Litigation over federal jurisdiction in mass actions under the Class Action Fairness Act (CAFA) continues to clog up courts’ dockets, and the Ninth Circuit recently weighed in. In a case of first impression for the circuit, the court held that a coordinated mass tort action against Teva Pharmaceuticals can remain in California state court because the plaintiffs sought to join the cases together for discovery and pretrial purposes—which fall outside CAFA’s jurisdiction—rather than for trial. Plaintiff attorneys say the decision gives new life to mass tort actions in California. The case was remanded, and the defendants have requested en banc review. (Romo v. Teva Pharms. USA, Inc., 2013 WL 5314334 (9th Cir. Sept. 24, 2013).)
CAFA mandates that mass actions—lawsuits in which at least 100 individuals seek monetary damages and propose joint trial on the basis that the plaintiffs’ claims involve common questions of law and fact—belong in federal court. Judge Johnnie Rawlinson wrote for the 2-1 majority that the plaintiffs’ petition for a joint proceeding did not request a joint trial, only coordinated discovery and pretrial matters, and it did not warrant removal to federal court.
Judith Romo and 1,500 other plaintiffs have filed more than 40 lawsuits in California state court against Teva, McKesson Corp., and other drugmakers over the pain medication propoxyphene, an ingredient found in Darvon, Darvocet, and related generics. The plaintiffs alleged that the drug caused various heart problems and other serious ailments. Propoxyphene was taken off the market in 2010 after the FDA recommended removal following receipt of clinical data that the drug puts patients at risk of potentially fatal heart rhythm abnormalities. Additional cases are pending in an MDL in the Eastern District of Kentucky. (In re Darvocet, Darvon, & Propoxyphene Prods. Liab. Litig., 780 F. Supp. 2d 1379 (E.D. Ky. 2011).)
In October 2012, the plaintiffs petitioned the California Judicial Council to join the lawsuits into a single proceeding for discovery and pretrial purposes. Under CAFA, Teva removed the case to the Central District of California.
The defendants argued that the cases should remain in federal court and cited the Seventh Circuit’s decision in In re Abbott Laboratories, Inc., in support. In Abbott, the plaintiffs proposed consolidating a mass action involving the drug Depakote, and the Seventh Circuit held that CAFA jurisdiction applied because the plaintiffs’ petition expressly requested consolidation through trial and “not solely for pretrial proceedings.” But the district court distinguished Abbott from Romo and ruled that the petition was not a proposal for joint trial. The defendants appealed.
In concluding that CAFA jurisdiction was not met, the Ninth Circuit focused on its previous decision in Tanoh v. Dow Chemical Corp., which held that CAFA excludes “any civil action in which . . . the claims have been consolidated or coordinated solely for pretrial purposes.” The court added that the plaintiffs are the “masters of their complaint,” and the Supreme Court and the Ninth Circuit have recognized that plaintiffs should be in control of selecting the litigation forum.
The U.S. Chamber of Commerce filed an amicus brief in support of the defendants, arguing that the Ninth Circuit should revisit Tanoh because it lost its precedential value. But such an action would put the court at odds with the Seventh and Eleventh Circuits, Rawlinson wrote, and three other California federal courts have issued similar rulings.
Judge Ronald Gould dissented, arguing that the defendants satisfied removal under CAFA and that the majority created a circuit split “for practical purposes” with the Seventh Circuit in Abbott.
Oakland, Calif., lawyer Elise Sanguinetti, who represents the plaintiffs, said the decision does not create a circuit split. “The Ninth Circuit did a really good job discussing how our cases were different than the one in the Seventh Circuit and that it was not the same issue,” she said. “That was part of the defendants’ motivation to rely on Abbott—to try to create a circuit split. This is going to take the wind out of their [the defendants’] sails. It shows that at least in California, you can have coordinated mass tort actions.”
Sanguinetti said this is a good lesson for plaintiff attorneys.
“What this shows is that unless you ask for consolidation for trial purposes, CAFA does not apply, and that is really important because the plaintiffs are in control of what they put in the coordinated petition,” she said. “Plaintiff attorneys need to be aware when they are drafting these petitions that they need to clarify that they are asking for coordination for discovery [and pretrial] purposes and make it clear they are not asking for coordination for trial purposes.”