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United States ex rel. Galmines v. Novartis Pharmaceuticals Corporation

United States District Court, Third Circuit

November 5, 2013

UNITED STATES OF AMERICA ex rel. DONALD R. GALMINES, et al., Plaintiffs,
v.
NOVARTIS PHARMACEUTICALS CORPORATION Defendant.

MEMORANDUM

GENE E.K. PRATTER, District Judge

Following the Court's partial grant of Novartis Pharmaceuticals Corporation's ("Novartis") Motion to Dismiss (Docket Nos. 62, 65 & 66, 68 & 69), Relator Donald Galmines moves for reconsideration of the Court's dismissal of his claims under California, D.C., Louisiana, and Massachusetts law. Finding that it committed clear error by dismissing these claims for lack of supplemental jurisdiction, the Court grants Mr. Galmines's Motion for Reconsideration (Docket No. 77) in part, as to the Louisiana and Massachusetts claims, and denies it in part, as to the California and D.C. claims, because while the Court has supplemental jurisdiction over all the claims, the California and D.C. claims are barred by Mr. Galmines's failure to meet those laws' "original source" requirements.

I. BACKGROUND

Qui tam Relator Donald Galmines, alleging that Novartis caused the submission of false claims to government healthcare systems by wrongfully marketing its prescription drug Elidel, has sued Novartis under the Federal False Claims Act, 31 U.S.C. §§ 3729 et seq., and various state false claims acts. On June 13, 2013, the Court granted in part and denied in part Novartis's Second Motion to Dismiss. In particular, the Court dismissed Mr. Galmines's claims under California, D.C., Louisiana, and Massachusetts law. Agreeing with Novartis, the Court reasoned that those states' false claims statutes "indicate that a relator must file suit in state court." United States ex rel. Galmines v. Novartis Pharm. Corp., No. 06-3213, 2013 WL 2649704, at *13 (E.D. Pa. June 13, 2013); see CAL. GOV'T CODE § 12652(c)(2) ("A complaint filed by a private person under this subdivision shall be filed in superior court...."); D.C. CODE § 2-381.03(b)(2) ("A complaint filed by a qui tam plaintiff pursuant to this subsection shall be filed in the Superior Court....") (emphasis added); LA. REV. STAT. ANN. § 46:439.1(A) ("A private person may institute a civil action in the courts of this state...."); MASS. GEN. LAWS ch. 12, § 5C(2) (authorizing qui tam actions "in superior court"). Because "Mr. Galmines neither discusses these specific statutes nor contends that he has filed suit in the courts of the foregoing states, " the Court dismissed the claims under those statutes with prejudice. Galmines, 2013 WL 2649704, at *14.

Twenty days later, Mr. Galmines moved for reconsideration of the dismissal of these state law claims. In response, Novartis contends that the Motion should not be granted because it is untimely and meritless.

II. THE STATE LAW CLAIMS

A

Mr. Galmines argues that the Court erred in holding the California, D.C., Louisiana, and Massachusetts statutes to be jurisdictional and to act, therefore, as bars to its exercise of jurisdiction over his claims under those statutes.

Upon further consideration, the Court agrees. Two federal statutes provide for supplemental jurisdiction over these state law claims. First, 28 U.S.C. § 1367 provides, in pertinent part, that

in any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution.

28 U.S.C. § 1367(a). Second, Congress, ostensibly concerned about the consolidation of false claims suits, has also specifically provided that "[t]he district courts shall have jurisdiction over any action brought under the laws of any State for the recovery of funds paid by a State or local government if the action arises from the same transaction or occurrence as an action brought under [the Federal False Claims Act]." 31 U.S.C. § 3732(b).

Because his claims under California, D.C., Louisiana, and Massachusetts law arise from the same transactions or occurrences as his federal action, Mr. Galmines argues, this Court has jurisdiction over them. Novartis, by contrast, argues that "the Court is not required to maintain Relator's state claims at this stage, particularly where those same states' legislatures have determined that claims brought under their respective state false claim statutes must be filed in state court." Novartis Br. at 6.

While a court's exercise of supplemental jurisdiction may be discretionary in some cases, see 28 U.S.C. § 1367(c), this Court dismissed the state claims at issue here on the mistaken reasoning that the claims had to be filed in state court-i.e., tantamount to holding that the Court simply lacked the power to exercise jurisdiction over them. The question must therefore be whether the Court properly has jurisdiction over these claims, for if it does, "justification" for its exercise here, even if in fact that jurisdiction is discretionary, "lies in considerations of judicial economy, convenience and fairness to litigants." United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 726 (1966).

* * *

Section 1367(a) is a codification of

principles of pendent and ancillary jurisdiction by which the federal courts' original jurisdiction over federal questions carries with it jurisdiction over state law claims that "derive from a common nucleus of operative fact, " such that "the relationship between [the federal] claim and the state claim permits the conclusion that the entire action before the court comprises but one constitutional case.'" Gibbs, 383 U.S. [at] 725.

City of Chicago v. Int'l Coll. of Surgeons, 522 U.S. 156, 164-65 (1997). As the language of the statute suggests, so long as Article III of the Constitution permits a court to exercise supplemental jurisdiction over a state law claim, § 1367 provides authorization (and, indeed, may even mandate the exercise of jurisdiction). See New Rock Asset Partners, L.P. v. Preferred Entity Advancements, Inc., 101 F.3d 1492, 1509 (3d Cir. 1996) ("[T]he ...


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