state-law claims that may be heard in federal court because they necessarily raise a substantial federal issue. The relevant test asks whether the claim necessarily raises a federal issue that is actually disputed and substantial and can be resolved in federal court without upsetting the balance between federal and state courts.

Defendants identified federal issues involving drug-regulatory law, patent law, and federal antitrust law. The court concluded that the test was not satisfied.

Regarding federal drug-regulatory law, the court acknowledged that Aetna’s allegations that generic drugs could have entered the market earlier might necessarily involve federal issues concerning Food and Drug Administration approval. But the court held that any such issues were not substantial in the required sense. The claims were fact-specific and concerned particular settlement agreements and alleged conduct, rather than a nearly pure legal issue whose resolution would have broad importance for the federal system.

The court reached the same conclusion regarding patent law. It questioned whether it would need to decide the actual validity of the patents, as opposed to their likely invalidity. Even assuming a federal patent issue was necessarily raised, the court found no novel or broadly significant patent-law question. It also noted Aetna’s argument that the patents had expired, making the patent issue backward-looking and hypothetical.

The court rejected defendants’ argument that Aetna’s California antitrust claims were actually federal monopolization claims. The complaint alleged concerted conduct by Gilead and other defendants, which could support claims under California’s Cartwright Act. The court therefore found no independent federal antitrust basis for jurisdiction.

Injunction Request and Disposition

The court concluded that the forum-defendant rule applied and that federal-question jurisdiction was lacking. It granted Aetna’s motion to remand Aetna II to state court.

The court denied defendants’ cross-motion for a permanent injunction. Because Aetna had acted within its rights in voluntarily dismissing Aetna I, and because Aetna II was being remanded rather than remaining as a pending federal case, the court found no basis to enjoin Aetna from prosecuting the case in state court.

Judge Edward M. Chen’s order granted Aetna’s motion to remand and denied defendants’ cross-motion for an injunction. The order disposed of Docket Nos. 18 and 26.