Federal Question Jurisdiction

Can you have federal question jurisdiction in a case where no federal claim is alleged?  The question has a certain self-defining quality to it, sort of like asking if something done under the table can be above board.  Or asking whether the Holy Roman Empire was holy, Roman, or an empire.

We stole that last

We were wondering when the courts would catch on to this Catch 22.  In order to survive preemption, plaintiffs suing the manufacturers of pre-market approved (“PMA”) medical devices have to allege “parallel claims” in which all “common-law” claims must be genuinely equivalent to violations of FDA regulations. But under Grable & Sons Metal Products, Inc.

In honor of Buddy Ryan, the legendary football coach who passed away last week, we will be especially crotchety in today’s case report.  It was while we were in law school in Chicago that Ryan was the coordinator of a Bears defense that was magnificently ferocious.  When the 1985 Bears won the Super Bowl, Ryan was carried off the field.  Never before or since has an assistant coach been so honored.  Ryan later went to Philadelphia, as did we.  (His arrival was slightly more ballyhooed.)  Ryan became the most beloved Eagles coach ever, though his teams never mustered a single playoff win.  Ryan is so revered here because he built a defense that fit the city’s self-image – blue collar and brutal.  It was fun watching Reggie White, Jerome Brown, Clyde Simmons, and Mike Golic maul quarterbacks.  It was fun watching Andre Waters and Wes Hopkins terrify opposing receivers.  It was fun watching linebacker Seth Joyner wreak havoc all over the field.  It was less fun watching an Eagles offense that defined the word erratic.  Aside from achievements on the field, Ryan cut the ultimate figure of pure orneriness.   He was a genuine hero in the Korean War (fighting alongside Dan Blocker, who later played Hoss in Bonanza).  Sports-and-war analogies are overused and overheated, but Ryan’s coaching style was undeniably bellicose.  He put a bounty on Dallas Cowboy players, rewarding his players for maiming America’s team.  Ryan once punched a fellow coach on the sidelines.  He had such contempt for a player that he offered to trade him for a six-pack, and the beer didn’t “even have to be cold.” Philly is a hard-core union town, and Ryan earned big-time props by refusing to coach scab players during a NFL labor dispute. Ryan guested on one of Philly’s notoriously hostile sports-talk shows and, after a caller criticized a trade, Ryan said something like, “Gee, I’m all broken-up about your opinion.”

We’re all broken up about the opinion in Oregon v. General Nutrition Corp., 2010 U.S. Dist. LEXIS 78038 (D. Oregon March 30, 2016).  It is not a drug or device case, but its treatment of removal and federal question is relevant for our work, and not in a good way.  The state of Oregon brought an action in Oregon state court (talk about home field advantage) alleging that the defendant had misrepresented that certain products were “lawful dietary supplements” when they actually contained substances forbidden (according to the state) by federal law.  While the claims were brought under Oregon law, those claims also referenced, indeed, completely turned on, an interpretation of the federal Food, Drug and Consumer Act.  The defendant removed the case to federal court.  Oregon moved to remand back to state court.  The issue was whether there was federal jurisdiction.  Both species of federal jurisdiction were in play here, federal question and diversity jurisdiction.   We will devote this piece to federal question jurisdiction, because the diversity issue is too squirrely. (In brief: a state as party cannot support diversity jurisdiction, so the defendant needed to show that the state was not the true plaintiff.  The court did not buy this argument.)

It sure seems like Oregon was raising a federal question.  Were the substances at issue permitted or forbidden by federal law?  You’ll never learn the answer to that question from this opinion.  Presumably (but, as you’ll see, we’re against presuming), that intricate issue of regulatory construction will be entrusted to good and true jurors. The court began its jurisdictional analysis with an extended riff on the “strong presumption” against finding removal jurisdiction.  We get loads about how the “burden of establishing federal subject-matter jurisdiction for purposes of removal is on the party seeking removal.”  We’ve heard all this before.  But why is there a presumption against removal jurisdiction?  It is hardly self-evident. Why is the burden on the poor defendant, who never asked to be sued?  Shouldn’t the burden be on the plaintiff, as most burdens are?  You can say that federal courts are courts of limited jurisdiction, but what court isn’t?  When we prosecuted misdemeanor cases in California state courts, we were required to prove that the crime was committed in the court’s county.  Not every case could be brought into that court.  So enough with the limited jurisdiction rationale. Isn’t the discussion of presumptions and burdens nothing more than a judicial fig leaf?  Whenever courts spill ink on presumptions and burdens, they inevitably follow-up with an analysis that claims the issue isn’t even close.  The presumption was not necessary at all, was it?

Continue Reading Why is Federal Question Jurisdiction Such a Mess?

We have posted many times about cases where a manufacturer of a regulated product is sued over alleged violations of a state consumer protection or deceptive trade practices act because of something allegedly amiss in the product’s name, labeling, advertising, or sales practices.  We know that drug and device manufacturers like the ones we represent can spend resources dealing with state attorneys general over the threat that such suits will be brought.  We cannot recall seeing, let alone posting on, a case where the manufacturer sued the state attorney general because its threat of suit—relayed to major retailers, who stopped selling the product—allegedly hurt its business and constitutional rights.  There would seem to be lots of reasons why an action like this might not be taken by a company that wants to keep doing business in the particular state for other products it manufacturers.  But if you are a one product, dietary supplement company and your presumably large market in Texas disappeared after letters went out based on a determination by the Texas AG’s office, not by a court, then you might be the one to bring suit preemptively.  That is what happened in NiGen Biotech, L.L.C., v. Paxton, No. 14-10923, 2015 U.S. App. LEXIS 17223 (5th Cir. Sept. 30, 2015).

The unusual posture of the case—in comparison to those we usually handle or read—means that it delves into constitutional issues that we knew better back when we clerked and the docket was sprinkled with cases against state actors.  The ones brought by prisoners are remembered more for their unique fact patterns and brand of advocacy than for the constitutional principles they implicated.  NiGen, likewise, holds our interest not because its treatment of sovereign immunity, federal question jurisdiction, and standing has direct implications for the sort of cases that normally fill our posts.  Rather, it shows that a manufacturer can go on the offensive against a state AG who probably thought it could do just about whatever it wanted prior to bringing its own suit.  It is not that we think the manufacturer Nigen is right on the underlying issue of whether the product’s label was deceptive, which touches on some complex constitutional issues, especially since Amarin has come down since this case started.

Continue Reading Going on Offense against State Deceptive Trade Practices AG Actions