The Second Circuit Court of Appeals ruled in Purdue Pharma L.P. v. Commonwealth of Kentucky, 2013 WL 85918, No. 11-4087—mv (2nd Cir. Jan. 9, 2013), that the Kentucky Attorney General’s parens patriae claim against Purdue Pharma L.P. concerning the prescription drug OxyContin was not removable as a “class action” under the Class Action Fairness Act of 2005.
The suit alleged that the defendant misled health care providers, consumers and government officials regarding the risks of addiction associated with the use of OxyContin, causing physicians to overprescribe OxyContin, and leading to widespread addiction among residents, the expenditure of significant Kentucky Medicaid healthcare costs, and the commission of criminal acts in Kentucky to obtain OxyContin. The claim was predicated on three Kentucky statutes and various common law theories, including strict liability, and sought civil penalties, restitution of public funds, punitive damages and injunctive relief.
The Attorney General brought the case in both its proprietary capacity, for alleged damage suffered directly by the commonwealth, and also in its parens patriae capacity, to protect the health and safety of its citizens. A state may file a suit in its parens patriae (“parent of the country”) status to litigate quasi-sovereign interests that are distinct from the interests of private parties. The state must establish an injury to a sufficiently substantial segment of its population in order to proceed, but will not have parens patriae standing if it is only a nominal party without a real interest of its own.
The Class Action Fairness Act of 2005 expands federal jurisdiction to cover any civil action filed under Federal Rule of Civil Procedure 23 or “similar State statute or rule of judicial procedure authorizing an action to be brought by 1 or more representative persons as a class action.” The Second Circuit found that that none of the Kentucky statutes authorized a suit to proceed “as a class action,” and provided few, if any, class-like procedures, such as allowing a class member whose claim is typical of all members of the class to bring an action on his or her own behalf and also for all others in the class. A parens patriae plaintiff, by definition, need not demonstrate standing through a representative injury in order to recover. The court concluded that “(i)n form as well as function, parens patriae suits lack the equivalency to Rule 23 that CAFA demands,” and thus could not qualify for removal as class actions under CAFA.