Parens Patriae Action By State Attorney General Is Not Removable Under CAFA’s Class Action Provision

A federal district court in Hawaii held that a parens patriae action brought on behalf of the State of Hawaii by its Attorney General was not removable under the Class Action Fairness Act (“CAFA”) because it was not a class action, and, even if it were, the presence of the State as a party precluded a finding that CAFA’s minimal diversity requirement had been met.  In Hawaii v. Bristol-Myers Squibb Co., Hawaii’s Attorney General claimed that pharmaceutical companies violated state consumer protection laws and were unjustly enriched and liable for punitive damages due to their allegedly false, deceptive, and unfair marketing of the prescription drug Plavix.  The State’s complaint alleged that the action was brought “solely by the State and wholly independent of any claims that individual users of Plavix may have against Defendants.”  The Defendants removed the action under CAFA’s class action provision, arguing that it was a class action brought on behalf of Hawaian consumers and that minimal diversity existed between the parties.  The State moved for remand.

The court began its analysis by noting that, in Mississippi v. AU Optronics Corp., the Supreme Court “explained that a representative action filed by the attorney general of a State as the sole named plaintiff was not the type of case Congress intended to be removable pursuant to CAFA.”  The court then ruled that the matter was not a class action because: (1) the attorney general did not rely on any rule or statutory authority similar to Rule 23; (2) while it is a similar representative action, a parens patriae suit is not a class action; and (3) the suit was not brought as a class action seeking relief on behalf of individual consumers, but instead was brought solely by the State.

Regarding the issue of minimal diversity, citing the Supreme Court’s decision in Moor v. County of Alameda, the court noted that a State that is a real party in interest is not a “citizen of a State” and cannot sue or be sued in federal court on the basis of diversity jurisdiction.  On the other hand, the court explained, if the State is merely a “nominal party[,]” then the “presence of the State on the record . . . will not defeat diversity jurisdiction.”  The court held that the State of Hawaii was the real party in interest because it “has a specific, concrete interest in protecting its citizens and economy from false, unfair and deceptive practices related to prescription drugs[,]” and some forms of the relief sought, such as civil penalties, were not available to individual consumers.  Consequently, the court held that there was no minimal diversity between the parties as required for CAFA jurisdiction and ordered remand.

Hawaii v. Bristol-Myers Squibb Co., No. 14-cv-00180 (D. Haw. July 15, 2014)

Topics:  Attorney Generals, Bristol-Myers Squibb, CAFA, Class Action, Parens Patriae, Pharmaceutical, Pharmaceutical Manufacturers

Published In: Civil Procedure Updates, Civil Remedies Updates, Communications & Media Updates, Consumer Protection Updates, Science, Computers & Technology Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Carlton Fields Jorden Burt | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »