Health Law Daily Tennessee courts retain jurisdiction over opioid cases based on violations of state law
Friday, May 31, 2019

Tennessee courts retain jurisdiction over opioid cases based on violations of state law

By Rebecca Mayo, J.D.

A district court remanded a case back to state circuit court after finding that the presence of claimed violation of a federal statute does not create federal jurisdiction unless that violation is necessarily raised and substantial to the case.

A district court held that a case brought under the Tennessee Drug Dealer Liability Act (TDDLA) might raise issues relating to violations of a federal statute but will only fall under federal jurisdiction if that violation is necessarily raised and substantial to the case. The court remanded a case back to state circuit court after finding that although the claims could be proved by showing violations of the Controlled Substances Act (CSA), it could also be proven entirely on violations of state laws and regulations and therefore the federal issues were not substantial to the case (Dunaway v. Purdue Pharma L.P., May 22, 2019, Trauger, A.).

The claim. District Attorneys General (DAs) from five different judicial districts in Tennessee and Baby Doe, an infant allegedly born dependent on opioids filed a suit against a number of pharmaceutical companies, pharmacies, clinics, and individuals in county circuit court. The complaint alleged liability arising out of actions related to opioid medications, including filling of suspicious orders for opioid medications. The DAs and Baby Doe asserted liability under the TDDLA.

Jurisdiction. One of the defendants, McKesson Corporation, removed the case to federal court, claiming that the causes of action arise under federal law for jurisdictional purposes because they involve duties under the federal CSA. Purdue Pharma L.P. Then filed a notice with the Judicial Panel on Multidistrict Litigation (JPML) to have the case transferred into the multidistrict litigation (MDL) pending in the Northern District of Ohio. The DAs then filed a motion to remand the case back to circuit court, asserting that the removal to federal court was improper. Purdue and the other defendants then moved for a stay of proceedings until the JPML determined whether the case would be transferred to the MDL. The JPML then entered a conditional transfer order proposing that the case be transferred to the MDL.

Stay. A stay is usually granted to avoid a court becoming immersed in a case that will eventually leave its jurisdiction anyway. However, the court here noted that jurisdictional and procedural objections did not require the court to immerse itself in the intricacies of the case in full. Additionally, having the jurisdictional issue settled before the case is transferred could potentially save the transferee court from having to settle the issue and save it from becoming immersed in a case that does not belong in its jurisdiction in the first place. The pharmacy companies argued that denying the stay could place the case on a separate track from the other opioid-related suits already being litigated in the MDL. However, the court noted that was a risk of the remand, not the stay. A post-transfer remand would result in cases on different tracks just as much as a pre-transfer remand would, and if the case was not properly in the federal courts because of lack of jurisdiction or a defect in the removal, then the case should be on a different track. Therefore, the court would not stay the consideration of the motion.

Remand. The TDDLA expressly premises liability only on actions related to a drug the distribution of which is illegal under Tennessee law. If a plaintiff cannot show a violation of Tennessee law, federal violations would not save the case. The code does require distribution or dispensing of controlled substances to be consistent with the person’s professional or occupational licensure or registration. Construing this language to require that distributors act consistently with the CSA therefore does ultimately incorporate federal requirements.

However, the court noted that jurisdiction can only arise if that federal issue is necessarily raised and substantial. Here, the CSA violation is just one alternative way for the DAs to make their case and if they do make out a claim that amounts to a CSA violation, it may well be entirely redundant of state law violations. The "mere presence of a claimed violation of a federal statute as an element of a state cause of action does not necessarily present a federal issue that is sufficiently substantial to confer federal-question jurisdiction." Further, the case cannot be resolved solely on federal issues because absent a finding of a CSA violation, there would still be numerous other routes for prevailing under the TDDLA. Finally, while opioid abuse is an issue of national importance that is addressed by federal law, the states still have the power to craft independent responses that do not rely on federal law to impose liability. Tennessee has done so and absent a recognized basis for federal jurisdiction, the case belonged in the state’s courts.

The case is No. 2:19-cv-00038.

Attorneys: Anthony A. Orlandi (Branstetter, Stranch & Jennings, PLLC) for Bryant C. Dunaway. Hayden A. Coleman (Dechert, LLP) and James G. Thomas (Neal & Harwell, PLC) for Purdue Pharma LP, Purdue Pharma Inc. and The Purdue Frederick Company, Inc. Andrew J. O’Connor (Ropes & Gray, LLP) for Mallinckrodt LLC. Ingo W. Sprie, Jr. (Arnold & Porter Kaye Scholer, LLP) for Endo Health Solutions Inc. and Endo Pharmaceuticals Inc. Megan R. Braden (Morgan, Lewis & Bockius, LLP) for Teva Pharmaceuticals USA, Inc.

Companies: Purdue Pharma LP; Purdue Pharma Inc.; The Purdue Frederick Company, Inc.; Mallinckrodt LLC; Endo Health Solutions Inc.; Endo Pharmaceuticals Inc.; Teva Pharmaceuticals USA, Inc.

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