Avera Gettysburg v. Teva Pharmaceutical Industries, Ltd.

Background

Several hospitals and healthcare systems filed this action in Hennepin County District Court. They sued companies that market and distribute opioid medications. The complaint alleges that the marketing defendants engaged in false, deceptive, and unfair opioid marketing, and that the defendants failed to protect against suspicious opioid orders, contributing to a public health epidemic.

The complaint asserts six claims under the laws of Minnesota, Nebraska, North Dakota, and South Dakota, involving consumer fraud, deceptive trade practices, and false advertising. It also asserts common-law claims for nuisance, fraud and deceit, civil conspiracy, and unjust enrichment.

Cardinal Health, Inc. removed the case to federal court. It argued that the claims arose under federal law because the complaint relied on the federal Controlled Substances Act and its implementing regulations. The plaintiffs moved to remand, arguing that their claims were exclusively based on state law and did not present a substantial federal question.

Legal Standard

A federal court must remand a removed case if it lacks subject-matter jurisdiction, meaning legal authority over the case. The party that removed the case bears the burden of establishing federal jurisdiction, and doubts are resolved in favor of remand.

Although a plaintiff generally can avoid federal-question jurisdiction by relying only on state law, a state-law claim may sometimes be heard in federal court if it necessarily raises a substantial and disputed federal issue. The court described this as the narrow exception known as the Grable doctrine. To qualify, the federal issue must be necessarily raised, actually disputed, substantial, and capable of resolution in federal court without upsetting the balance between federal and state judicial responsibilities.

Analysis

The defendants focused on the plaintiffs’ public-nuisance claim. They argued that the claim depended entirely on duties imposed by the Controlled Substances Act. The court disagreed.

The court noted that the complaint referred to the Controlled Substances Act and federal regulations concerning suspicious orders, diversion controls, recordkeeping, and related obligations. But the mere presence of federal issues in a state-law claim does not automatically create federal jurisdiction. The court also observed that the complaint referred to similar duties under Minnesota and other states’ laws. Thus, the nuisance claim could potentially be evaluated under state-law standards without deciding an issue under the federal Act.

The court concluded that the defendants had not shown that the plaintiffs’ nuisance claim necessarily depended on federal law. The court further noted that the Controlled Substances Act does not provide a private right of action, which reinforced its conclusion that the complaint did not necessarily raise a federal question.

Disposition

The court granted the plaintiffs’ Motion to Remand and remanded the matter to the State of Minnesota District Court, Fourth Judicial District, County of Hennepin. The ruling addressed federal subject-matter jurisdiction and did not decide the underlying state-law claims.