SAN FRANCISCO (Legal Newsline) -- A federal appeals court ruled this week that a mass action filed against Teva Pharmaceuticals USA Inc. can remain in a California state court.
Teva appealed an order of the U.S. District Court for the Central District of California remanding the case to state court.
The case was one of 26 pending before the district court alleging injuries related to the ingestion of propoxyphene, an ingredient found in the Darvocet and Darvon pain medications, as well as in their generic brand counterparts.
Propoxyphene is a pain reliever that was used in the United States to treat mild to moderate pain from 1957 until November 2010, when drugs containing propoxyphene were taken off the market because of the Food and Drug Administration's safety concerns.
There are additional propoxyphene cases pending in multidistrict litigation in the Eastern District of Kentucky.
There have been more than 40 actions filed in California state courts, to date.
In the case at issue, a group of attorneys responsible for many of the propoxyphene actions filed a petition asking the California Judicial Council to establish a coordinated proceeding for all state propoxyphene actions.
After the plaintiffs' petition for coordination was filed, Teva removed the case to federal district court under the federal Class Action Fairness Act's "mass action" provision.
The federal statute, passed in 2005, gives federal courts jurisdiction to certain class actions in which the amount in controversy exceeds $5 million, and in which any of the members of a class of plaintiffs is a citizen of a state different from any defendant, unless at least two-thirds or more of the members of all proposed plaintiff classes in the aggregate and the primary defendants are citizens of the state in which the action was originally filed.
Business groups and tort reform supporters lobbied for the legislation, arguing that it was needed to prevent class-action lawsuit abuse.
In this case, the district court found that there was no federal jurisdiction under CAFA because the plaintiffs' petition for coordination did not constitute a proposal to try the cases jointly, and remanded the case back to state court.
Teva appealed.
Judge Johnnie Rawlinson authored the Ninth Circuit's majority opinion.
"Plaintiffs argue, and the district court agreed, that their analogous petition for coordination was not a proposal to try the cases jointly. We also agree," she wrote.
"California Code of Civil Procedure section 404 allows the coordination of 'all of the actions for all purposes.' However, the plaintiffs' petition for coordination stopped far short of proposing a joint trial. This fact is important because, as discussed, both the Supreme Court and our court recognize that the plaintiff is, and should be, in control of selection of the litigation forum."
When reading the plaintiffs' petition for coordination, Rawlinson said it is "quite a stretch" to discern a request for joint trial "when the clear focus of the petition is on pretrial matters."
Rawlinson also noted in the 15-page opinion that the case differs from Mississippi ex rel. v. AU Optronics, where the U.S. Court of Appeals for the Fifth Circuit concluded that federal jurisdiction existed under CAFA when Mississippi Attorney General Jim Hood brought an action under the Mississippi Consumer Protection Act and the Mississippi Antitrust Act against defendants who manufactured liquid crystal display panels.
"Unlike the AU Optronics case, the plaintiffs here have filed separate lawsuits, none of which have been initiated by the state, so the rationale articulated by the Fifth Circuit is inapposite, even were we inclined to adopt it," the judge wrote.
Judge Ronald Gould argues in his dissent that CAFA's requirements, indeed, have been met.
"We should be looking at the reality of joint trial proposal, not at how a party may characterize its own actions," he wrote.
"There is no applicable judicial precedent supporting the majority's proposition that the focus of a coordination petition mentioning pretrial matters in large part may override the reality of a plaintiff's proposal to try claims jointly when the petition seeks relief that would require joint trial."
The U.S. Chamber of Commerce was among those that filed an amicus brief in the case, arguing that the lawsuit should be moved to the federal court under CAFA.
The Chamber's Institute for Legal Reform owns Legal Newsline.
From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.