The Ninth Circuit recently held that multiple individual lawsuits constituted a removable “mass action” under Class Action Fairness Act (CAFA) where plaintiffs had sought to have the cases designated as “coordinated” and adjudicated by one judge under California state court procedural rules. See Corber v. Xanodyne Pharmaceuticals Inc. and Teva Pharmaceuticals USA Inc., 2014 WL 6436154 (9thCir. 2014).
The litigation stems out of the sale and distribution of prescription drugs containing propoxyphene such as Darvocet and Darvon. These drugs were sold and used roughly from 1957 to 2010 to treat moderate pain. The drugs were pulled from the market by the Federal Drug Administration in November of that year in light of studies which showed possible safety issues.
Complaints began to be filed in state and federal courts in late 2010. The federal suits were consolidated by the Multi District Litigation Panel in Kentucky but were by and large dismissed.
Plaintiffs’ lawyers then began filing additional suits on behalf of some 1500 plaintiffs in California state courts. The plaintiffs ultimately sought under California state procedure to have all these cases “coordinated” (meaning consolidated) in a single proceeding under a single judge. In doing so, plaintiffs cited the risk of inconsistent verdicts and proceeded to seek coordination “for all purposes”. Once these Petitions were filed, defendants sought removal under 28 U.S.C. Section 1332(d) of CAFA which provides federal court jurisdiction for “mass actions”. CAFA defines mass actions as civil actions involving claims of 100 or more persons that are proposed to be tried jointly on the grounds that they involve common questions.
In their motion to remand, plaintiffs argued that the words “for all purposes” did not intend or mean that the cases were to be tried jointly and that they were merely reciting the language of the controlling California Rule allowing coordination. According to plaintiffs, the “masters of their complaint” rule applied and to paraphrase Humpty Dumpty, all means just what they choose it to mean—neither more nor less. The plaintiffs cited a line of cases that held that short of an express request that cases be tried together, the mass tort jurisdictional provisions of CAFA did not apply.
The lower federal district court held that the lawsuits did not constitute a mass action under CAFA and that, accordingly, there was no federal court jurisdiction under CAFA. A Ninth Circuit panel agreed with the lower Court but the Ninth Circuit sitting en banc somewhat surprisingly reversed the Panel and remanded the case back to the lower federal Court.
In doing so, the Ninth Circuit held the plaintiffs to their words. Pointedly, the Court noted that not only were Plaintiffs masters of their complaints but they were also masters of their Petition. Plaintiffs went far beyond merely reciting the language of the Rule and repeatedly stated that one judge was necessary to adjudicate all the cases and that the liability issues together with the need to achieve consistency required coordination. Of course, to achieve these ends, noted the Ninth Circuit, one trial would almost certainly be necessary. In doing so, the Ninth Circuit joined the Seventh and Eighth Circuits in holding that a joint trial did not have to be expressly requested to create a mass action under CAFA; instead the substance and intent of the plaintiffs’ allegations need to be critically scrutinized.
From a practice standpoint, the Teva decision gives defendants the opportunity to seek federal court jurisdiction in large multi plaintiff claims based on the arguments and words used by plaintiffs. Plaintiffs have long sought to avoid federal court and the rigorous scrutiny of class action there under federal jurisprudence by filing large numbers of individual cases in state courts. Seeking to not only have their cake but to eat it too, plaintiffs’ lawyers then seek to consolidate these cases and thereby achieve the same en terrorum effect of a class action (i.e. one trial and the risk of one massive verdict in a friendly jurisdiction). The Teva ruling, particularly since it comes from the more liberal federal jurisdictions, clearly suggests that the intent of such efforts may control. Defense counsel would thus be wise to vigilantly and continuously review what plaintiffs’ counsel does and says and revisit federal jurisdiction opportunities whenever and wherever they can.