PHILADELPHIA – A federal judge has declared that a lawsuit brought by the City of Philadelphia against several pharmaceutical distributors and retailers for their role in allegedly creating and exacerbating the opioid epidemic in Philadelphia, will be remanded to state court for lack of federal jurisdiction.
The City filed the action in the Philadelphia County Court of Common Pleas on Sept. 28, 2021. The complaint states claims for public nuisance (Count I), violations of the Pennsylvania Unfair Trade Practices and Consumer Protection Law (UTPCPL) (Count II) and unjust enrichment (Count III), which are Pennsylvania state law claims.
The defendants then removed the case to federal court on Oct. 26, 2021, under the auspices of both the Controlled Substances Act and the Class Action Fairness Act.
However, the City moved to remand the case on Oct.27, 2022, arguing the Court lacks jurisdiction and asking the Court to stay the proceedings until the Judicial Panel on Multidistrict Litigation issues a ruling on the defendants’ motion to transfer the case to the National Prescription Opiate Litigation MDL.
From there, the City opposed the motion to stay, after which the Court held a telephonic oral argument on the motions on Nov. 29, 2021 before U.S. District Court for the Eastern District of Pennsylvania Judge Juan R. Sanchez.
“The complaint discusses defendants’ duty as pharmaceutical distributors under the Controlled Substances Act to support its allegations that defendants are liable for its state law claims. This is insufficient to create federal question jurisdiction. This case is not a class-action and is not removable under the Class Action Fairness Act. Because the Court has no other grounds for federal jurisdiction, removal was improper and the Court must remand the case,” Sanchez said.
“The complaint sets forth extensive factual allegations and alternative legal theories to support its claims for public nuisance, unjust enrichment, and violations of the Pennsylvania UTPCPL statute. The issue of defendants’ CSA obligations therefore will not necessarily be raised. While the Court is capable of resolving these CSA issues should they arise as this litigation proceeds, defendants’ obligations under the CSA are only a small portion of this case, which is overwhelmingly based on state law.”
Sanchez further found that this case is also not removable under the Class Action Fairness Act.
“This case is not a class action. It was not filed under Rule 23 or any similar state statute or rule of judicial procedure. The City is a single, municipal plaintiff. The City seeks to recover damages for itself. The Complaint contains no class-specific allegations and does not offer a definition of a proposed class. This action does not prevent any injured Philadelphian from bringing an action against the same defendants. The City’s alleged damages are different in kind than any resident who may have been impacted by the opioid crisis and defendants’ alleged role in exacerbating it. The City therefore is not a representative,” Sanchez stated.
Sanchez explained that the National Prescription Opiate multi-district litigation was formed to “help bring uniformity to the vast sea of litigation” comprised of municipalities, townships and other organizations nationwide suing opioid manufacturers, distributors and retailers.
In other municipal opioid cases previously before this Court, Sanchez explained that in two of them, the Court granted the defendants’ motions to stay the proceedings while the JPML decided whether to transfer the case to the MDL. Those cases were in fact transferred. In the remaining cases, the JPML transferred the case before the Court ruled on the motions to remand.
“The Court is required, however, to adjudicate the jurisdictional disputes before it. While the Court previously deferred resolution of this legal question in the interest of judicial economy, avoiding duplicative litigation, and preventing inconsistent rulings, several years have elapsed without binding guidance,” Sanchez said.
“The MDL court has not yet ruled on this issue, shows no indications that it will lift the moratorium prohibiting the filing of all motions to remand, and thus, appears unlikely to address this question. In the meantime, several district courts around the country have ruled CAFA does not confer jurisdiction in cases with a singular governmental plaintiff.”
According to Sanchez, the Court lacked jurisdiction to hear this case and its removal to federal court was improper.
Sanchez granted the City’s motion and remanded the case to the Philadelphia County Court of Common Pleas for further proceedings, while dismissing the City’s motion to stay proceedings as moot.
U.S. District Court for the Eastern District of Pennsylvania case 2:21-cv-04701
Philadelphia County Court of Common Pleas case 210902183
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com