Cherokee Nation v. McKesson Corp. (In re Nat'l Prescription Opiate Litig.)

327 F.Supp.3d 1064

IN RE: NATIONAL PRESCRIPTION OPIATE LITIGATION

This Document Relates To:

Cherokee Nation

v.McKesson Corporation et al., Case No. 1:18-OP-45695

Lac Courte Oreilles Band Of Lake Superior Chippewa Indians

v.McKesson Corporation et al, Case No. 1:18-OP-45932

MDL No. 2804

Case No. 17-md-2804

United States District Court, N.D. Ohio, Eastern Division.

Signed September 4, 2018

OPINION AND ORDER

Dan Aaron Polster, United States District Judge

Before the Court are Plaintiffs' Cherokee Nation ("Cherokee") and Lac Courte Oreilles Band of Lake Superior Chippewa Indians ("Lac Courte Oreilles") (collectively "the Tribes") Motions to Remand. (1:18-OP-45695 Doc # : 12; 1:18-OP-45932 Doc # : 15) The Court has reviewed the Motions, the Opposition Briefs, and the Reply Briefs of both cases and for the reasons to follow, DENIES both the Cherokee and the Lac Courte Oreilles Motions to Remand.

Additionally, for the reasons set forth below, Defendant McKesson Corporation's ("McKesson") Motion to Stay Execution of Any Remand Order pending in Case no. 1:18-OP-45695 (Doc # : 72) and Cherokee's Motion for Oral Argument pending in the same case (1:18-OP-45695 Doc # : 73) are also DENIED .

I. Introduction

In this Multidistrict Litigation ("MDL"), Plaintiffs are government entities, Indian tribes, hospitals, third-party payors and individuals from across the nation that have sued the manufacturers, distributors and retailers of prescription opiate drugs, alleging they are liable for the costs Plaintiffs have incurred, and will continue to incur, in addressing the opioid public health crisis. There are now over 1150 cases in the MDL—53 of which were filed by Indian tribes.

A. Procedural History re: Cherokee Nation v. McKesson Corporation et al. , Case No. 1:18-OP-45695

On April 20, 2017, Cherokee filed a petition in the District Court of the Cherokee Nation against defendant opioid distributors and pharmacies. (See 1:18-OP-45695 Doc # : 12 at 3) The defendants, in turn, filed a declaratory judgment action in the District Court for the Northern District of Oklahoma on June 8, 2017 seeking to enjoin the tribal lawsuit. (See Id. ) The Federal District Court granted defendants' motion for preliminary injunction on January 9, 2018. (See Id. )

Ten days later, on January 19, 2018, Cherokee filed this action in the District Court of Sequoyah County, Oklahoma. (1:18-OP-45695 Doc # : 2-1) Cherokee asserted solely state common law claims related to alleged actions and omissions of McKesson Corporation et al. that allowed opioid diversion to occur in the counties of Cherokee Nation in northeastern Oklahoma. On February 26, 2018 Defendant McKesson removed the case to the United States District Court for the Eastern District of Oklahoma alleging as its grounds for removal the Federal Officer Removal Statute, 28 U.S.C. § 1442. (1:18-OP-45695 Doc # : 2 at 2) McKesson subsequently filed a Notice of Potential Tag-Along Action relating to the present National Prescription Opiate MDL whereon the case was transferred to the Northern District of Ohio. (See 1:18-OP-45695 Doc # : 12 at 4; see also Doc # : 69)

B. Procedural History re: Lac Courte Oreilles Band Of Lake Superior Chippewa Indians v. McKesson Corporation et al , Case No. 1:18-OP-45932

Similarly, on March 16, 2018, Lac Courte Oreilles filed a Complaint in the Circuit Court of Sawyer County, Wisconsin against defendant opioid manufacturers, distributors, and pharmacies. (1:18-OP-45932 Doc # : 1-1 at 26-95) Lac Courte Oreilles similarly asserted only state law claims. On April 19, 2018 McKesson removed the case to the United States District Court for the Western District of Wisconsin—again alleging as its grounds for removal the Federal Officer Removal Statute. (1:18-OP-45932 Doc # : 1 at 3) Here, Defendant Cardinal Health, Inc. filed a Notice of Potential Tag-Along Action relating to the present National Prescription Opiate MDL whereon the case was transferred to the Northern District of Ohio. (See 1:18-OP-45932 Doc # : 15 at 4; see also Doc # : 27)

II. Standard of Review

When a case is removed under the Federal Officer Removal Statute, the Court is free to use its own circuit's interpretation of the federal law to form its opinion. See In re Korean Air Lines Disaster of September 1, 1983 , 829 F.2d 1171, 1186 (D.C. Cir. 1987) ("Nothing in the Supreme Court's opinion in Van Dusennor in the language of section 1407(a) requires a federal court to engage in the unprecedented practice of interpreting federal law through the analytical prism of another circuit's case law.").Therefore, in deciding the present motions, the Court will apply Sixth Circuit case law to its analysis of the Federal Officer Removal Statute.

Title 28, Section 1442 of the U.S. Code permits the removal of a "civil action or criminal prosecution that is commenced in a State court and that is against or directed to ... any officer (or any person acting under that officer) of the United States ... in an official or individual capacity, for or relating to any act under color of such office." 28 U.S.C. § 1442.¹ The Supreme Court has "made clear that the [Federal Officer Removal] Statute must be ‘liberally construed.’ Watson v. Philip Morris Companies, Inc. , 551 U.S. 142, 147, 127 S.Ct. 2301, 168 L.Ed.2d 42 (2007) (quoting Colorado v. Symes , 286 U.S. 510, 517, 52 S.Ct. 635, 76 L.Ed. 1253 (1932) ; also citing Arizona v. Manypenny , 451 U.S. 232, 242, 101 S.Ct. 1657, 68 L.Ed.2d 58 (1981) and Willingham v. Morgan , 395 U.S. 402, 406–407, 89 S.Ct. 1813, 23 L.Ed.2d 396 (1969) ). The Federal Officer Removal Statute is unique in that it provides a right to appeal where a case removed under 28 U.S.C. § 1442 is subsequently remanded. See 28 U.S.C. § 1447(d). Although a liberal construction has limits, see Watson , 551 U.S. at 147, 127 S.Ct. 2301, the Supreme Court's "policy favoring removal ‘should not be frustrated by a narrow, grudging interpretation of 28 U.S.C. § 1442(a)(1).’ " Manypenny , 451 U.S. at 242, 101 S.Ct. 1657 (internal citation omitted). While some circuits have taken a more narrow view of removal under the Federal Officer Removal Statute, the Sixth Circuit has endorsed "the broad scope of the federal officer removal statute," and thus this Court interprets the statute broadly in favor of removal in this instance.^{2 ,3} Bennett v. MIS Corp. , 607 F.3d 1076, 1084 (6th Cir. 2010).

The purpose of federal officer removal jurisdiction is to ensure that federal officers can raise colorable federal defenses arising out of their duty to enforce federal law and are given the impartiality of a federal forum. See Bennett , 607 F.3d at 1085 (citing Willingham , 395 U.S. at 406-07, 89 S.Ct. 1813 ). Federal officer removal requires a private corporate defendant to show that (1) it is a person who acted under the direction of a federal officer; (2) the actions for which it is being sued were performed under the color of federal office, and (3) there is a colorable federal defense to the plaintiff's claims. See Id.

III. Analysis

A. Acting Under

A private corporate defendant can show that it acted under the direction of a federal officer in situations where "the relationship between the contractor and the Government is an unusually close one involving detailed regulation, monitoring, or supervision." Watson , 551 U.S. at 153, 127 S.Ct. 2301. For example, private contractors have been found to be acting under the direction of a federal officer when the contractor "is helping the Government to produce an item that it needs, [and] in the absence of a contract with a private firm, the Government itself would have had to perform [the contracted job]." Id. at 154, 127 S.Ct. 2301 (citing as an example Winters v. Diamond Shamrock Chemical Co. , 149 F.3d 387 (5th Cir. 1998) (authorizing removal of a tort suit against private defense contractors that manufactured Agent Orange) ). Therefore, while mere compliance with a government regulation, even a strict one, is insufficient to find that a private company was acting under the direction of a federal officer, delegation of specific government tasks meets the "acting under" prong. See generally id.

The Sixth Circuit examined the "acting under" prong in its opinion in Bennett v. MIS Corp. In Bennett , the FAA discovered mold, including toxic mold, in one of its control towers and contracted with MIS, a private corporation, to treat and remove the mold. See Bennett, 607 F.3d at 1082-83. After completion of the mold removal project, Bennett filed suit against MIS in state court for negligent execution of its mold remediation contract. MIS removed the case to the Eastern District of Michigan under the Federal Officer Removal Statute. See. id. at 1083-84.

In its removal motion, MIS alleged that it was acting under the direction of a federal officer because " ‘its work was performed at the direction of, and in accordance with, [ ] detailed mold abatement specifications established by the FAA’ and that ‘[t]he FAA provided detailed [instructions]... pertaining to the materials that MIS was required to use and the manner in which MIS was to perform the [mold] remedial activities.’ " Id. at 1087. MIS attached the contract to its removal motion. The Sixth Circuit, in its review of the contract,⁴ found that the FAA contractually required MIS to "follow explicit parameters for site containment and waste disposal," id. , and that the FAA closely monitored MIS's work. The Court determined that the contract required an "FAA contracting officer" to be on-site and that the officer: (1) could not modify contract procedures without approval, (2) could dismiss incompetent MIS employees, (3) could control MIS employee working hours, (4) must escort MIS employees at all times, and (5) could prohibit entry into the site. See id. at 1087-88. This, the Sixth Circuit determined, "went beyond simple compliance with the law," and therefore was "a job that, in the absence of a contract with [MIS] [or another private mold remediation firm] t...