A lawsuit filed in June by state prosecutors against Endo Pharmaceuticals Inc., Purdue Pharma L.P., and other makers of prescription painkillers in an effort to curb the regional addiction epidemic was remanded last week back to state court.
The order by U.S. Chief District Judge Thomas A. Varlan counters a request made recently by lawsuit defendants Endo Health Solutions Inc. and Endo Pharmaceuticals Inc., seeking to have the case heard in U.S. District Court.
Varlan remanded the case to state court in response to a motion by state attorneys general filed in reaction to the Endo motion.
The case will be heard in Sullivan County Circuit Court.
Dan Armstrong, district attorney general of the 3rd Judicial District that includes Greene County; 2nd Judicial District Attorney General Barry Staubus, whose district includes Sullivan County; and Tony Clark, 1st Judicial District attorney general in Washington and three surrounding counties, announced the civil lawsuit in June.
Defendants include Endo and other manufacturers, a now-closed Kingsport medical clinic and two private individuals convicted of pill sales.
The civil action was jointly filed by Staubus, Armstrong and Clark. A fourth plaintiff, Baby Doe, through his Guardian Ad Litem, was born addicted to opioids in 2015 at Holston Valley Regional Hospital.
The lawsuit maintains that all contribute to the problem. Staubus declared Sullivan County “ground zero” in the opioid epidemic, with devastating effects also felt in surrounding counties, including Greene.
Manufacturer defendants that make millions of dollars in profits on the sale of opioid pills have the resources to guarantee a lengthy legal battle. Plaintiffs acknowledge the lawsuit may take years to resolve.
Varlan’s Oct. 20 order setting the venue in Sullivan County Circuit Court is a victory for plaintiffs in the case, Armstrong said this week.
“Judge Varlan ruled to send it back to state court, which is where we wanted it, so we’re very pleased with that result,” Armstrong said.
The lawsuit was initiated June 13 in Sullivan County Circuit Court. Plaintiffs allege the manufacturer defendants “created a fraudulent scheme to grow the prescription opioid market by misleading doctors and the public about the addictive nature of opioids,” according to court documents.
Manufacturer defendants such as Endo “are citizens of states or a foreign state other than Tennessee,” Varlan’s memorandum of opinion adds.
On July 27, the defendants filed a notice of removal, claiming “diversity jurisdiction” as the basis of removal to federal jurisdiction. Plaintiffs filed a motion in response to keep the case in state court.
Under certain conditions, a defendant may have a case removed to federal court after it is filed in state court. A case brought in a state court can be removed to federal court “(if) the district courts have original jurisdiction,” the court order states.
Varlan noted that federal courts have “limited original jurisdiction.”
“A presumption against federal jurisdiction exists, and federal courts must carefully guard against against the temptation to expand beyond the jurisdictional bounds established by Congress.”
The general rule, the opinion states, “(is) that an action may be removed from state court to federal court only if a federal court would have original jurisdiction over the claim in (the) suit.”
The Endo motion argues that the federal district “has original subject matter jurisdiction over actions based on diversity of citizenship,” or a dispute between citizens of different states where the matter of controversy is over $75,000.
When ambiguities arise in determining whether federal jurisdiction requirements are satisfied, courts must strictly construe the statutes and resolve those questions “in favor of remand to the state courts,” the opinion states.
In his order, Varlan essentially ruled that Endo failed to meet the burden resolving ambiguities and the case was remanded back to state court, where it originated.
Provider defendants like the medical clinic are distinguished in the lawsuit from manufacturer defendants like Endo and Purdue Pharma. The provider defendants did not request the case be heard in federal court.
In the notice of removal, “Endo submits that the claims against the manufacturer defendants are actually based on product misrepresentation, whereas the claims against the product defendants are based on illegal distribution.”
The federal court concluded that it does not have the authority to determine if the defendants are wrongfully joined. The Tennessee Drug Dealer Liability Act specifically “authorizes the joinder of these defendants,” and doesn’t change the plaintiff’s motion to remand, the order states.
In closing the federal court case, Varlan denied the plaintiffs’ request for attorney’s fees.
The attempt by Endo and other manufacturer defendants to move the case to federal court is likely just the first salvo in a determined attempt to derail the lawsuit filed by the attorneys general, several legal observers said.
The Tennessee Drug Dealer Liability Act passed in 2015 gives prosecutors what they believe is a solid legal basis for many of the claims made on behalf of plaintiffs like Baby Doe, whose “first days of life were spent in excruciating pain as doctors weaned him from his opioid addiction,” the complaint states.
In addition to Endo Pharmaceuticals and Purdue Pharma, defendants characterized in the lawsuit as “related companies” include Mallinckrodt LLC.
The lawsuit states that OxyContin is Purdue’s best-selling opioid, increasing from national sales of $800 million in 2006 to between $2.47 and $2.99 billion annually.
Other governmental entities and states have similar lawsuits pending.
In 2016, there were 21 cases of autopsies of Greene County residents attributed to drug overdoses or listing drugs as a “significant factor” in the cause of death out of a total of 76 autopsies conducted. That identifies drugs as a direct or closely related factor in the death of more than 27 percent of those who had autopsies conducted.
The Nashville law firm of Branstetter, Stranch & Jennings PLLC, represents the attorneys general. The civil action was commenced in Sullivan County Circuit Court on behalf of those it claims are victimized by “fraudulent market campaigns” that convince doctors that drugs like OxyContin are not highly addictive and a safe means of reducing pain.