Free Notice (Other) - District Court of California - California

Case 3:07-cv-04911-CRB

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Timothy T. Scott (SBN 126971) [email protected] Geoffrey M. Ezgar (SBN 184243) [email protected] Paul L. Yanosy (SBN 233014) [email protected] SIDLEY AUSTIN LLP 555 California Street San Francisco, California 94104 Telephone: (415) 772-1200 Facsimile: (415) 772-7400 Paul E. Kalb, M.D. SIDLEY AUSTIN LLP 1501 K Street, N.W. Washington, D.C. 20005 Telephone: (202) 736-8000 Facsimile: (202) 736-8711 Nina M. Gussack (admitted pro hac vice) Andrew R. Rogoff (admitted pro hac vice) Allyson L. Baccini (admitted pro hac vice) PEPPER HAMILTON LLP 3000 Two Logan Square Eighteenth and Arch Streets Philadelphia, PA 19103-2799 Telephone: (215) 981-4000 Facsimile: (215) 981-4750 Attorneys For Defendant ELI LILLY AND COMPANY UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION STATE OF CALIFORNIA ex rel. JAYDEEN VICENTE and JAYDEEN VICENTE Individually, Relator, vs. ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. 07-cv-04911-CRB Assigned to: Hon. Charles R. Breyer DEFENDANT ELI LILLY AND COMPANY'S SUPPLEMENTAL NOTICE OF REMOVAL

ELI LILLY AND COMPANY, Defendant.

SUPPLEMENTAL NOTICE OF REMOVAL ­ CASE NO. 07-CV-04911-CRB

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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1. Supplemental Notice of Removal On September 21, 2007, Defendant Eli Lilly and Company ("Lilly") removed

this action to this Court, pursuant to 28 U.S.C. §§ 1331, 1441 and 1446, on two separate and independent grounds: (1) Relator Jaydeen Vicente's ("Relator") has expressly alleged violations of, and "liability under," the federal False Claims Act, 31 U.S.C § 3729. See Compl. ¶¶ 64, 210 & p. 43, and (2) Relator has asserted state law claims that "necessarily raise a stated federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities." Grable & Sons Metal Prods., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308 (2005). (Lilly's Notice of Removal of Action Under 28 U.S.C. § 1441(b), pp. 5-13). 2. This Court's jurisdiction continues to be proper for both of the reasons set

forth in Lilly's Notice or Removal. Relator has recently filed a motion from which Lilly has ascertained that there is an additional basis for this Court's jurisdiction. Relator's Subsequent Assertion of a Putative Class Action Removable Under CAFA 3. On November 16, 2007, Relator filed her Opposition to Lilly's Motion to

Dismiss. In this filing, Relator makes clear that, although her Complaint was not styled as a class action and did not allege class claims, she now purports to bring this action on behalf of a class. 4. Relator's assertion of a putative class action provides an additional basis for

this Court's jurisdiction ­ diversity jurisdiction pursuant to the provisions of the Class Action Fairness Act of 2005 ("CAFA"). This Court has jurisdiction under CAFA because it is a civil action in which the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs, and is a putative class action in which a member of the Plaintiff class is a citizen of a state different from the state of which Lilly, the only defendant, is a citizen. See 28 U.S.C. § 1332(d)(2)(A). A. 5. Putative Class Action Section 1332(d)(1)(B) provides that "the term `class action' means any civil

action filed under Rule 23 of the Federal Rules of Civil Procedure or similar State statute or rule of

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judicial procedure authorizing an action to be brought by 1 or more representative persons as a class action." California law so provides for such class actions, statutorily authorizing individuals to seek relief on behalf of themselves and others similarly situated "when the question is one of common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court." Cal. Code Civ. Proc., § 382. 6. Relator's Opposition contains allegations indicating that Relator seeks to

bring this action on behalf of a putative class. In particular, Relator now states that she brings this action "on behalf of all California taxpayers whose money funded the State Medicaid Program" and "Relator, as a qui tam plaintiff, is capable of vigorously and tenaciously protecting class interests and acting as a fiduciary for both the class and the State of California." (Relator's Opposition to Lilly's Motion to Dismiss, pp. 6-7). 7. Further demonstrating the class treatment she seeks, Relator's Opposition

asserts that this action "meets the requirements of Section 382," the provision of the California Code of Civil Procedure governing class actions, in that it allegedly involves "(1) an `ascertainable class' of numerous parties and (2) `community of interest in the questions of fact and law involved.'" (Relator's Opposition to Lilly's Motion to Dismiss, p. 6). 8. Finally, in a pleading filed with the MDL, Relator has stated that she "seeks

recovery of past, present, and future medical expenses for recipients of the California Medicaid and Medi-Cal program." (Plaintiffs State of California Ex. Rel Jaydeen Vicente's Memorandum in Support of Motion to Vacate The Judicial Panel on Multidistrict Litigation's Conditional Transfer Order, attached hereto (without exhibits) as Exhibit A, at pp. 3-4). This claim suggests that Relator seeks relief on behalf of a class of all "recipients of the California Medicaid and Medi-Cal program." (Id.) By seeking relief on behalf of this class, Relator asserts a right to prosecute her claims as a class action. B. 9. Amount In Controversy Relator's allegations make clear that she seeks amounts far in excess of the

$5,000,000 jurisdictional threshold set forth in 28 U.S.C. § 1332(d)(2). 10. Relator's Complaint alleges that "California has been damaged in an amount 2
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that is believed to be in excess of tens of millions of dollars annually for claims submitted for Zyprexa in Northern California alone." (Compl. ¶ 226). 11. Relator further alleges that the State of California funded "millions of dollars"

of Zyprexa purchases. (Compl. ¶¶ 11, 16, 185). C. 12. Minimal Diversity To satisfy CAFA's minimal diversity requirements, "any member of a class of

plaintiffs [must be] a citizen of a State different from any defendant." 28 U.S.C. § 1332(d)(2)(A); Serrano v. 180 Connect, Inc., 478 F.3d 1018, 1021 (9th Cir. 2007) (CAFA requires only minimal diversity for covered class actions). 13. Here, Relator is a resident of the State of California.1 (Compl. ¶ 17).

Moreover, Relator's purported class includes "all California taxpayers whose money funded the State Medicaid Program." (Relator's Opposition to Lilly's Motion to Dismiss, p. 6). 14. Lilly is an Indiana incorporation with its principal place of business in

Indiana, (Compl. ¶ 18), and thus is a resident and citizen of the State of Indiana. See 28 U.S.C. § 1332(c)(1). 15. Because all class members are citizens of California and Lilly is a citizen of

Indiana, there is diversity jurisdiction under CAFA. The fact that the State of California is not a citizen of any state does not destroy diversity because CAFA requires minimal, rather than complete, diversity. See Ponca Tribe of Indians of Oklahoma v. Continental Carbon Company, 439 F. Supp. 2d 1171, 1177-78 (W.D. Okla. July 13, 2006) (presence of plaintiff that was not a citizen of any state did not destroy diversity over class claims under CAFA). D. 16. Statutory Exceptions To CAFA Do Not Apply No defendant in this matter is a "State[], State official[], or other

governmental entit[y] against whom the district court may be foreclosed from ordering relief."

The Complaint specifically identifies Relator's residence rather than her domicile. (Compl. ¶ 17) (alleging that Relator is a "citizen of the United States and a resident of the State of California.") Other allegations in Relator's pleadings, however, support the conclusion that Relator is also domiciled in the State of California. For instance, Relator alleges in her Complaint that, beginning in 2000, she was employed by Lilly in the State of California. (Compl. ¶ 17). And Relator's Opposition to Lilly's Motion to Dismiss alleges that she is a California taxpayer. (Relator's Opposition to Lilly's Motion to Dismiss, p. 6).

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Thus, the exception to CAFA jurisdiction under 28 U.S.C. § 1332(d)(5)(A) does not apply. 17. Relator purports to bring this action on behalf of at least 100 class members in

that her purported class includes "all California taxpayers whose money funded the State Medicaid Program." (Relator's Opposition to Lilly's Motion to Dismiss, p. 6). Thus, the exception to CAFA jurisdiction under 28 U.S.C. § 1332(d)(5)(B) does not apply. 18. apply. Under the "local controversy" exception, district courts must decline jurisdiction where four circumstances are met: (1) more than twothirds of the members of the proposed plaintiff class are citizens of the original filing state; (2) at least one defendant is a defendant from whom members of the proposed plaintiff class seek significant relief, whose alleged conduct forms a significant basis of the asserted claims, and who is a citizen of the original filing state; (3) the principal injuries were incurred in the original filing state; and (4) no other class action asserting the same or similar factual allegations has been filed against any of the defendants within the three years preceding the filing of the case. Hart v. FedEx Ground Package System Inc., 457 F.3d 675, 679 (7th Cir. 2006) (citing 28 U.S.C. § 1332(d)(4)(A)). Here, the second circumstance is not met because there are not any "significant defendants" from the forum state of California. 28 U.S.C. § 1332(d)(4)(A)(II). Lilly, the only defendant to this case, is not a citizen of the forum state of California. 19. Nor does Section 1332(d)(4)(B)'s "home state exception" to CAFA The "local controversy" exception of section 1332(d)(4)(A) also does not

jurisdiction apply. Under the "home state exception," a district court shall decline to exercise jurisdiction where "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." Here, Lilly, the only defendant and therefore also the "primary defendant," is not a citizen of the forum state of California. 28 U.S.C. § 1332(d)(4)(B); (Compl. ¶ 18). 20. Because the Northern District of California has original jurisdiction over this

action under 28 U.S.C. § 1332(d)(2)(A), and because no statutory exception to such CAFA jurisdiction applies, this case is removable pursuant to 28 U.S.C. § 1441(a). 21. Venue is proper in this district and division under 28 U.S.C. § 1441(a) 4
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because the removed action has been pending within this district and division. 22. This Supplemental Notice of Removal is timely filed within thirty (30) days

after the receipt by Lilly of the pleading from which Lilly could ascertain this additional basis for removal. 28 U.S.C. § 1446(b). Relator first alleged her class claims in her Opposition to Lilly's Motion to Dismiss, filed on November 16, 2007. 23. Pursuant to 28 U.S.C. § 1446(a), Defendant is required to file "a copy of all

process, pleadings, and orders served upon" it. Lilly filed the Superior Court papers served upon it as Exhibit A to its initial Notice of Removal, filed on September 21, 2007. 24. By filing this Supplemental Notice of Removal, Defendant does not waive,

either expressly or implicitly, its rights to assert any defenses which it could have asserted in the Superior Court of the State of California for the County of San Francisco. Dated: December 5, 2007 SIDLEY AUSTIN LLP

By: /s/ Timothy T. Scott Timothy T. Scott Attorneys For Defendant ELI LILLY AND COMPANY

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