Wednesday, February 13, 2008

No second bite at federal apple for GlaxoSmithKline

Blue Cross Blue Shield v. GlaxoSmithKline, PLC, 2008 WL 304888 (D. Minn.)

Plaintiffs originally sued in federal district court, asserting state and federal antitrust claims as well as state-law deceptive trade practices and similar fraud claims. The basic allegation is that defendant GSK illegally obtained a monopoly on Paxil and charged supracompetitive prices for it, fraudulently interfering with the entry of generics into the market. The federal complaint was dismissed because plaintiffs, third-party payors, didn’t suffer a direct injury as required by federal antitrust law, and the court declined to exercise supplemental jurisdiction over the remaining claims.

Plaintiffs refiled in state court. GSK moved to dismiss, arguing that the state law claims were preempted by federal patent law, because their alleged basis involved patent misconduct. The state court rejected that argument, and found that plaintiffs’ false advertising and deceptive marketing allegations survived a motion to dismiss, rejecting GSK’s argument that the “learned intermediary” doctrine precluded them.

GSK removed the case and plaintiffs moved to remand. GSK argued that plaintiffs’ based on alleged false marketing and advertising of prescription drugs were preempted by federal law. Defenses like preemption don’t create federal question jurisdiction unless there’s complete preemption. But GSK didn’t argue complete preemption of false marketing claims. Instead, GSK argued that plaintiffs’ false advertising claims must necessarily fail on a variety of grounds. But (in the absence of complete preemption) federal jurisdiction must appear on the face of a well-pleaded complaint, so that argument is not properly addressed to the federal district court, and the motion to remand was granted.

Given the unique procedural history of the case, GSK had no objectively reasonable basis for removal, and plaintiffs were awarded fees and costs.

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