Hawaii ex rel. Louie v Bristol-Myers Squibb Co., 2014 WL 3427387 (D. Hawaii July 15, 2014)
In this action, a district court in Hawaii remanded a parens patriae action to state court finding that essential nature and effect of the proceeding as it appeared from the entire record demonstrated that the State of Hawaii was the real party in interest in this action.
The Attorney General of the State of Hawaii filed an action in the state court against the Bristol-Myers Squibb Company; Sanofi-Aventis U.S. LLC; Sanofi U.S. Services Inc., formerly known as Sanofi-Aventis U.S. Inc.; and Sanofi-Synthelabo Inc. The Attorney General brought the action exclusively under the law of the State of Hawaii for false, deceptive, and unfair marketing of the prescription drug Plavix. The defendants removed the action to the federal court based on the class action provision of CAFA and the False Claims Act. Interestingly, the defendants asserted CAFA’s class action provision for removal, and made no reference to the mass action provision. The Attorney General moved to remand.
Under CAFA, the term “class action” means any civil action filed under Rule 23, or similar state statute. The defendants attempted to invoke the class action provision of CAFA to remove the action, whereas, the only named plaintiff was the State of Hawaii and the State of Hawaii did not bring this action as a class action. The complaint, however, stated that the suit was a parens patriae action brought the Attorney General. A parens patriae is a doctrine which allows a state to bring a suit on behalf of its citizens when the state:
- alleges injury to a substantial portion of its population;
- articulates an interest separate from the interests of particular private parties; and
- expresses a quasi-sovereign interest.
A parens patriae suit resembles class actions only to the extent that they were all representative suits. But we know that not all representative suits are class actions. In an attempt to retain federal jurisdiction, the defendants contended that the Attorney General was required to bring the present parens patriae action pursuant to HRS § 480-14(b)–which requires the Attorney General of Hawaii to bring any suit for unfair and deceptive practices as a class action. Because the Attorney General did not bring this action under HRS § 480-14(b), the defendants contended that this was not a parens patriae action.
The District Court noted that in Villon v. Marriot Hotel Services, Inc., 130 Haw. 130 (Haw. 2013), the Hawaii Supreme Court found that § 480 was not an exclusivity provision that precludes enforcement of violations of unfair and deceptive practices through another chapter of the Hawaii Revised Statutes. In other words, the Hawaii Supreme Court held that remedies available under § 480 were not exclusive, and the Attorney General could bring a representative action under other provisions as well.
The District Court observed that HRS § 480-14(b) expressly permits the Attorney General to bring a parens patriae action to recover damages on behalf of Hawaii consumers, however, it was not the exclusive means for the Attorney General to bring an unfair or deceptive practices claim. The District Court noted that in Hawaii ex rel. v. J.P. Morgan Chase & Co., 907 F. Supp. 2d (D. Haw. 2012), the court considered a nearly identical argument, and found that § 480-14(b) did provide the Attorney General with the authority to bring a class action on behalf of the consumers.
In this case, the Attorney General cited to HRS §§ 480-2(d), 660-10, and 661-21 as the authority upon which he filed this civil action. In addition, the complaint did not seek relief on behalf of the consumers. Accordingly, the District Court ruled that this suit was not a class action.
The defendants next argued that the State was not the real party in interest in this case, and claimed that the individual consumers in the State were citizens of Hawaii for diversity purposes. The District Court observed that, here, the suit was filed on behalf of the State’s interest, and the State had a concrete interest in protecting its citizens and economy from false, unfair and deceptive practices related to the prescription drugs.
Accordingly, the District Court concluded that the essential nature and effect of the proceeding as it appeared from the entire record demonstrated that the State of Hawaii was the real party in interest in this action. Similarly, the District Court found that there was no federal jurisdiction pursuant to the False Claims Act, and remanded the case to the state court. The District Court remanded the case to state court. –JR