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City of New Castle v. Purdue Pharma, L.P.

United States District Court, E.D. Pennsylvania

July 16, 2018

THE CITY OF NEW CASTLE; CITY OF ALIQUIPPA; and UNION TOWNSHIP, on behalf of themselves and all others similarly situated, Plaintiffs,
v.
PURDUE PHARMA L.P.; PURDUE PHARMA, INC.; THE PURDUE FREDERICK COMPANY, INC.; TEVA PHARMACEUTICALS USA, INC.; CEPHALON, INC.; JOHNSON & JOHNSON; JANSSEN PHARMACEUTICALS, INC.; ORTHO-MCNEIL-JANSSEN PHARMACEUTICALS, INC. N/K/A JANSSEN PHARMACEUTICALS, INC.; JANSSEN PHARMACEUTICA, INC. N/K/A JANSSEN PHARMACEUTICALS, INC.; ENDO HEALTH SOLUTIONS INC.; and ALLERGAN PLC, Defendants.

          MEMORANDUM

          ROBERT F. KELLY, SR. J.

         Presently before the Court is the Motion to Remand filed by Plaintiffs, the City of New Castle (“New Castle”), City of Aliquippa, and Union Township (collectively, “Plaintiffs”). Defendants, Teva Pharmaceuticals USA, Inc. (“Teva”) and Cephalon, Inc. (“Cephalon”) (collectively, “Teva Defendants”) filed a Response in Opposition to Plaintiffs' Motion to Remand, which included the argument that the Court should stay this action pending the transfer of the action to the federal multidistrict litigation (“MDL”) entitled In re Nat'l Prescription Opiate Litig., MDL No. 2804 (“Opiate MDL”). Plaintiffs filed a Reply opposing Teva Defendants' request for a stay and asserting that the action should be remanded. For the reasons noted below, we will stay this action and deny Plaintiffs' Motion to Remand without prejudice.

         I. BACKGROUND

         On March 16, 2018, Plaintiffs filed a Class Action Complaint against Defendants, Purdue Pharma L.P.; Purdue Pharma, Inc.; The Purdue Frederick Company, Inc.; Teva; Cephalon; Johnson & Johnson; Janssen Pharmaceuticals, Inc.; Ortho-McNeil-Janssen Pharmaceuticals, Inc. n/k/a Janssen Pharmaceuticals, Inc.; Janssen Pharmaceutica, Inc. n/k/a Janssen Pharmaceuticals, Inc.; Endo Health Solutions Inc.; and Allergan PLC (collectively, “Defendants”) in the Court of Common Pleas of Philadelphia County, Pennsylvania.[1]

         In the Class Action Complaint, Plaintiffs purport to assert claims on behalf of themselves and as a class action on behalf of “[a]ll political subdivisions, municipalities, cities, townships and counties in the Commonwealth of Pennsylvania who incurred damages as a result [of] Defendants' marketing of prescription opioids.” (Compl. ¶ 67.) The Complaint asserts the following three causes of action against all Defendants: (1) consumer fraud-deceptive practices, 73 Pa. Cons, Stat. §§ 201-1-201-9.3 et seq.; (2) public nuisance; and (3) unjust enrichment. (Id. ¶¶ 79-99.)

         On April 9, 2018, Teva Defendants timely removed this action to this Court under the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d).[2] (Doc. No. 1.) On April 16, 2018, the Judicial Panel on Multidistrict Litigation (“JPML” or “Opiate MDL Panel”) conditionally transferred this action to the Opiate MDL.[3] (Defs.' Opp'n Pls.' Mot. for Remand at 2) (citing In re Nat'l Prescription Opiate Litig., MDL No. 2804, Doc. 1202 (Apr. 16, 2018 CTO-24)). On April 17, 2018, Plaintiffs filed a notice of opposition to transfer. (Id.) (citing In re Nat'l Prescription Opiate Litig., MDL No. 2804, Doc. 1229 (Apr. 17, 2018 Not. of Opp'n)).

         On May 1, 2018, Plaintiffs moved to remand this action to state court arguing that CAFA's Local Controversy Exception applies.[4] (See Pls.' Mot. to Remand.) On May 2, 2018, Plaintiffs moved to vacate the JMPL's conditional transfer order. (Defs.' Opp'n Pls.' Mot. for Remand at 3) (citing See In re Nat'l Prescription Opiate Litig., MDL No. 2804, Doc. No. 1336 (May 2, 2018 Mot. to Vacate)). Responses to Plaintiffs' motion to vacate were due May 23, 2018, with a final decision from the JPML on transfer expected shortly thereafter. (Id.) (citation omitted). On May 15, 2018, Teva Defendants filed their opposition to Plaintiffs' Motion to Remand in which they argued, inter alia, that the Court should stay this action pending its transfer to the Opiate MDL. (See id.) On May 22, 2018, Plaintiffs filed their Reply asserting that the action should not be stayed, but should be remanded to the Philadelphia Court of Common Pleas of Philadelphia County. (See Pls.' Reply.)

         II. LEGAL STANDARD

         A party requesting a stay “must make out a clear case of hardship or inequity in being required to go forward, if there is even a fair possibility that the stay for which he prays will work damage to [someone] else.” Landis v. N. Am. Co., 299 U.S. 248, 255 (1936). “The power to stay is incidental to the power inherent in every court to dispose of cases so as to promote their fair and efficient adjudication.” United States v. Breyer, 41 F.3d 884, 893 (3d. 1994) (stating that “[a] stay is an extraordinary measure” requiring “compelling reasons for its issuance”). “The decision to stay proceedings pending an MDL transfer is within the Court's ‘broad powers to stay proceedings.'” Davis v. DePuy Orthopaedics, Inc., No. 11-5139, 2011 WL 5237563, at *1 (D.N.J. Nov. 2, 2011) (quoting Bechtel Corp. v. Local 215 Laborer's Int'l Union of N.A., 544 F.2d 1207, 1215 (3d Cir. 1976)); see also Robinson v. DePuy Orthopaedics, Inc., No. 3:12-03, 2012 WL 831650, at *2 (W.D. Va. Mar. 6, 2012) (“In fact, the court observes that the general rule is for federal courts to defer ruling on pending motions to remand in MDL litigation until after the [MDL Panel] has transferred the case.”) (citation omitted).

         In order to decide a motion to stay proceedings pending the resolution of another action in federal court, courts have considered the following three factors: “(1) the promotion of judicial economy; (2) the balance of harm to the parties; and (3) the duration of the requested stay.” Cirulli v. Bausch & Lomb, Inc., No. 08-4579, 2009 WL 545572, at *2 (E.D. Pa. Mar. 4, 2009) (quoting Ciolli v. Iravani, No. 08-2601, 2008 WL 4412053, at *2 (E.D. Pa. Sept. 23, 2008)). “The party requesting a stay bears the burden of showing that the circumstances justify an exercise of [the Court's discretion to issue a stay].” Nken v. Holder, 556 U.S. 418, 433-34 (2009).

         III. DISCUSSION

         Teva Defendants seek entry of a stay of this case in light of the conditional transfer order issued by the Opiate MDL Panel to help ensure uniform treatment of related issues, avoid piecemeal litigation, and conserve judicial resources. They argue that entering a stay “will allow the MDL court to resolve Plaintiffs' remand motion along with several other remand motions in actions likewise removed under CAFA” and “[t]he MDL court has stated that it will address remand motions in the coordinated proceeding.”[5] (Defs.' Opp'n Pls.' Mot. for Remand at 2.)

         Plaintiffs argue that a stay is “entirely inappropriate as Plaintiff's [sic] Motion to Remand involves the only class action brought by the municipalities of Pennsylvania against Pennsylvania Defendants in the Opiate Litigation which makes it uniquely different than any other potential remand motion before the MDL.” (Pls.' Reply at 1.) They also assert that “[a] delay in the proceedings would require the Plaintiffs to expend additional time and effort to proceed with this action resulting in substantial, unnecessary and undue prejudice.” (Id. at 4.) In weighing the competing interests presented here, we conclude that a stay is warranted in the instant matter because this action and the Opiate MDL involve common issues of fact, judicial economy would be promoted by a stay, the balance of potential harm to the parties weighs in favor of Teva Defendants, and the seemingly short duration of the requested stay would not substantially prejudice Plaintiffs.

         First, we find that entering the stay is likely to promote judicial efficiency and consistency in decision making, especially since Plaintiffs' Motion to Remand raises issues likely to arise in other cases pending in the Opiate MDL transferee court. In fact, as pointed out by Teva Defendants, two remand motions in other actions now pending in the Opiate MDL argue the specific question of whether remand is required under CAFA's Local Controversy Exception. See Penn. ex rel. Kane v. McGraw-Hill Cos., Inc., No. 13-605, 2013 WL 1397434, at *4 (M.D. Pa. Apr. 5, 2013) (“Courts often stay proceedings pending action by the JPML to preserve judicial resources and to ensure consistency in the disposition of like matters.”); Yearwood v. Johnson & Johnson, Inc., No. 12-1374, 2012 WL 2520865, at *4 (D. Md. June 27, 2012) (“Granting a stay to permit the MDL court to rule on the remand motion is especially appropriate where the remand motion raises issues likely ...


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