Preview
FILED: WESTCHESTER COUNTY CLERK 01/26/2024 05:01 PM INDEX NO. 75000/2022
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RECEIVED
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
WESTCHESTER COUNTY, Y,
No.: 7:23-cv-6096-CS (Lead Case)
Plaintiff,
- against –
MYLAN PHARMACEUTICALS, INC.,
ET AL.,
Defendants.
This Document Relates to All Actions
------------------------------------------------------------------------------------------
PLAINTIFFS’ MEMORANDUM OF LAW
IN SUPPORT OF OMNIBUS MOTION TO DECLINE TO EXERCISE
SUPPLEMENTAL JURISDICTION AND REMAND TO STATE COURT
------------------------------------------------------------------------------------------
HUNTER SHKOLNIK
PAUL J. NAPOLI
Napoli Shkolnik
NS PR Law Services, LLC
1302 Avenida Ponce de León
Santurce, Puerto Rico 00907
Tele: (833) 271-4502
Hunter@NSPRLaw.com
PNapoli@NSPRLaw.com
and
SALVATORE C. BADALA (SB1587)
SHAYNA E. SACKS (SS7135)
Napoli Shkolnik PLLC
400 Broadhollow Rd, Suite 305
Melville, NY 11747
Tele: (212) 397-1000
Fax: (646) 843-7603
SBadala@NapoliLaw.com
SSacks@NapoliLaw.com
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TABLE OF CONTENTS
INTRODUCTION......................................................................................................................... 1
BACKGROUND ........................................................................................................................... 3
LEGAL STANDARD ................................................................................................................... 4
ARGUMENT ................................................................................................................................. 6
I. Removing Defendants Cannot Establish the Required Criteria for Federal Officer
Jurisdiction……………………………………………………………………………….6
A. Plaintiffs Expressly Disclaimed Any Claims Arising from Conduct Regarding
Federal Health Benefits Programs and Plans, Federal Contracts, Employees
and Beneficiaries…………………………………………………………………6
1. New York Plaintiffs May Disclaim Federal Jurisdiction…………………7
2. Plaintiffs Proffered Effective, Non-Circular and Comprehensive Federal
Claims Disclaimers in this Consolidated Action………………………….8
B. The Requirements of the Federal Officer Removal Statute Are Not Met
Here……………………………………………………………………………...10
1. “Acting Under” –Removing Defendants were not “acting under” a federal
officer…………………………………………………………………….10
2. “Acting Under” –Removing Defendant ESI was not “acting under” a
federal officer by administering FEHB-related services………………….12
3. “Causal Nexus” – There is no causal nexus between Removing
Defendants’ actions related to Federal Contracts, Benefits Programs, Plans
or Beneficiaries and Plaintiffs’ Claims under New York Law. …………..14
a. OptumRx’s VHA Contract Does Not Dictate Actions Causally
Connected to Plaintiffs’ Claims………………………………….…...15
b. ESI’s DoD TRICARE Contract Does Not Dictate Actions Causally
Connected to Plaintiffs’ Claims……………………………………....16
c. ESI has not met its burden to show that services to FEHB Carriers are
causally connected to Plaintiffs’ claims……………………………...16
d. Removing Defendants Failed to Demonstrate a Substantial Causal
Nexus……………………………………………………………… 17
ii
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4. “Colorable Federal Defense” –Removing Defendants have Not Met their
Burden to Establish a Colorable Federal Defense……………………….18
a. Neither Removing Defendant Can Plausibly Demonstrate that it Can
Avail itself of the Federal Contractor Defense………………………..18
b. ESI Cannot Plausibly Demonstrate that it Can Avail itself of the
Preemption Defense…………………………………………………..20
II. The Court Should Decline to Exercise Supplemental Jurisdiction in this Case……22
CONCLUSION ........................................................................................................................... 25
iii
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TABLE OF AUTHORITIES
Page(s)
Cases
1:17-MD-2804,
2023 WL 166006 (N.D. Ohio Jan. 12, 2023) ............................................................................ 17
3:21-CV-00961,
2022 WL 3643963 (N.D.N.Y. Aug. 24, 2022) .......................................................................... 25
489 U.S. 121, 109 S. Ct. 959, 103 L. Ed. 2d 99 (1989) .................................................................. 4
0838 RSM,
2009 WL 2959877 (W.D. Wash. Sept. 9, 2009) ....................................................................... 19
Albrecht v. A.O. Smith Water Prod.,
2011 WL 6778471 (S.D.N.Y. Dec. 16, 2011) ............................................................................. 7
Aldorasi v. Crossroads Hosp. & Mgmt. Co., LLC,
344 F. Supp. 3d 814 (E.D. Pa. 2018) ......................................................................................... 25
Amador v. City of New York,
2021 WL 2809541 (S.D.N.Y. July 6, 2021) ................................................................................ 7
Amancio v. DePerry,
2023 WL 549092 (D. Conn. Jan. 27, 2023) .............................................................................. 18
Arthur Glick Truck Sales, Inc. v. H.O. Penn Mach. Co.,
332 F. Supp. 2d 584 (S.D.N.Y. 2004) ......................................................................................... 7
Badgerow v. Walters,
596 U.S. 1, 142 S. Ct. 1310, 212 L. Ed. 2d 355 (2022) .............................................................. 4
Badilla v. Midwest Air Traffic Control Serv., Inc.,
8 F.4th 105 (2d Cir. 2021) ......................................................................................................... 11
Batchelor v. Am. Optical Corp.,
185 F. Supp. 3d 1358 (S.D. Fla. 2016) ................................................................................ 11, 23
Berger v. New York Univ.,
2019 WL 3526533 (S.D.N.Y. Aug. 2, 2019)............................................................................. 21
Boyle v. United Techs. Corp.,
487 U.S. 500, 108 S. Ct. 2510, 101 L. Ed. 2d 442 (1988)............................................... 9, 19, 20
California v. WorldCom, Inc.,
368 F.3d 86 (2d Cir. 2004) .................................................................................................... 4, 18
Carnegie-Mellon Univ. v. Cohill,
484 U.S. 343, 108 S. Ct. 614, 98 L. Ed. 2d 720 (1988) .............................................................. 7
Caterpillar Inc. v. Williams,
482 U.S. 386, 107 S. Ct. 2425, 96 L. Ed. 2d 318 (1987) .................................................... 20, 21
Certilman v. Becker,
807 F. Supp. 307 (S.D.N.Y. 1992) ............................................................................................ 22
Cnty. Bd. of Arlington Cnty., Virginia v. Express Scripts Pharmacy, Inc.,
996 F.3d 243 (4th Cir. 2021) ..................................................................................................... 19
Cuomo v. Crane Co.,
771 F.3d 113 (2d Cir. 2014) ...................................................................................................... 18
Depascale v. Sylvania Elec. Prod., Inc.,
584 F. Supp. 2d 522 (E.D.N.Y. 2008) ......................................................................................... 5
iv
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Dupervil v. All. Health Operations, LCC,
516 F. Supp. 3d 238 (E.D.N.Y. 2021) ......................................................................................... 5
Frawley v. Gen. Elec. Co.,
2007 WL 656857 (S.D.N.Y. Mar. 1, 2007) ................................................................................. 7
Gerosa v. Savasta & Co.,
329 F.3d 317 (2d Cir. 2003) ...................................................................................................... 21
Gordon v. Air & Liquid Sys. Corp.,
990 F. Supp. 2d 311 (E.D.N.Y. 2014) ......................................................................................... 4
Hamilton v. Aetna Life & Cas. Co.,
5 F.3d 642 (2d Cir. 1993) ............................................................................................................ 8
Hernandez v. Conriv Realty Assocs.,
116 F.3d 35 (2d Cir. 1997) ........................................................................................................ 21
Holliday v. Crane Co.,
2013 U.S. Dist. LEXIS 177171 (S.D.N.Y. Aug. 9, 2013) ......................................................... 18
Hosein v. CDL W. 45th St., LLC,
2013 WL 4780051 (S.D.N.Y. June 12, 2013) ............................................................................. 8
In re Agent Orange Prod. Liab. Litig.,
517 F.3d 76 (2d Cir. 2008) .................................................................................................... 5, 19
In re Atlas Van Lines, Inc.,
209 F.3d 1064 (8th Cir. 2000) ................................................................................................... 25
In re Methyl Tertiary Butyl Ether (''MTBE'') Prod. Liab. Litig.,
488 F.3d 112 (2d Cir. 2007) ...................................................................................................... 12
Isaacson v. Dow Chem. Co.,
517 F.3d 129 (2d Cir. 2008) ...................................................................................... 5, 10, 12, 18
Jefferson Cnty., Ala. v. Acker,
527 U.S. 423, 119 S. Ct. 2069, 144 L. Ed. 2d 408 (1999)..................................................... 5, 10
Jurist v. Long Island Power Auth.,
2020 WL 1149750 (E.D.N.Y. Mar. 10, 2020)....................................................................... 5, 10
Leroy v. Hume,
554 F. Supp. 3d 470 (E.D.N.Y. 2021) ......................................................................................... 5
Maguire v. A.C. & S., Inc.,
73 F. Supp. 3d 323 (S.D.N.Y. 2014) ......................................................................................... 24
Maguire v. A.C. & S., Inc.,
2015 WL 4934445 (S.D.N.Y. Aug. 18, 2015)................................................................. 7, 22, 23
Martin v. Franklin Cap. Corp.,
546 U.S. 132, 126 S. Ct. 704, 163 L. Ed. 2d 547 (2005) ............................................................ 9
McGillick v. World Trade Ctr. Properties, LLC,
2004 WL 2049260 (S.D.N.Y. Sept. 13, 2004) ............................................................................ 5
Meer Enterprises, LLC v. Kocak,
2018 WL 1901478 (S.D.N.Y. Apr. 20, 2018) ....................................................................... 7, 24
Nanavati v. New Sch. for Soc. Rsch.,
2020 WL 1876359 (S.D.N.Y. Apr. 15, 2020) ....................................................................... 7, 24
New Hampshire v. 3M Co.,
2023 WL 2691376 (D.N.H. Mar. 29, 2023) .............................................................................. 11
Nix v. Off. of Comm'r of Baseball,
2017 WL 2889503 (S.D.N.Y. July 6, 2017) ................................................................................ 7
v
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Nuzzo v. Verizon New York, Inc.,
2004 WL 1872708 (S.D.N.Y. Aug. 19, 2004)........................................................................... 21
Oklahoma ex rel. Hunter v. McKesson Corp.,
2020 WL 5814161 (E.D. Okla. Sept. 14, 2020) .................................................................... 9, 22
Oneida Indian Nation of New York v. Madison Cnty.,
665 F.3d 408 (2d Cir. 2011) ........................................................................................................ 7
Osterhout v. Crane Co.,
2016 WL 10950439 (N.D.N.Y. Mar. 21, 2016) ........................................................................ 20
Paparella v. Liddle & Robinson, L.L.P.,
2023 WL 2344725 (S.D.N.Y. Mar. 3, 2023) ....................................................................... 21, 25
Pollux Holding Ltd. v. Chase Manhattan Bank,
329 F.3d 64 (2d Cir. 2003) ........................................................................................................ 24
Powers v. Southland Corp.,
4 F.3d 223 (3d Cir. 1993) .......................................................................................................... 25
Quire v. City of New York,
2021 WL 293819 (S.D.N.Y. Jan. 28, 2021) ................................................................................ 7
Sadallah v. City of Utica,
383 F.3d 34 (2d Cir. 2004) .................................................................................................... 7, 24
Shargian v. Shargian,
591 F. Supp. 3d 100 (E.D. La. 2022)......................................................................................... 25
Singh v. Prudential Ins. Co. of Am.,
200 F. Supp. 2d 193 (E.D.N.Y. 2002) ....................................................................................... 25
Solomon v. St. Joseph Hosp.,
62 F.4th 54 (2d Cir. 2023) ........................................................................................................... 5
Spehar v. Fuchs, No. 02-CIV.,
2003 WL 23353308 (S.D.N.Y. June 18, 2003) ......................................................................... 25
Spielman v. Merrill Lynch, Pierce, Fenner & Smith, Inc.,
332 F.3d 116 .............................................................................................................................. 21
State of California v. Eli Lilly & Co., No. 2:23-CV-01929-SPG-SK,
2023 WL 4269750 (C.D. Cal. June 28, 2023) ................................................................. 9, 11, 23
State of Maryland v. Soper,
270 U.S. 9, 46 S. Ct. 185, 70 L. Ed. 449 (1926)........................................................................ 10
Stevenson v. Bank of New York Co.,
609 F.3d 56 (2d Cir. 2010) ........................................................................................................ 21
Valencia ex rel. Franco v. Lee,
316 F.3d 299 (2d Cir. 2003) ............................................................................................ 7, 24, 25
Watson v. Philip Morris Companies, Inc.,
551 U.S. 142, 127 S. Ct. 2301, 168 L. Ed. 2d 42 (2007) ................................................... Passim
Weaver v. Metro. Life Ins. Co.,
939 F.3d 618 (5th Cir. 2019) ..................................................................................................... 25
Williams v. Brantley,
492 F. Supp. 925 (W.D.N.Y. 1980) ........................................................................................... 19
Wilson v. Republic Iron & Steel Co.,
257 U.S. 92, 42 S. Ct. 35, 66 L. Ed. 144 (1921).......................................................................... 4
Statutes
vi
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5 U.S.C. § 8902(m)(1) .................................................................................................................. 22
28 U.S.C. §§ 1441-1444, 1447 ....................................................................................................... 4
28 U.S.C.A. § 1367 ....................................................................................................................... 24
28 U.S.C.A. § 1367(a) .................................................................................................................. 22
28 U.S.C.A. § 1442 ....................................................................................................................... 10
28 U.S.C.A. § 1442(a) ............................................................................................................ 1, 2, 4
28 U.S.C.A. § 1442, subdivision (a)(1) ........................................................................................ 23
28 U.S.C.A. § 1447 (c), (e) ............................................................................................................. 8
28 U.S.C.A. §§ 1367 (c) and 1447 (c) ............................................................................................ 1
N.Y. Gen. Bus. Law § 349 ........................................................................................................ 2, 22
N.Y. Gen. Bus. Law § 350 ........................................................................................................ 2, 22
N.Y. Soc. Serv. Law § 145-b .................................................................................................... 2, 22
§1447 (c) ................................................................................................................................... 8, 24
§ 1442(a)(1) .............................................................................................................................. 4, 25
Regulations
48 C.F.R. § 1602.170-16(a) .......................................................................................................... 13
48 C.F.R. § 1604.7201(a).............................................................................................................. 13
48 C.F.R. § 1604.7201(a)(6) ......................................................................................................... 13
48 C.F.R. § 1652.204-70............................................................................................................... 13
48 C.F.R. § 1652.204-74(a) .......................................................................................................... 13
48 C.F.R. § 1652.246-70............................................................................................................... 13
Other Authorities
SB1587 ...................................................................................................................................... 1, 26
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INTRODUCTION
Pursuant to 28 U.S.C.A. §§ 1367 (c) and 1447 (c), the 34 Plaintiffs in the above-captioned
lead and member cases respectfully move this Court for an order declining to exercise jurisdiction
and remanding each of the 34 cases to the Supreme Court of the State of New York, County of
Westchester.1 Defendants OptumRx, Inc. (“OptumRx”) and Express Scripts Inc.’s (“ESI”)
(together, the “Removing Defendants) removed these cases to this Court pursuant to the federal
officer removal statute, 28 U.S.C.A. § 1442(a). The Removing Defendants – private parties, not
federal officers -- rely on their involvement with certain federal government customers, federal
health benefits programs and plans administered by certain federal agencies, but Plaintiffs’
allegations were never intended to implicate these federal customers, programs, or agencies and
Plaintiffs have now specifically disclaimed any such claim.2 There is simply no nexus whatsoever
between the work the Removing Defendants may do for the federal government and the claims
asserted by Plaintiffs in these cases, which arise from the conduct of the Removing Defendants
outside the context of their federal contracts. For this reason, this Court lacks subject-matter
jurisdiction over these cases, which belong in New York state court where they were commenced
over five years ago as part of the coordinated In re Opioid Litigation. The cases should be
remanded.
These actions were commenced from September of 2017 to August of 2018 and
coordinated with other similar actions by the New York Litigation Coordinating Panel (“LCP”).
1
This motion is filed solely in the lead case and relates to all member cases, pursuant to this
Court’s Orders dated July 20, 2023 (ECF. No. 15) and August 30, 2023.
2
See Exhibit 1 (September 2023 Amended Complaint in Westchester County Action), Exhibit 2
(Table of Individual Actions) and Exhibit 3 (State Court Pleadings). The Removing Defendants
do not contend, nor could they, that these cases were removed on the basis of either diversity or
federal question jurisdiction; they rely solely on the federal officer removal statute.
1
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Although the entire coordination was originally assigned to Justice Jerry Garguilo in Suffolk
County, New York, most of the cases, including the 34 at issue here, were later transferred by the
LCP to Westchester County Supreme Court and assigned to Justice Nancy Quinn Koba. In April
of 2023, Plaintiffs filed amended complaints3 adding new defendants, including the Removing
Defendants. The Removing Defendants then removed the cases, invoking 28 U.S.C.A. § 1442(a).
The Removing Defendants cannot demonstrate that removal is proper under §1442(a).
Plaintiffs’ allegations concern conduct that created, perpetuated, contributed to and maintained a
public nuisance – the opioid crisis -- in their counties in New York. OptumRx and ESI are
pharmacy benefit managers that controlled the flow of opioids in New York, ensured that they
were regularly prescribed and flooded the market, negotiated with opioid manufacturers to give
opioids favorable placement on formularies in exchange for rebates and fees, and dispensed
opioids through mail order pharmacies, among other conduct. Plaintiffs allege that this conduct
contributed to the public nuisance of the opioid crisis. Plaintiffs do not challenge any conduct
relating to federal healthcare operations such as the Veterans Health Administration (“VHA”),
Department of Defense’s (“DoD”) TRICARE operations or the Office of Personnel Management’s
(“OPM”) Federal Employee Health Benefits (“FEHB”) program, nor do they challenge the
administration of any such programs by a third party.
Remand is appropriate because OptumRx and ESI have not satisfied any of the prongs of
the federal officer removal test. Indeed, as discussed below, any allegations that could be construed
to involve conduct under the direction of a federal government customer or officer (“acting under”)
3
The complaints asserted claims based exclusively on New York statutory and common law:
deceptive acts and practices under N.Y. Gen. Bus. Law § 349, false advertising under N.Y. Gen.
Bus. Law § 350, public nuisance, violation of N.Y. Soc. Serv. Law § 145-b, fraud, unjust
enrichment and negligence. See April 2023 Short-Form Complaint, Exhibit 4.
2
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have been abandoned and carved out through amendments and the inclusion of a comprehensive
federal claims disclaimer based, in part, on a prior stipulation by the same Removing Defendants
and plaintiff Jefferson County in another opioid case, No. 20JE-CC00029. Moreover, the
Removing Defendants do not maintain any colorable federal defenses and, even if they did, in the
absence of federal officer involvement, the Removing Defendants cannot keep these cases in
federal court solely based on any purported federal defenses.
For the reasons set forth below, this Court lacks subject matter jurisdiction over this action.
Plaintiffs respectfully ask this Court to remand this matter back to Plaintiffs’ originally chosen
forum, the Supreme Court of New York, County of Westchester.
BACKGROUND
Plaintiffs’ individual actions were filed against multiple defendants and later coordinated
into the In re Opioid Litigation by New York’s LCP. Throughout the litigation, defendants were
added, including Purdue, the Sackler family, manufacturers, distributors, retail chain pharmacies
– and, recently, certain pharmacy benefit managers (“PBMs”) based on information obtained
during the litigation.
As described in Exhibit 2, the individual cases were removed to this Court in July of 2023.
Following this Court’s Order, Plaintiffs amended their complaints, disclaiming federal claims and
proffering additional factual allegations against the PBMs. The allegations against the PBMs
involve their role in causing the opioid crisis; their failures as gatekeepers to the opioid prescription
drug market; their influence in the parameters of the amounts and types of drugs that are available
to patients, co-pays and authorizations their central role in facilitating dispensing of opioids; their
confidential agreements with Opioid Manufacturers as to UM measures; knowledge gained
through their clients, manufacturers, and other entities in the health care arena; among other
3
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allegations, including the illicit conduct the reaped profits and substantial revenue in Plaintiffs’
geographic areas, all in violation of New York state law and common law. Plaintiffs’ allegations
did not and do not include claims for recovery related to opioids distributed to military personnel,
veterans, federal customers or health plan beneficiaries under the authority of a federal officer.
LEGAL STANDARD
Federal district courts are courts of limited jurisdiction. See Badgerow v. Walters, 596 U.S.
1, 142 S. Ct. 1310, 1315, 212 L. Ed. 2d 355 (2022). Congress has provided for removal of cases
commenced in state court under a variety of specific circumstances, at least one of which must be
satisfied in order for the removed action to remain in federal court. See 28 U.S.C. §§ 1441-1444,
1447. Here, Defendants removed solely under §1442(a), which provides for removal of actions
“against or directed to” federal officers or agencies .4 Defendants removing under that provision
bear the burden of establishing jurisdiction. See Wilson v. Republic Iron & Steel Co., 257 U.S. 92,
97, 42 S. Ct. 35, 66 L. Ed. 144 (1921) (party removing under § 1442(a)(1) bears the burden of
establishing jurisdiction); see also California v. WorldCom, Inc., 368 F.3d 86, 100 (2d Cir. 2004).
Because OptumRx and ESI are private actors and not officers of the federal government,
they must show that the protections of federal officer removal nonetheless apply to them. Private
parties seeking to invoke federal officer removal must satisfy a three-pronged test. The defendant
must establish that it is a person who “acted under a federal officer,” which typically requires
subjection, guidance, or control by a federal officer. See Watson, 551 U.S. at 151; Gordon v. Air
4
The Supreme Court held in Mesa v California, that §1442(a) “seek[s] to do nothing more than
grant district court jurisdiction over cases in which a federal officer is a defendant.” 489 U.S.
121, 136, 109 S. Ct. 959, 968, 103 L. Ed. 2d 99 (1989). The critical issue is the protection of
those who work for the federal government for conduct performed while working as a federal
officer or under the latter’s direct control and supervision. See Watson v. Philip Morris
Companies, Inc., 551 U.S. 142, 151, 127 S. Ct. 2301, 2306–07, 168 L. Ed. 2d 42 (2007).
4
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& Liquid Sys. Corp., 990 F. Supp. 2d 311 (E.D.N.Y. 2014). The defendant’s actions “must involve
an effort to assist, or to help carry out, the duties or tasks of the federal superior.” Id. at 152.
Although privity of contract with a federal officer is not required, such contracts may indicate there
has been conduct under a federal officer’s direction.
Finally, the defendant must also demonstrate that it is being sued “for or relating to any act
[it performed] under color of such federal office.” Isaacson v. Dow Chem. Co., 517 F.3d 129 (2d
Cir. 2008). To satisfy this requirement, “it must appear that the prosecution of [defendant] for
whatever offense has arisen out of the acts done by him under color of federal authority and in
enforcement of federal law, and he must by direct averment exclude the possibility that it was
based on acts or conduct of his, not justified by his federal duty.” Id. at 137. Defendant’s conduct
directed by a federal officer must be causally connected to the plaintiff’s actual claims.5
A defendant must also raise a colorable federal defense. See Isaacson, 517 F.3d at 139.
Courts need not determine the defense’s ultimate validity at the time of removal, but the federal
defense must be plausible in order to be considered colorable.
As discussed below, the Removing Defendants cannot make the requisite showing to
establish this Court’s jurisdiction.
5
See, e.g., In re Agent Orange Prod. Liab. Litig., 517 F.3d 76, 89–91 (2d Cir. 2008); Jefferson
Cnty., Ala. v. Acker, 527 U.S. 423, 431, 119 S. Ct. 2069, 144 L. Ed. 2d 408 (1999); McGillick v.
World Trade Ctr. Properties, LLC, No. 04 CIV. 3747 (AKH), 2004 WL 2049260, at *3
(S.D.N.Y. Sept. 13, 2004); Depascale v. Sylvania Elec. Prod., Inc., 584 F. Supp. 2d 522
(E.D.N.Y. 2008); Jurist v. Long Island Power Auth., No. 19CV3762MKBLB, 2020 WL 1149750
(E.D.N.Y. Mar. 10, 2020); Dupervil v. All. Health Operations, LCC, 516 F. Supp. 3d 238
(E.D.N.Y. 2021), opinion vacated, appeal dismissed sub nom. Dupervil v. All. Health
Operations, LLC, No. 21-505, 2022 WL 3756009 (2d Cir. Aug. 1, 2022) (facts did not evince
special relationship with federal government sufficient to satisfy acting under” prong); Leroy v.
Hume, 554 F. Supp. 3d 470 (E.D.N.Y. 2021), aff'd, No. 21-2158-CV, 2023 WL 2928353 (2d Cir.
Apr. 13, 2023) (failure to show a special relationship of delegation, only alleging they were
complying with federal directives); Solomon v. St. Joseph Hosp., 62 F.4th 54 (2d Cir. 2023).
5
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ARGUMENT
I. Removing Defendants Cannot Establish the Required Criteria for Federal Officer
Jurisdiction
Removing Defendants rely upon federal contracts and health benefits programs as their
removal bases. ESI bases its removal on both the TRICARE and FEHB programs, while OptumRx
relies only on Veterans Health Administration. These programs cannot support removal because
Plaintiffs have expressly disclaimed that any of their claims arise from or relate in any way to these
programs or to the Removing Defendants’ conduct in connection with these programs. Separate
and apart from this disclaimer, moreover, the Removing Defendants cannot satisfy all three prongs
of the Second Circuit’s federal officer removal test.
A. Plaintiffs Expressly Disclaimed Any Claims Arising from Conduct Regarding
Federal Health Benefits Programs and Plans, Federal Contracts, Employees
and Beneficiaries.
As a threshold matter, Plaintiffs have disclaimed any claims that arise from or implicate
the Removing Defendants’ participation in any federal health benefit programs or plans, or any
federal contracts. To the extent that Plaintiffs refer at all to public entities that have contracted
with the Removing Defendants, such allegations relate solely to state contracts and state health
plans. No version of Plaintiffs’ complaints has ever expressly asserted claims arising from or
related to prescriptions adjudicated or processed under any federal program, contract or plan.
OptumRx has failed to provide this Court (or Plaintiffs) with a copy of any purported federal
contract and neither Removing Defendant has identified any specific allegation that implicates any
federal plan or program Moreover, Plaintiffs’ allegations squarely concern circumstances where
price negotiations, formularies and other relevant aspects are under Defendants’ sole control and
not determined by federal law or federal contract. Indeed, to the extent that the Removing
6
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Defendants’ conduct is ever determined by federal law or federal contract, that conduct is, by
definition outside the scope of Plaintiffs’ complaints.
1. New York Plaintiffs May Disclaim Federal Jurisdiction
Courts in this jurisdiction have consistently held that clear, unambiguous waivers and
disclaimers are sufficient to abandon a claim and eliminate the federal officer statute as a basis for
federal jurisdiction. Such disclaimers have been found in a written waiver, an amended complaint,
or statements made in a motion to remand at the outset of a civil case. See Maguire v. A.C. & S.,
Inc., No. 14 CIV. 7578 PAE, 2015 WL 4934445, at *2, 4 (S.D.N.Y. Aug. 18, 2015); also, Frawley
v. Gen. Elec. Co., No. 06 CIV. 15395 (CM), 2007 WL 656857 (S.D.N.Y. Mar. 1, 2007).6
“[I]n the usual case in which all federal-law claims are eliminated before trial, the balance
of factors to be considered under the [supplemental] jurisdiction doctrine – judicial economy,
convenience, fairness, and comity – will point toward declining to exercise jurisdiction over the
remaining state-law claims.” Valencia ex rel. Franco v. Lee, 316 F.3d 299, 305 (2d Cir. 2003)
(quoting Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 n.7, 108 S. Ct. 614, 98 L. Ed. 2d 720
(1988)); see, also, Oneida Indian Nation of New York v. Madison Cnty., 665 F.3d 408, 437 (2d
Cir. 2011). Where “plaintiffs no longer have any viable federal claim, any remaining state law
claims belong in state, rather than federal, court.” Sadallah v. City of Utica, 383 F.3d 34, 40 (2d
6
See, also, Arthur Glick Truck Sales, Inc. v. H.O. Penn Mach. Co., 332 F. Supp. 2d 584, 586
(S.D.N.Y. 2004); Albrecht v. A.O. Smith Water Prod., No. 11 CIV. 5990 BSJ MHD, 2011 WL
6778471, at *2 (S.D.N.Y. Dec. 16, 2011); Nix v. Off. of Comm'r of Baseball, No. 17-CV-1241
(RJS), 2017 WL 2889503, at *4 (S.D.N.Y. July 6, 2017) (remand where “plaintiff has voluntarily
dismissed his federal claims prior to the start of discovery, even when his ‘manifest purpose’ in
doing so ‘is to defeat federal jurisdiction.’”); Meer Enterprises, LLC v. Kocak, No. 18 CIV. 00006
(JFK), 2018 WL 1901478, at *3 (S.D.N.Y. Apr. 20, 2018); Nanavati v. New Sch. for Soc. Rsch.,
No. 20 CIV. 935 (AT), 2020 WL 1876359, at *1–2 (S.D.N.Y. Apr. 15, 2020) (collecting cases);
Quire v. City of New York, No. 19-CV-10504 (RA), 2021 WL 293819, at *7 (S.D.N.Y. Jan. 28,
2021); Amador v. City of New York, No. 20-CV-956 (RA), 2021 WL 2809541, at *2 (S.D.N.Y.
July 6, 2021).
7
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Cir. 2004). A post-removal amendment to a complaint may require remand if it destroys the basis
of subject matter jurisdiction. See 28 U.S.C.A. § 1447 (c), (e); also Hamilton v. Aetna Life & Cas.
Co., 5 F.3d 642, 644 (2d Cir. 1993); Hosein v. CDL W. 45th St., LLC, No. 12 CIV. 06903 LGS,
2013 WL 4780051 (S.D.N.Y. June 12, 2013).
2. Plaintiffs Proffered Effective, Non-Circular and Comprehensive Federal Claims
Disclaimers in this Consolidated Action.
To avoid ambiguity, Plaintiffs submitted an effective and non-circular disclaimer that is
sufficiently clear and specific so that a state court would not be required to consider whether the
Defendants’ conduct is entitled to federal officer protection. Regardless of whether the Removing
Defendants would initially have been entitled to federal officer removal, Plaintiffs’ post-removal
disclaimers eliminate jurisdiction under federal officer removal.
Plaintiffs disclaimed federal claims on multiple occasions, to no avail – including by
offering to stipulate a claims disclaimer with the Removing Defendants pursuant to a prior
stipulation entered in another opioids case in Missouri (Jefferson County) by these same
Defendants.7 During the premotion conference, Plaintiffs reiterated its position and willingness to
stipulate a claims disclaimer. The Court suggested that Plaintiffs amend their complaints to “carve
out” allegations used to support the notices of removal based exclusively on the federal officer
statute and thereafter to move for remand. No Defendant raised any objection to the suggestion.
Each Plaintiff filed an amended complaint (“September 2023 Amended Complaint”) in
their individual cases and now collectively seek remand per §1447 (c) on the ground that the case
7
A copy of the Jefferson County Stipulation Documents is included as Exhibit 5. Therein, the
Removing Defendants agreed to stipulate that the claims asserted did not contemplate federal
officers, federal contracts or plans. The proposed execution of a similar stipulation in the instant
matter would have conserved this Court’s judicial resources, creating the conditions for an
expedited uncontested or joint remand. The Removing Defendants refused to execute any
stipulation because of “litigation strategy” (see Exhibit 6).
8
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is in the preliminary stages and all federal claims and defenses have been explicitly removed. Even
if OptumRx and ESI originally alleged facts sufficient to support removal, Plaintiffs’ amended
complaints render them irrelevant, as they originally argued that “Plaintiff’s claims implicate
OptumRx’s performance at the direction of federal government entities” (OptumRx Notice of
Removal ¶ 5) and ESI’s performance under its contract with the DoD to provide services to military
service members, veterans, and other members of TRICARE, as well as services to federal
employees who are members of FEHBP plans. (ESI Notice of Removal ¶ 3). The disclaimer8
adopts language from the stipulations between Removing Defendants and Jefferson County
(Exhibit 5), as well as legal authority that has allowed plaintiffs to effectively remand their cases
to state courts, including People of the State of California v. Eli Lilly & Co., No. 2:23-CV-01929-
SPG-SK, 2023 WL 4269750 (C.D. Cal. June 28, 2023); Oklahoma ex rel. Hunter v. McKesson
Corp., No. CIV-20-172-RAW, 2020 WL 5814161 (E.D. Okla. Sept. 14, 2020); Boyle v. United
Techs. Corp., 487 U.S. 500, 108 S. Ct. 2510, 101 L. Ed. 2d 442 (1988) and Martin v. Franklin Cap.
Corp., 546 U.S. 132, 126 S. Ct. 704, 163 L. Ed. 2d 547 (2005). See Exhibit 1 (Amended
Complaint, ¶¶ 3-6).
Preview
FILED: WESTCHESTER COUNTY CLERK 01/26/2024 05:01 PM INDEX NO. 75000/2022 NYSCEF DOC. NO. 55Case 7:23-cv-06096-CS Document 115 Filed 10/20/23 Page 1 of 34NYSCEF: 01/26/2024 RECEIVED UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK WESTCHESTER COUNTY, Y, No.: 7:23-cv-6096-CS (Lead Case) Plaintiff, - against – MYLAN PHARMACEUTICALS, INC., ET AL., Defendants. This Document Relates to All Actions ------------------------------------------------------------------------------------------ PLAINTIFFS’ MEMORANDUM OF LAW IN SUPPORT OF OMNIBUS MOTION TO DECLINE TO EXERCISE SUPPLEMENTAL JURISDICTION AND REMAND TO STATE COURT ------------------------------------------------------------------------------------------ HUNTER SHKOLNIK PAUL J. NAPOLI Napoli Shkolnik NS PR Law Services, LLC 1302 Avenida Ponce de León Santurce, Puerto Rico 00907 Tele: (833) 271-4502 Hunter@NSPRLaw.com PNapoli@NSPRLaw.com and SALVATORE C. BADALA (SB1587) SHAYNA E. SACKS (SS7135) Napoli Shkolnik PLLC 400 Broadhollow Rd, Suite 305 Melville, NY 11747 Tele: (212) 397-1000 Fax: (646) 843-7603 SBadala@NapoliLaw.com SSacks@NapoliLaw.com FILED: WESTCHESTER COUNTY CLERK 01/26/2024 05:01 PM INDEX NO. 75000/2022 NYSCEF DOC. NO. 55Case 7:23-cv-06096-CS Document 115 Filed 10/20/23 Page 2 of 34NYSCEF: 01/26/2024 RECEIVED TABLE OF CONTENTS INTRODUCTION......................................................................................................................... 1 BACKGROUND ........................................................................................................................... 3 LEGAL STANDARD ................................................................................................................... 4 ARGUMENT ................................................................................................................................. 6 I. Removing Defendants Cannot Establish the Required Criteria for Federal Officer Jurisdiction……………………………………………………………………………….6 A. Plaintiffs Expressly Disclaimed Any Claims Arising from Conduct Regarding Federal Health Benefits Programs and Plans, Federal Contracts, Employees and Beneficiaries…………………………………………………………………6 1. New York Plaintiffs May Disclaim Federal Jurisdiction…………………7 2. Plaintiffs Proffered Effective, Non-Circular and Comprehensive Federal Claims Disclaimers in this Consolidated Action………………………….8 B. The Requirements of the Federal Officer Removal Statute Are Not Met Here……………………………………………………………………………...10 1. “Acting Under” –Removing Defendants were not “acting under” a federal officer…………………………………………………………………….10 2. “Acting Under” –Removing Defendant ESI was not “acting under” a federal officer by administering FEHB-related services………………….12 3. “Causal Nexus” – There is no causal nexus between Removing Defendants’ actions related to Federal Contracts, Benefits Programs, Plans or Beneficiaries and Plaintiffs’ Claims under New York Law. …………..14 a. OptumRx’s VHA Contract Does Not Dictate Actions Causally Connected to Plaintiffs’ Claims………………………………….…...15 b. ESI’s DoD TRICARE Contract Does Not Dictate Actions Causally Connected to Plaintiffs’ Claims……………………………………....16 c. ESI has not met its burden to show that services to FEHB Carriers are causally connected to Plaintiffs’ claims……………………………...16 d. Removing Defendants Failed to Demonstrate a Substantial Causal Nexus……………………………………………………………… 17 ii FILED: WESTCHESTER COUNTY CLERK 01/26/2024 05:01 PM INDEX NO. 75000/2022 NYSCEF DOC. NO. 55Case 7:23-cv-06096-CS Document 115 Filed 10/20/23 Page 3 of 34NYSCEF: 01/26/2024 RECEIVED 4. “Colorable Federal Defense” –Removing Defendants have Not Met their Burden to Establish a Colorable Federal Defense……………………….18 a. Neither Removing Defendant Can Plausibly Demonstrate that it Can Avail itself of the Federal Contractor Defense………………………..18 b. ESI Cannot Plausibly Demonstrate that it Can Avail itself of the Preemption Defense…………………………………………………..20 II. The Court Should Decline to Exercise Supplemental Jurisdiction in this Case……22 CONCLUSION ........................................................................................................................... 25 iii FILED: WESTCHESTER COUNTY CLERK 01/26/2024 05:01 PM INDEX NO. 75000/2022 NYSCEF DOC. NO. 55Case 7:23-cv-06096-CS Document 115 Filed 10/20/23 Page 4 of 34NYSCEF: 01/26/2024 RECEIVED TABLE OF AUTHORITIES Page(s) Cases 1:17-MD-2804, 2023 WL 166006 (N.D. Ohio Jan. 12, 2023) ............................................................................ 17 3:21-CV-00961, 2022 WL 3643963 (N.D.N.Y. Aug. 24, 2022) .......................................................................... 25 489 U.S. 121, 109 S. Ct. 959, 103 L. Ed. 2d 99 (1989) .................................................................. 4 0838 RSM, 2009 WL 2959877 (W.D. Wash. Sept. 9, 2009) ....................................................................... 19 Albrecht v. A.O. Smith Water Prod., 2011 WL 6778471 (S.D.N.Y. Dec. 16, 2011) ............................................................................. 7 Aldorasi v. Crossroads Hosp. & Mgmt. Co., LLC, 344 F. Supp. 3d 814 (E.D. Pa. 2018) ......................................................................................... 25 Amador v. City of New York, 2021 WL 2809541 (S.D.N.Y. July 6, 2021) ................................................................................ 7 Amancio v. DePerry, 2023 WL 549092 (D. Conn. Jan. 27, 2023) .............................................................................. 18 Arthur Glick Truck Sales, Inc. v. H.O. Penn Mach. Co., 332 F. Supp. 2d 584 (S.D.N.Y. 2004) ......................................................................................... 7 Badgerow v. Walters, 596 U.S. 1, 142 S. Ct. 1310, 212 L. Ed. 2d 355 (2022) .............................................................. 4 Badilla v. Midwest Air Traffic Control Serv., Inc., 8 F.4th 105 (2d Cir. 2021) ......................................................................................................... 11 Batchelor v. Am. Optical Corp., 185 F. Supp. 3d 1358 (S.D. Fla. 2016) ................................................................................ 11, 23 Berger v. New York Univ., 2019 WL 3526533 (S.D.N.Y. Aug. 2, 2019)............................................................................. 21 Boyle v. United Techs. Corp., 487 U.S. 500, 108 S. Ct. 2510, 101 L. Ed. 2d 442 (1988)............................................... 9, 19, 20 California v. WorldCom, Inc., 368 F.3d 86 (2d Cir. 2004) .................................................................................................... 4, 18 Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 108 S. Ct. 614, 98 L. Ed. 2d 720 (1988) .............................................................. 7 Caterpillar Inc. v. Williams, 482 U.S. 386, 107 S. Ct. 2425, 96 L. Ed. 2d 318 (1987) .................................................... 20, 21 Certilman v. Becker, 807 F. Supp. 307 (S.D.N.Y. 1992) ............................................................................................ 22 Cnty. Bd. of Arlington Cnty., Virginia v. Express Scripts Pharmacy, Inc., 996 F.3d 243 (4th Cir. 2021) ..................................................................................................... 19 Cuomo v. Crane Co., 771 F.3d 113 (2d Cir. 2014) ...................................................................................................... 18 Depascale v. Sylvania Elec. Prod., Inc., 584 F. Supp. 2d 522 (E.D.N.Y. 2008) ......................................................................................... 5 iv FILED: WESTCHESTER COUNTY CLERK 01/26/2024 05:01 PM INDEX NO. 75000/2022 NYSCEF DOC. NO. 55Case 7:23-cv-06096-CS Document 115 Filed 10/20/23 Page 5 of 34NYSCEF: 01/26/2024 RECEIVED Dupervil v. All. Health Operations, LCC, 516 F. Supp. 3d 238 (E.D.N.Y. 2021) ......................................................................................... 5 Frawley v. Gen. Elec. Co., 2007 WL 656857 (S.D.N.Y. Mar. 1, 2007) ................................................................................. 7 Gerosa v. Savasta & Co., 329 F.3d 317 (2d Cir. 2003) ...................................................................................................... 21 Gordon v. Air & Liquid Sys. Corp., 990 F. Supp. 2d 311 (E.D.N.Y. 2014) ......................................................................................... 4 Hamilton v. Aetna Life & Cas. Co., 5 F.3d 642 (2d Cir. 1993) ............................................................................................................ 8 Hernandez v. Conriv Realty Assocs., 116 F.3d 35 (2d Cir. 1997) ........................................................................................................ 21 Holliday v. Crane Co., 2013 U.S. Dist. LEXIS 177171 (S.D.N.Y. Aug. 9, 2013) ......................................................... 18 Hosein v. CDL W. 45th St., LLC, 2013 WL 4780051 (S.D.N.Y. June 12, 2013) ............................................................................. 8 In re Agent Orange Prod. Liab. Litig., 517 F.3d 76 (2d Cir. 2008) .................................................................................................... 5, 19 In re Atlas Van Lines, Inc., 209 F.3d 1064 (8th Cir. 2000) ................................................................................................... 25 In re Methyl Tertiary Butyl Ether (''MTBE'') Prod. Liab. Litig., 488 F.3d 112 (2d Cir. 2007) ...................................................................................................... 12 Isaacson v. Dow Chem. Co., 517 F.3d 129 (2d Cir. 2008) ...................................................................................... 5, 10, 12, 18 Jefferson Cnty., Ala. v. Acker, 527 U.S. 423, 119 S. Ct. 2069, 144 L. Ed. 2d 408 (1999)..................................................... 5, 10 Jurist v. Long Island Power Auth., 2020 WL 1149750 (E.D.N.Y. Mar. 10, 2020)....................................................................... 5, 10 Leroy v. Hume, 554 F. Supp. 3d 470 (E.D.N.Y. 2021) ......................................................................................... 5 Maguire v. A.C. & S., Inc., 73 F. Supp. 3d 323 (S.D.N.Y. 2014) ......................................................................................... 24 Maguire v. A.C. & S., Inc., 2015 WL 4934445 (S.D.N.Y. Aug. 18, 2015)................................................................. 7, 22, 23 Martin v. Franklin Cap. Corp., 546 U.S. 132, 126 S. Ct. 704, 163 L. Ed. 2d 547 (2005) ............................................................ 9 McGillick v. World Trade Ctr. Properties, LLC, 2004 WL 2049260 (S.D.N.Y. Sept. 13, 2004) ............................................................................ 5 Meer Enterprises, LLC v. Kocak, 2018 WL 1901478 (S.D.N.Y. Apr. 20, 2018) ....................................................................... 7, 24 Nanavati v. New Sch. for Soc. Rsch., 2020 WL 1876359 (S.D.N.Y. Apr. 15, 2020) ....................................................................... 7, 24 New Hampshire v. 3M Co., 2023 WL 2691376 (D.N.H. Mar. 29, 2023) .............................................................................. 11 Nix v. Off. of Comm'r of Baseball, 2017 WL 2889503 (S.D.N.Y. July 6, 2017) ................................................................................ 7 v FILED: WESTCHESTER COUNTY CLERK 01/26/2024 05:01 PM INDEX NO. 75000/2022 NYSCEF DOC. NO. 55Case 7:23-cv-06096-CS Document 115 Filed 10/20/23 Page 6 of 34NYSCEF: 01/26/2024 RECEIVED Nuzzo v. Verizon New York, Inc., 2004 WL 1872708 (S.D.N.Y. Aug. 19, 2004)........................................................................... 21 Oklahoma ex rel. Hunter v. McKesson Corp., 2020 WL 5814161 (E.D. Okla. Sept. 14, 2020) .................................................................... 9, 22 Oneida Indian Nation of New York v. Madison Cnty., 665 F.3d 408 (2d Cir. 2011) ........................................................................................................ 7 Osterhout v. Crane Co., 2016 WL 10950439 (N.D.N.Y. Mar. 21, 2016) ........................................................................ 20 Paparella v. Liddle & Robinson, L.L.P., 2023 WL 2344725 (S.D.N.Y. Mar. 3, 2023) ....................................................................... 21, 25 Pollux Holding Ltd. v. Chase Manhattan Bank, 329 F.3d 64 (2d Cir. 2003) ........................................................................................................ 24 Powers v. Southland Corp., 4 F.3d 223 (3d Cir. 1993) .......................................................................................................... 25 Quire v. City of New York, 2021 WL 293819 (S.D.N.Y. Jan. 28, 2021) ................................................................................ 7 Sadallah v. City of Utica, 383 F.3d 34 (2d Cir. 2004) .................................................................................................... 7, 24 Shargian v. Shargian, 591 F. Supp. 3d 100 (E.D. La. 2022)......................................................................................... 25 Singh v. Prudential Ins. Co. of Am., 200 F. Supp. 2d 193 (E.D.N.Y. 2002) ....................................................................................... 25 Solomon v. St. Joseph Hosp., 62 F.4th 54 (2d Cir. 2023) ........................................................................................................... 5 Spehar v. Fuchs, No. 02-CIV., 2003 WL 23353308 (S.D.N.Y. June 18, 2003) ......................................................................... 25 Spielman v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 332 F.3d 116 .............................................................................................................................. 21 State of California v. Eli Lilly & Co., No. 2:23-CV-01929-SPG-SK, 2023 WL 4269750 (C.D. Cal. June 28, 2023) ................................................................. 9, 11, 23 State of Maryland v. Soper, 270 U.S. 9, 46 S. Ct. 185, 70 L. Ed. 449 (1926)........................................................................ 10 Stevenson v. Bank of New York Co., 609 F.3d 56 (2d Cir. 2010) ........................................................................................................ 21 Valencia ex rel. Franco v. Lee, 316 F.3d 299 (2d Cir. 2003) ............................................................................................ 7, 24, 25 Watson v. Philip Morris Companies, Inc., 551 U.S. 142, 127 S. Ct. 2301, 168 L. Ed. 2d 42 (2007) ................................................... Passim Weaver v. Metro. Life Ins. Co., 939 F.3d 618 (5th Cir. 2019) ..................................................................................................... 25 Williams v. Brantley, 492 F. Supp. 925 (W.D.N.Y. 1980) ........................................................................................... 19 Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 42 S. Ct. 35, 66 L. Ed. 144 (1921).......................................................................... 4 Statutes vi FILED: WESTCHESTER COUNTY CLERK 01/26/2024 05:01 PM INDEX NO. 75000/2022 NYSCEF DOC. NO. 55Case 7:23-cv-06096-CS Document 115 Filed 10/20/23 Page 7 of 34NYSCEF: 01/26/2024 RECEIVED 5 U.S.C. § 8902(m)(1) .................................................................................................................. 22 28 U.S.C. §§ 1441-1444, 1447 ....................................................................................................... 4 28 U.S.C.A. § 1367 ....................................................................................................................... 24 28 U.S.C.A. § 1367(a) .................................................................................................................. 22 28 U.S.C.A. § 1442 ....................................................................................................................... 10 28 U.S.C.A. § 1442(a) ............................................................................................................ 1, 2, 4 28 U.S.C.A. § 1442, subdivision (a)(1) ........................................................................................ 23 28 U.S.C.A. § 1447 (c), (e) ............................................................................................................. 8 28 U.S.C.A. §§ 1367 (c) and 1447 (c) ............................................................................................ 1 N.Y. Gen. Bus. Law § 349 ........................................................................................................ 2, 22 N.Y. Gen. Bus. Law § 350 ........................................................................................................ 2, 22 N.Y. Soc. Serv. Law § 145-b .................................................................................................... 2, 22 §1447 (c) ................................................................................................................................... 8, 24 § 1442(a)(1) .............................................................................................................................. 4, 25 Regulations 48 C.F.R. § 1602.170-16(a) .......................................................................................................... 13 48 C.F.R. § 1604.7201(a).............................................................................................................. 13 48 C.F.R. § 1604.7201(a)(6) ......................................................................................................... 13 48 C.F.R. § 1652.204-70............................................................................................................... 13 48 C.F.R. § 1652.204-74(a) .......................................................................................................... 13 48 C.F.R. § 1652.246-70............................................................................................................... 13 Other Authorities SB1587 ...................................................................................................................................... 1, 26 vii FILED: WESTCHESTER COUNTY CLERK 01/26/2024 05:01 PM INDEX NO. 75000/2022 NYSCEF DOC. NO. 55Case 7:23-cv-06096-CS Document 115 Filed 10/20/23 Page 8 of 34NYSCEF: 01/26/2024 RECEIVED INTRODUCTION Pursuant to 28 U.S.C.A. §§ 1367 (c) and 1447 (c), the 34 Plaintiffs in the above-captioned lead and member cases respectfully move this Court for an order declining to exercise jurisdiction and remanding each of the 34 cases to the Supreme Court of the State of New York, County of Westchester.1 Defendants OptumRx, Inc. (“OptumRx”) and Express Scripts Inc.’s (“ESI”) (together, the “Removing Defendants) removed these cases to this Court pursuant to the federal officer removal statute, 28 U.S.C.A. § 1442(a). The Removing Defendants – private parties, not federal officers -- rely on their involvement with certain federal government customers, federal health benefits programs and plans administered by certain federal agencies, but Plaintiffs’ allegations were never intended to implicate these federal customers, programs, or agencies and Plaintiffs have now specifically disclaimed any such claim.2 There is simply no nexus whatsoever between the work the Removing Defendants may do for the federal government and the claims asserted by Plaintiffs in these cases, which arise from the conduct of the Removing Defendants outside the context of their federal contracts. For this reason, this Court lacks subject-matter jurisdiction over these cases, which belong in New York state court where they were commenced over five years ago as part of the coordinated In re Opioid Litigation. The cases should be remanded. These actions were commenced from September of 2017 to August of 2018 and coordinated with other similar actions by the New York Litigation Coordinating Panel (“LCP”). 1 This motion is filed solely in the lead case and relates to all member cases, pursuant to this Court’s Orders dated July 20, 2023 (ECF. No. 15) and August 30, 2023. 2 See Exhibit 1 (September 2023 Amended Complaint in Westchester County Action), Exhibit 2 (Table of Individual Actions) and Exhibit 3 (State Court Pleadings). The Removing Defendants do not contend, nor could they, that these cases were removed on the basis of either diversity or federal question jurisdiction; they rely solely on the federal officer removal statute. 1 FILED: WESTCHESTER COUNTY CLERK 01/26/2024 05:01 PM INDEX NO. 75000/2022 NYSCEF DOC. NO. 55Case 7:23-cv-06096-CS Document 115 Filed 10/20/23 Page 9 of 34NYSCEF: 01/26/2024 RECEIVED Although the entire coordination was originally assigned to Justice Jerry Garguilo in Suffolk County, New York, most of the cases, including the 34 at issue here, were later transferred by the LCP to Westchester County Supreme Court and assigned to Justice Nancy Quinn Koba. In April of 2023, Plaintiffs filed amended complaints3 adding new defendants, including the Removing Defendants. The Removing Defendants then removed the cases, invoking 28 U.S.C.A. § 1442(a). The Removing Defendants cannot demonstrate that removal is proper under §1442(a). Plaintiffs’ allegations concern conduct that created, perpetuated, contributed to and maintained a public nuisance – the opioid crisis -- in their counties in New York. OptumRx and ESI are pharmacy benefit managers that controlled the flow of opioids in New York, ensured that they were regularly prescribed and flooded the market, negotiated with opioid manufacturers to give opioids favorable placement on formularies in exchange for rebates and fees, and dispensed opioids through mail order pharmacies, among other conduct. Plaintiffs allege that this conduct contributed to the public nuisance of the opioid crisis. Plaintiffs do not challenge any conduct relating to federal healthcare operations such as the Veterans Health Administration (“VHA”), Department of Defense’s (“DoD”) TRICARE operations or the Office of Personnel Management’s (“OPM”) Federal Employee Health Benefits (“FEHB”) program, nor do they challenge the administration of any such programs by a third party. Remand is appropriate because OptumRx and ESI have not satisfied any of the prongs of the federal officer removal test. Indeed, as discussed below, any allegations that could be construed to involve conduct under the direction of a federal government customer or officer (“acting under”) 3 The complaints asserted claims based exclusively on New York statutory and common law: deceptive acts and practices under N.Y. Gen. Bus. Law § 349, false advertising under N.Y. Gen. Bus. Law § 350, public nuisance, violation of N.Y. Soc. Serv. Law § 145-b, fraud, unjust enrichment and negligence. See April 2023 Short-Form Complaint, Exhibit 4. 2 FILED: WESTCHESTER COUNTY CLERK 01/26/2024 05:01 PM INDEX NO. 75000/2022 Case 7:23-cv-06096-CS Document 115 Filed 10/20/23 Page NYSCEF DOC. NO. 55 10 of 34 RECEIVED NYSCEF: 01/26/2024 have been abandoned and carved out through amendments and the inclusion of a comprehensive federal claims disclaimer based, in part, on a prior stipulation by the same Removing Defendants and plaintiff Jefferson County in another opioid case, No. 20JE-CC00029. Moreover, the Removing Defendants do not maintain any colorable federal defenses and, even if they did, in the absence of federal officer involvement, the Removing Defendants cannot keep these cases in federal court solely based on any purported federal defenses. For the reasons set forth below, this Court lacks subject matter jurisdiction over this action. Plaintiffs respectfully ask this Court to remand this matter back to Plaintiffs’ originally chosen forum, the Supreme Court of New York, County of Westchester. BACKGROUND Plaintiffs’ individual actions were filed against multiple defendants and later coordinated into the In re Opioid Litigation by New York’s LCP. Throughout the litigation, defendants were added, including Purdue, the Sackler family, manufacturers, distributors, retail chain pharmacies – and, recently, certain pharmacy benefit managers (“PBMs”) based on information obtained during the litigation. As described in Exhibit 2, the individual cases were removed to this Court in July of 2023. Following this Court’s Order, Plaintiffs amended their complaints, disclaiming federal claims and proffering additional factual allegations against the PBMs. The allegations against the PBMs involve their role in causing the opioid crisis; their failures as gatekeepers to the opioid prescription drug market; their influence in the parameters of the amounts and types of drugs that are available to patients, co-pays and authorizations their central role in facilitating dispensing of opioids; their confidential agreements with Opioid Manufacturers as to UM measures; knowledge gained through their clients, manufacturers, and other entities in the health care arena; among other 3 FILED: WESTCHESTER COUNTY CLERK 01/26/2024 05:01 PM INDEX NO. 75000/2022 Case 7:23-cv-06096-CS Document 115 Filed 10/20/23 Page NYSCEF DOC. NO. 55 11 of 34 RECEIVED NYSCEF: 01/26/2024 allegations, including the illicit conduct the reaped profits and substantial revenue in Plaintiffs’ geographic areas, all in violation of New York state law and common law. Plaintiffs’ allegations did not and do not include claims for recovery related to opioids distributed to military personnel, veterans, federal customers or health plan beneficiaries under the authority of a federal officer. LEGAL STANDARD Federal district courts are courts of limited jurisdiction. See Badgerow v. Walters, 596 U.S. 1, 142 S. Ct. 1310, 1315, 212 L. Ed. 2d 355 (2022). Congress has provided for removal of cases commenced in state court under a variety of specific circumstances, at least one of which must be satisfied in order for the removed action to remain in federal court. See 28 U.S.C. §§ 1441-1444, 1447. Here, Defendants removed solely under §1442(a), which provides for removal of actions “against or directed to” federal officers or agencies .4 Defendants removing under that provision bear the burden of establishing jurisdiction. See Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97, 42 S. Ct. 35, 66 L. Ed. 144 (1921) (party removing under § 1442(a)(1) bears the burden of establishing jurisdiction); see also California v. WorldCom, Inc., 368 F.3d 86, 100 (2d Cir. 2004). Because OptumRx and ESI are private actors and not officers of the federal government, they must show that the protections of federal officer removal nonetheless apply to them. Private parties seeking to invoke federal officer removal must satisfy a three-pronged test. The defendant must establish that it is a person who “acted under a federal officer,” which typically requires subjection, guidance, or control by a federal officer. See Watson, 551 U.S. at 151; Gordon v. Air 4 The Supreme Court held in Mesa v California, that §1442(a) “seek[s] to do nothing more than grant district court jurisdiction over cases in which a federal officer is a defendant.” 489 U.S. 121, 136, 109 S. Ct. 959, 968, 103 L. Ed. 2d 99 (1989). The critical issue is the protection of those who work for the federal government for conduct performed while working as a federal officer or under the latter’s direct control and supervision. See Watson v. Philip Morris Companies, Inc., 551 U.S. 142, 151, 127 S. Ct. 2301, 2306–07, 168 L. Ed. 2d 42 (2007). 4 FILED: WESTCHESTER COUNTY CLERK 01/26/2024 05:01 PM INDEX NO. 75000/2022 Case 7:23-cv-06096-CS Document 115 Filed 10/20/23 Page NYSCEF DOC. NO. 55 12 of 34 RECEIVED NYSCEF: 01/26/2024 & Liquid Sys. Corp., 990 F. Supp. 2d 311 (E.D.N.Y. 2014). The defendant’s actions “must involve an effort to assist, or to help carry out, the duties or tasks of the federal superior.” Id. at 152. Although privity of contract with a federal officer is not required, such contracts may indicate there has been conduct under a federal officer’s direction. Finally, the defendant must also demonstrate that it is being sued “for or relating to any act [it performed] under color of such federal office.” Isaacson v. Dow Chem. Co., 517 F.3d 129 (2d Cir. 2008). To satisfy this requirement, “it must appear that the prosecution of [defendant] for whatever offense has arisen out of the acts done by him under color of federal authority and in enforcement of federal law, and he must by direct averment exclude the possibility that it was based on acts or conduct of his, not justified by his federal duty.” Id. at 137. Defendant’s conduct directed by a federal officer must be causally connected to the plaintiff’s actual claims.5 A defendant must also raise a colorable federal defense. See Isaacson, 517 F.3d at 139. Courts need not determine the defense’s ultimate validity at the time of removal, but the federal defense must be plausible in order to be considered colorable. As discussed below, the Removing Defendants cannot make the requisite showing to establish this Court’s jurisdiction. 5 See, e.g., In re Agent Orange Prod. Liab. Litig., 517 F.3d 76, 89–91 (2d Cir. 2008); Jefferson Cnty., Ala. v. Acker, 527 U.S. 423, 431, 119 S. Ct. 2069, 144 L. Ed. 2d 408 (1999); McGillick v. World Trade Ctr. Properties, LLC, No. 04 CIV. 3747 (AKH), 2004 WL 2049260, at *3 (S.D.N.Y. Sept. 13, 2004); Depascale v. Sylvania Elec. Prod., Inc., 584 F. Supp. 2d 522 (E.D.N.Y. 2008); Jurist v. Long Island Power Auth., No. 19CV3762MKBLB, 2020 WL 1149750 (E.D.N.Y. Mar. 10, 2020); Dupervil v. All. Health Operations, LCC, 516 F. Supp. 3d 238 (E.D.N.Y. 2021), opinion vacated, appeal dismissed sub nom. Dupervil v. All. Health Operations, LLC, No. 21-505, 2022 WL 3756009 (2d Cir. Aug. 1, 2022) (facts did not evince special relationship with federal government sufficient to satisfy acting under” prong); Leroy v. Hume, 554 F. Supp. 3d 470 (E.D.N.Y. 2021), aff'd, No. 21-2158-CV, 2023 WL 2928353 (2d Cir. Apr. 13, 2023) (failure to show a special relationship of delegation, only alleging they were complying with federal directives); Solomon v. St. Joseph Hosp., 62 F.4th 54 (2d Cir. 2023). 5 FILED: WESTCHESTER COUNTY CLERK 01/26/2024 05:01 PM INDEX NO. 75000/2022 Case 7:23-cv-06096-CS Document 115 Filed 10/20/23 Page NYSCEF DOC. NO. 55 13 of 34 RECEIVED NYSCEF: 01/26/2024 ARGUMENT I. Removing Defendants Cannot Establish the Required Criteria for Federal Officer Jurisdiction Removing Defendants rely upon federal contracts and health benefits programs as their removal bases. ESI bases its removal on both the TRICARE and FEHB programs, while OptumRx relies only on Veterans Health Administration. These programs cannot support removal because Plaintiffs have expressly disclaimed that any of their claims arise from or relate in any way to these programs or to the Removing Defendants’ conduct in connection with these programs. Separate and apart from this disclaimer, moreover, the Removing Defendants cannot satisfy all three prongs of the Second Circuit’s federal officer removal test. A. Plaintiffs Expressly Disclaimed Any Claims Arising from Conduct Regarding Federal Health Benefits Programs and Plans, Federal Contracts, Employees and Beneficiaries. As a threshold matter, Plaintiffs have disclaimed any claims that arise from or implicate the Removing Defendants’ participation in any federal health benefit programs or plans, or any federal contracts. To the extent that Plaintiffs refer at all to public entities that have contracted with the Removing Defendants, such allegations relate solely to state contracts and state health plans. No version of Plaintiffs’ complaints has ever expressly asserted claims arising from or related to prescriptions adjudicated or processed under any federal program, contract or plan. OptumRx has failed to provide this Court (or Plaintiffs) with a copy of any purported federal contract and neither Removing Defendant has identified any specific allegation that implicates any federal plan or program Moreover, Plaintiffs’ allegations squarely concern circumstances where price negotiations, formularies and other relevant aspects are under Defendants’ sole control and not determined by federal law or federal contract. Indeed, to the extent that the Removing 6 FILED: WESTCHESTER COUNTY CLERK 01/26/2024 05:01 PM INDEX NO. 75000/2022 Case 7:23-cv-06096-CS Document 115 Filed 10/20/23 Page NYSCEF DOC. NO. 55 14 of 34 RECEIVED NYSCEF: 01/26/2024 Defendants’ conduct is ever determined by federal law or federal contract, that conduct is, by definition outside the scope of Plaintiffs’ complaints. 1. New York Plaintiffs May Disclaim Federal Jurisdiction Courts in this jurisdiction have consistently held that clear, unambiguous waivers and disclaimers are sufficient to abandon a claim and eliminate the federal officer statute as a basis for federal jurisdiction. Such disclaimers have been found in a written waiver, an amended complaint, or statements made in a motion to remand at the outset of a civil case. See Maguire v. A.C. & S., Inc., No. 14 CIV. 7578 PAE, 2015 WL 4934445, at *2, 4 (S.D.N.Y. Aug. 18, 2015); also, Frawley v. Gen. Elec. Co., No. 06 CIV. 15395 (CM), 2007 WL 656857 (S.D.N.Y. Mar. 1, 2007).6 “[I]n the usual case in which all federal-law claims are eliminated before trial, the balance of factors to be considered under the [supplemental] jurisdiction doctrine – judicial economy, convenience, fairness, and comity – will point toward declining to exercise jurisdiction over the remaining state-law claims.” Valencia ex rel. Franco v. Lee, 316 F.3d 299, 305 (2d Cir. 2003) (quoting Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 n.7, 108 S. Ct. 614, 98 L. Ed. 2d 720 (1988)); see, also, Oneida Indian Nation of New York v. Madison Cnty., 665 F.3d 408, 437 (2d Cir. 2011). Where “plaintiffs no longer have any viable federal claim, any remaining state law claims belong in state, rather than federal, court.” Sadallah v. City of Utica, 383 F.3d 34, 40 (2d 6 See, also, Arthur Glick Truck Sales, Inc. v. H.O. Penn Mach. Co., 332 F. Supp. 2d 584, 586 (S.D.N.Y. 2004); Albrecht v. A.O. Smith Water Prod., No. 11 CIV. 5990 BSJ MHD, 2011 WL 6778471, at *2 (S.D.N.Y. Dec. 16, 2011); Nix v. Off. of Comm'r of Baseball, No. 17-CV-1241 (RJS), 2017 WL 2889503, at *4 (S.D.N.Y. July 6, 2017) (remand where “plaintiff has voluntarily dismissed his federal claims prior to the start of discovery, even when his ‘manifest purpose’ in doing so ‘is to defeat federal jurisdiction.’”); Meer Enterprises, LLC v. Kocak, No. 18 CIV. 00006 (JFK), 2018 WL 1901478, at *3 (S.D.N.Y. Apr. 20, 2018); Nanavati v. New Sch. for Soc. Rsch., No. 20 CIV. 935 (AT), 2020 WL 1876359, at *1–2 (S.D.N.Y. Apr. 15, 2020) (collecting cases); Quire v. City of New York, No. 19-CV-10504 (RA), 2021 WL 293819, at *7 (S.D.N.Y. Jan. 28, 2021); Amador v. City of New York, No. 20-CV-956 (RA), 2021 WL 2809541, at *2 (S.D.N.Y. July 6, 2021). 7 FILED: WESTCHESTER COUNTY CLERK 01/26/2024 05:01 PM INDEX NO. 75000/2022 Case 7:23-cv-06096-CS Document 115 Filed 10/20/23 Page NYSCEF DOC. NO. 55 15 of 34 RECEIVED NYSCEF: 01/26/2024 Cir. 2004). A post-removal amendment to a complaint may require remand if it destroys the basis of subject matter jurisdiction. See 28 U.S.C.A. § 1447 (c), (e); also Hamilton v. Aetna Life & Cas. Co., 5 F.3d 642, 644 (2d Cir. 1993); Hosein v. CDL W. 45th St., LLC, No. 12 CIV. 06903 LGS, 2013 WL 4780051 (S.D.N.Y. June 12, 2013). 2. Plaintiffs Proffered Effective, Non-Circular and Comprehensive Federal Claims Disclaimers in this Consolidated Action. To avoid ambiguity, Plaintiffs submitted an effective and non-circular disclaimer that is sufficiently clear and specific so that a state court would not be required to consider whether the Defendants’ conduct is entitled to federal officer protection. Regardless of whether the Removing Defendants would initially have been entitled to federal officer removal, Plaintiffs’ post-removal disclaimers eliminate jurisdiction under federal officer removal. Plaintiffs disclaimed federal claims on multiple occasions, to no avail – including by offering to stipulate a claims disclaimer with the Removing Defendants pursuant to a prior stipulation entered in another opioids case in Missouri (Jefferson County) by these same Defendants.7 During the premotion conference, Plaintiffs reiterated its position and willingness to stipulate a claims disclaimer. The Court suggested that Plaintiffs amend their complaints to “carve out” allegations used to support the notices of removal based exclusively on the federal officer statute and thereafter to move for remand. No Defendant raised any objection to the suggestion. Each Plaintiff filed an amended complaint (“September 2023 Amended Complaint”) in their individual cases and now collectively seek remand per §1447 (c) on the ground that the case 7 A copy of the Jefferson County Stipulation Documents is included as Exhibit 5. Therein, the Removing Defendants agreed to stipulate that the claims asserted did not contemplate federal officers, federal contracts or plans. The proposed execution of a similar stipulation in the instant matter would have conserved this Court’s judicial resources, creating the conditions for an expedited uncontested or joint remand. The Removing Defendants refused to execute any stipulation because of “litigation strategy” (see Exhibit 6). 8 FILED: WESTCHESTER COUNTY CLERK 01/26/2024 05:01 PM INDEX NO. 75000/2022 Case 7:23-cv-06096-CS Document 115 Filed 10/20/23 Page NYSCEF DOC. NO. 55 16 of 34 RECEIVED NYSCEF: 01/26/2024 is in the preliminary stages and all federal claims and defenses have been explicitly removed. Even if OptumRx and ESI originally alleged facts sufficient to support removal, Plaintiffs’ amended complaints render them irrelevant, as they originally argued that “Plaintiff’s claims implicate OptumRx’s performance at the direction of federal government entities” (OptumRx Notice of Removal ¶ 5) and ESI’s performance under its contract with the DoD to provide services to military service members, veterans, and other members of TRICARE, as well as services to federal employees who are members of FEHBP plans. (ESI Notice of Removal ¶ 3). The disclaimer8 adopts language from the stipulations between Removing Defendants and Jefferson County (Exhibit 5), as well as legal authority that has allowed plaintiffs to effectively remand their cases to state courts, including People of the State of California v. Eli Lilly & Co., No. 2:23-CV-01929- SPG-SK, 2023 WL 4269750 (C.D. Cal. June 28, 2023); Oklahoma ex rel. Hunter v. McKesson Corp., No. CIV-20-172-RAW, 2020 WL 5814161 (E.D. Okla. Sept. 14, 2020); Boyle v. United Techs. Corp., 487 U.S. 500, 108 S. Ct. 2510, 101 L. Ed. 2d 442 (1988) and Martin v. Franklin Cap. Corp., 546 U.S. 132, 126 S. Ct. 704, 163 L. Ed. 2d 547 (2005). See Exhibit 1 (Amended Complaint, ¶¶ 3-6).