Asahi Kasei Pharma Corporation v. Actelion, 2009 WL 801555 (N.D. CA March 25, 2009)

 Check out http://failblog.org/ for great failures of communication, because this case probably should be included on the list of failure to communicate.  Here are some of our favorite examples of failure to communicate.

The Plaintiff, a Japanese pharmaceutical and medical device manufacturer named Asahi, entered into a license agreement with CoTherix for the development and marketing of a new drug discovered by Asahi for the treatment of pulmonary hypertension and angina. Asahi alleges the  defendant, Actelion, interfered with or in the alternative breached a license agreement between CoTherix and Asahi in order to preserve its monopoly over the perilous angina drug market. 

Asahi alleges Actelion bought out CoTherix by paying a “massive premium” and thereby eliminating Asahi’s drug, Fasudil, from the competition. In its reasoning for the purchase and subsequent halt of development of the drug, Asahi states it was told the work on the drug was being stopped for generic “inter alia business reasons.” 

Way to be specific…fail. 

Furthermore Asahi alleges that the purpose of the takeover was a diabolic plan to prevent the growth of Fasudil and instead foster the exploitation of synergies between Actelion’s two marketable drugs. As a result, Asahi has been unable to find a new development partner, and what’s worse is no one will invite it to sleepovers anymore as well.

Asahi filed suit and the defendant removed to federal court contending that Asahi’s False Advertising and Unfair Competition claims are brought on behalf of a nationwide class of consumers and belong in federal court. 

The plaintiff asserts that CAFA is not a basis for removal because the action is not a representative one and claims are brought solely on behalf of Asahi. The plaintiff argues that the complaint’s reference to “consumers” does not convert the complaint into a class or representative action, and emphasizes the fact that the complaint only seeks relief on behalf of Asahi. 

The Court agrees with plaintiff that there is no removal jurisdiction under CAFA. The defendant does not cite any authority for the claims, (citation fail) which are expressly brought on behalf of Asahi and seek relief only for Asahi. Simply because the complaint alleges a harm to consumers, does not transform the claim into one of a class or representative action. 

The defendant also contends that the plaintiff’s claims arise under federal law because they implicitly allege violations of the federal Food, Drug and Cosmetic Act, 21 U.S.C. § 301. But once again and to no one’s surprise, this is a fail. To determine whether the plaintiff’s state law claims actually arise under federal law, the Court must determine whether the state law claim necessarily raises a federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities. In this case, Asahi maintains that the complaint’s references to the FDCA only serve as evidence of the defendant’s liability but do not function as an essential element to the claim. The Court agrees. 

Finally…(will they ever stop?) the defendant asserts that removal is proper because the FDCA completely pre-empts plaintiff’s other claims. Pre-emption fail. The Supreme Court has explained that complete preemption, which is a basis for removal, occurs when the “pre-emptive force of a statute is so extraordinary that it converts an ordinary state complaint into one stating a federal claim for purposes of the well-pleaded complaint rule.” However, a case may not be removed to federal court on the basis of a federal defense, including pre-emption, even if the defense is anticipated in the plaintiff’s complaint. 

The defendant then confuses itself and the Court by asserting that the FDCA completely pre-empts Asahi’s claims and also that Actelion does not argue that the FDCA completely pre-empts all state law claims. Self-confusion fail. The defendant then backs-up this assertion with no actual authority, law or argument. Also a fail. The Supreme Court rarely, if ever, finds that a federal statute wholly displaces a state law cause of action. The plaintiffs point this out through a huge stream of case law. Although the defendant disguises its argument as one of complete preemption, in actuality its contention is one of defensive pre-emption. But the defendant can go ahead and just raise that defense in state court, where this action belongs.

For the foregoing reasons and this gigantic fail the court remands this action to the Superior Court of San Mateo for lack of jurisdiction.

By: Rachel Flarity