State of Alabama v. Abbott Laboratories, Inc. et al

BRIEF/MEMORANDUM in Support re MOTION to Remand to State Court

M.D. Ala.October 20, 2006

IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF ALABAMA NORTHERN DIVISION STATE OF ALABAMA, * * Plaintiff, * * v. * Civil Action No.: 2:06cv00920-MHT * ABBOTT LABORATORIES, INC, * et al., * * Defendants. * PLAINTIFF STATE OF ALABAMA’S BRIEF IN SUPPORT OF MOTION TO REMAND Plaintiff, the State of Alabama (“the State”), submits the following brief in support of its motion to remand this case to the Circuit Court of Montgomery County, Alabama. As shown herein, this case should be remanded to the Circuit Court of Montgomery County, Alabama because the removal is untimely and because this Court lacks subject matter jurisdiction over the action. Defendants’ removal – the second one in this action – is sought solely for the purpose of delay and obfuscation. Upon remand, an assessment of attorney fees and costs should be imposed against Defendants and in favor of the State pursuant to 28 U.S.C. § 1447(c). Case 2:06-cv-00920-MHT-VPM Document 129 Filed 10/20/2006 Page 1 of 34 2 NATURE OF THE STATE ACTION The State’s complaint was filed on January 26, 2005, over twenty (20) months ago. The complaint asserted only state causes of action for fraudulent misrepresentation, wantonness, and unjust enrichment. The complaint was amended on April 13, 2005, adding another state cause of action for fraudulent suppression and supplementing the list of specifically named drugs at issue. The State’s claims arise out of the Defendants’ fraudulent reporting of prescription drug prices to industry reporting services, which prices are relied upon and used by the State to provide Medicaid reimbursement to medical or pharmacy providers who have provided drugs to Medicaid patients. All Defendants filed motions to dismiss, and while those motions were pending, Defendants removed this action to this Court on or about July 13, 2005. In that first removal, Defendants contended that federal question jurisdiction existed pursuant to Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308 (2005), and that their removal was timely because the Grable decision constituted an “other paper” under 28 U.S.C. § 1446(b). This Court rejected Defendants’ argument and remanded this case to state court, where it belongs, on August 11, 2005. In its Order remanding this action, the Court held as follows: After careful consideration of the state-law claims presented in this case, the court does not believe that the claims “necessarily raise a stated federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities.” State of Alabama v. Abbott Laboratories, Inc., et al., No. 2:05cv647-T (M.D. Ala. August 11, 2005)(quoting Grable & Sons Metal Prods., Inc., 545 U.S. at 314). Case 2:06-cv-00920-MHT-VPM Document 129 Filed 10/20/2006 Page 2 of 34 3 The State filed a second amended complaint on January 11, 2006, further supplementing the list of subject drugs. The second amended complaint recites, just as the original and first amended complaints did, that the State’s claims “involve claims arising exclusively under Alabama law” (Second Amended Complaint, ¶ 95) and that “no federal claims are being asserted in this case.” (Second Amended Complaint, p. 32 n.2). Defendants concede that the Second Amended Complaint “did not contain grounds that would have made [this case] removable.” See Notice of Removal, ¶ 29. Since Defendants’ first unsuccessful and unfounded removal attempt last year, the state trial court has moved this case forward toward prompt resolution. Multiple substantive and discovery orders have been entered, two special discovery masters have been appointed, written discovery has been exchanged between the parties, and two depositions have been taken and others scheduled. Indeed, the state trial court has scheduled trial to begin on November 26, 2007, just over one year from now. This second removal is yet another unfounded attempt by Defendants to delay this matter, obfuscate the progress furthered in the Alabama trial court, and escape the State’s selected forum. Defendants do not seek this Court’s venue for disposition of this case; rather, Defendants are attempting to transfer this case to multi-district litigation in Boston, Massachusetts, with cases that encompass claims and issues not asserted in the State of Alabama’s case. That transfer would impede the resolution of this case and work a substantial hardship on the State of Alabama. The State of Alabama, as a sovereign and the master of its own claims, is entitled to have its lawsuit, based purely on state law Case 2:06-cv-00920-MHT-VPM Document 129 Filed 10/20/2006 Page 3 of 34 4 claims, heard in its original chosen forum – the Circuit Court of Montgomery County, Alabama. ARGUMENT This lawsuit has been improperly removed to this Court, for a second time, and should be remanded to the Circuit Court of Montgomery County, Alabama, where it was originally filed. Contrary to the assertions in Defendants’ removal petition, this Court lacks subject matter jurisdiction over the action because the federal False Claims Act does not confer original federal jurisdiction over state claims in state cases. This Court need not even reach that jurisdictional argument, however, because other readily apparent procedural deficiencies dictate remand. I. Defendants Bear a Significant Burden on Removal. The standard for removal to federal court is stringent. The defendant, as the removing party, bears the significant burden of establishing federal jurisdiction over the litigation. See Triggs v. John Crump Toyota, Inc., 154 F.3d 1284, 1287 n.4 (11th Cir. 1998); Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir. 1994). “Removal is a statutory privilege, rather than a right, and the removing party must comply with the procedural requirements mandated in the statute when desirous of availing the privilege.” Jerrell v. Kardoes Rubber Co., Inc., 348 F. Supp. 2d 1278, 1283 (M.D. Ala. 2004)(citing Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 104 (1941)). Once a case has been removed to federal court, the non-removing party may move for remand which will be granted if “it appears that the district court lacks subject matter jurisdiction.” 28 U.S.C. § 1447(c). Remand is also warranted when the removing party has failed to comply with Case 2:06-cv-00920-MHT-VPM Document 129 Filed 10/20/2006 Page 4 of 34 5 the statutory requirements for removal. See, e.g., Brown v. Demco, Inc., 792 F.2d 478, 482 (5th Cir. 1986)(ordering remand due to untimeliness of removal); Adams v. Charter Communications VII, LLC, 356 F. Supp. 2d 1268, 1273 (M.D. Ala. 2005)(granting motion to remand where removal was untimely); Jerrell, 348 F. Supp. 2d at 1283 (granting motion to remand where all Defendants failed to timely consent to removal). Because removal jurisdiction raises significant federalism concerns, “removal statutes are construed narrowly; where plaintiff and defendant clash about jurisdiction, uncertainties are resolved in favor of remand.” Burns, 31 F.3d at 1095; Univ. of S. Ala. v. Amer. Tobacco Co., 168 F.3d 405, 411 (11th Cir. 1999). Indeed, the “letter of the law is clear and it requires strict construction of the language of the [removal] statute” and “all doubts about removal must be resolved in favor of remand.” Jerrell, 348 F. Supp. 2d at 1281, 1283; McCaslin v. Blue Cross and Blue Shield of Ala., 779 F. Supp. 1312, 1314 (N.D. Ala. 1991). In this district, the Court has explained as follows: As a general principle, the removal statutes are to be construed narrowly. Thus, even though § 1446’s time requirement is not jurisdictional, the time requirement is mandatory and must be strictly applied. Timely objection to a late petition for removal will therefore result in remand. Webster v. Dow United Tech. Composite Prods., Inc., 925 F. Supp. 727, 729 (M.D. Ala. 1996)(internal citations omitted); Adams, 356 F. Supp. 2d at 1272. In this case, remand is warranted both because of procedural defects due to Defendants’ untimely filing of the notice of removal and because this Court does not Case 2:06-cv-00920-MHT-VPM Document 129 Filed 10/20/2006 Page 5 of 34 6 have original jurisdiction over the State of Alabama’s claims, and therefore, this Court lacks subject matter jurisdiction over the case. II. Defendants’ Removal Is Untimely And Procedurally Improper. Defendant Dey, L.P., filed its Notice of Removal on October 11, 2006, relying on 28 U.S.C. § 1446(b). Dey contends that the unsealing in Massachusetts of a federal qui tam action against it, which is based on similar allegations as the State’s action, constitutes a “pleading, order, or other paper” from which Dey was first able to ascertain that the Alabama case had become removable. See Notice of Removal, ¶ 38. Dey also suggests that the state law claims against the other 72 Defendants fall within this Court’s supplemental jurisdiction, 28 U.S.C. § 1367.1 This second removal is improper and unsupportable, just as the first removal was. A. The unsealing of a federal qui tam action to which the State is not a party is not an “amended pleading, order, or other paper” pursuant to 28 U.S.C. § 1446(b) upon which removal can be based. Federal law limits the period in which a defendant may exercise his removal right from state to federal court. The second paragraph of 28 U.S.C. § 1446(b), under which Dey attempts to travel,2 provides as follows: If the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable . . . . 1 However, as shown below, at least one of the other Defendants did not properly consent to the removal, thereby negating the unanimity among defendants required in this Circuit. 2 Dey concedes, as it must, that the new basis for removal set forth in its Notice of Removal was not raised within 30 days of the State of Alabama’s Second Amended Complaint. See Notice of Removal, ¶¶ 22, 29. Case 2:06-cv-00920-MHT-VPM Document 129 Filed 10/20/2006 Page 6 of 34 7 Dey contends that its receipt of the unsealed federal qui tam action against it brought by the United States under the False Claims Act triggered the 30-day period for removal pursuant to 28 U.S.C. § 1446(b). See Notice of Removal, ¶ 38. Dey conspicuously avoids identifying whether it contends that the federal qui tam complaint is an “amended pleading,” a “motion,” an “order,” or an “other paper.” Nevertheless, it makes no difference what Dey contends because the plain language, legislative history, and case law interpreting section 1446(b) clearly establish that the statute applies only to an event occurring in the state court action being removed and resulting from a voluntary act of the plaintiff. Dey cites no legal authority to support its position, and there is none. 1. Section 1446(b) applies only to events occurring within the state court action being removed. a. The plain language of § 1446(b). The plain language of section 1446(b) makes clear that it applies only to events that occur within the state court action being removed. In Morsani v. Major League Baseball, 79 F. Supp. 2d 1331 (M.D. Fla. 1999), one of the leading cases interpreting § 1446(b), the district court examined numerous cases that addressed the issue and summarized the state of the law as follows: Many courts have examined and rejected the defendants’ argument that an order entered in another case may constitute an “order or other paper” pursuant to Section 1446(b). These courts interpret Section 1446(b) to refer only to “an amended pleading, motion, order or other paper” that arises within the case for which removal is sought. The plain language of the statute, referring to the “receipt by the defendant, through service or otherwise,” implies the occurrence of an event within the proceeding itself; defendants do not in the ordinary sense “receive” decisions entered in unrelated cases. Accordingly, the courts consistently hold that publication of an order on a subject that might affect the ability to remove an unrelated Case 2:06-cv-00920-MHT-VPM Document 129 Filed 10/20/2006 Page 7 of 34 8 state court suit does not qualify as an “order or other paper” for the purposes of Section 1446(b). Id. at 1333 (omitting footnote that lists the many decisions upon which it relied). The same conclusion was reached in Kocaj v. Chrysler Corp., 794 F. Supp. 234 (E.D. Mich. 1992): Simply put, a plain reading of the second paragraph of § 1446(b) elicits the conclusion that the term “other paper” means a paper in the state court action that does not constitute “an amended pleading, motion, [or] order.” As the court in Holiday [v. Travelers Ins. Co., 666 F. Supp. 1286 (W.D. Ark. 1987)] aptly observed, such “other paper” could, for example, be a plaintiff’s response to a summary judgment motion, answers to interrogatories, or statements of a plaintiff. Holiday at 1290 (citing cases). Defendant’s interpretation of “other paper,” broadly construing such term to include even a decision in an unrelated action, ignores the preceeding language in § 1446(b) – “within thirty days after receipt by the defendant, through service or otherwise” (emphasis added) -- which language plainly refers to items served or otherwise given to a defendant in a state court case. Id. at 237. This construction of the statute is widespread and has been adopted by many district courts. See Rose v. Beverly Health & Rehab. Servs., Inc., 2006 WL 2067060, at *5 (E.D. Cal. July 22, 2006) (“the phrase ‘other paper’ has been interpreted as ‘documents generated within the state court litigation’”); Burns v. Prudential Sec., Inc., 2006 WL 1932310, at *4 (N.D. Ohio July 10, 2006) (“A court decision in an unrelated case does not constitute a ‘motion, order, or other paper’ for § 1446(b) purposes and does not, therefore, create a new 30-day period during which a defendant can remove a case.”); Elm v. Soo Line R.R., 2006 WL 1426594, at *2 (D. Minn. May 22, 2006) (“courts have generally held that ‘other paper’ refers ‘solely to documents generated within the Case 2:06-cv-00920-MHT-VPM Document 129 Filed 10/20/2006 Page 8 of 34 9 state court litigation itself’”); Craft v. Philip Morris Co., 2006 WL 744415, at *6 (E.D. Mo. Mar. 17, 2006) (“the most logical interpretation of the plain language of the statute, ‘amended pleading, motion, order or other paper’ is that ‘order or other paper’ refers to only records in the state case”); Black v. Brown & Williamson Tobacco Corp., 2006 WL 744414, at *6 (E.D. Mo. Mar. 17, 2006) (same); Allen v. Monsanto Co., 396 F. Supp. 2d 728, 731 (S.D. W. Va. 2005) (“courts universally hold that a court decision in separate, unrelated case does not constitute ‘other paper’ for removal purposes”); Klink v. Metavante Corp., 2002 WL 31962610, at *2 n.1 (E.D. Mich. Dec. 16, 2002); Sclafani v. Ins. Co. of N. Am., 671 F. Supp. 364, 365 (D. Md. 1987) (Section 1446(b) “‘relates only to papers filed in the action itself which alter or clarify the stated claim so as to reveal for the first time that a federal cause of action is stated’”)(quoting Avco Corp. v. Int’l Union, 287 F. Supp. 132 (D. Conn. 1968); Lozano v. GPE Controls, 859 F. Supp. 1036, 1038 (S.D. Tex. 1994)(the term “other paper” refers to papers generated within the specific state proceeding to be removed and not other unrelated judicial opinions that might suggest removability); Johansen v. Employee Benefit Claims, Inc., 668 F. Supp. 1294, 1296 (D. Minn. 1987) (“every court which has faced the issue present in this case has construed the phrase ‘or other paper’ as referring solely to documents generated within the state court litigation itself”); Avco Corp. v. Int’l Union, 287 F. Supp. 132, 133 (D. Conn. 1968)(“order or other paper” refers only to papers filed in proceeding itself, not to unrelated Supreme Court opinion); see also O’Bryan v. Chandler, 496 F.2d 403, 412 (10th Cir. 1974)(noting Avco was rightly decided). Case 2:06-cv-00920-MHT-VPM Document 129 Filed 10/20/2006 Page 9 of 34 10 b. The legislative history of § 1446(b). The legislative history of 28 U.S.C. § 1446(b) also supports the conclusion that the statute is limited to events occurring in the state court action that is being removed. McCormick v. Excel Corp., 413 F. Supp. 2d 967 (E.D. Wis. 2006), contains the most recent explanation of the legislative history: The legislative history of § 1446(b) also supports an inference that Congress intended to limit order and other paper to documents in the pending case. This is so because prior to 1949, when Congress amended § 1446(b), the Supreme Court had developed case law interpreting Powers v. Chesapeake & Ohio Ry. Co., 169 U.S. 92, 18 S. Ct. 264, 42 L. Ed. 673 (1898), as standing for the proposition that a case that became eligible for removal after the initial complaint could be removed only as the result of a voluntary act by the plaintiff. See Adam C. Clainton, Uncertainty in Federal Removal Procedure: The Riddle of the “Other Paper”, 71 Def. Couns. J. 388, 393, 401 (Oct. 2004) (stating that although 1446(b) does not mention a “voluntariness” requirement, courts have read such limitation into it in light of the House report stating that the amendment was “declaratory of the existing rule laid down by” such decisions as Powers ). Although courts have criticized the so-called “voluntary/involuntary” rule as overly formalistic, see Lyon v. Ill. Cent. Ry. Co., 228 F. Supp. 810, 811 (S.D. Miss. 1964), the circuit courts have generally followed it, see e.g., Poulos v. Naas Foods, Inc., 959 F.2d 69, 71-72 (7th Cir. 1992). It may reasonably be inferred from Congress’s endorsement of the rule that Congress also intended to limit order and other paper to documents in the case being removed. See 17 No. 2 Fed. Litigator, 30 (Feb. 2002) (indicating that the voluntariness requirement leads to the conclusion that order or other paper refers only to documents to the case being removed). A plaintiff can only generate documents in a case that is pending. Id. at 971. Because the federal government’s unsealing and service upon Dey of the federal qui tam complaint in Massachusetts is not an event that occurred within the Alabama state action, it cannot serve as the basis for removal of this action. Case 2:06-cv-00920-MHT-VPM Document 129 Filed 10/20/2006 Page 10 of 34 11 2. Section 1446(b) applies only to voluntary acts of the plaintiff. In addition to being limited to events that occur within the state court action from which removal is sought, 28 U.SC. § 1446(b) is also limited to voluntary acts of the plaintiff. 16 James Wm. Moore et al., Moore’s Federal Practice §107.30[3][e] (3d ed. 2005) (“[T]o constitute ‘other paper,’ the paper must result from the voluntary act of a plaintiff and give the defendant notice of the changed circumstances that now support federal jurisdiction.”)(emphasis added); see also Addo v. Globe Life & Acc. Ins. Co., 230 F.3d 759, 762 (5th Cir. 2000) (“‘other paper’ must result from the voluntary act of a plaintiff which gives the defendant notice of the changed circumstances which now support federal jurisdiction.”)(citing SWS Erectors, Inc. v. Infax, Inc., 72 F.3d 489, 494 (5th Cir. 1996)); California v. Keating, 986 F.2d 346, 348 (9th Cir. 1993); Morsani, 79 F. Supp. 2d at 1333 n.5 (“In both federal question and diversity cases . . . Section 1446(b) restricts defendants from removing most cases when the circumstance potentially allowing removal arises through no consequence of the plaintiff’s actions”); Dowd v. Alliance Mortgage Co., 339 F. Supp. 2d 452, 455 (E.D.N.Y. 2004)(“involuntary changes in a case do not create removability if the plaintiff’s complaint was not removable”); Henderson v. City of Chattanooga, 2002 WL 32060139, at *5 (E.D. Tenn. Mar. 15, 2002) (“A state court case that initially is non-removable cannot subsequently become removable or be transformed into a removable case unless a change occurs that makes it removable as a result of the plaintiff’s voluntary act.”); Stauffer v. Citizens Alliance Educ. Found., 2001 WL 34039481, at *2 (D. Or. Dec. 14, 2001)(rejecting contention that notice from Secretary of State constituted “other paper”); cf., e.g., Shields v. Washington Nat. Case 2:06-cv-00920-MHT-VPM Document 129 Filed 10/20/2006 Page 11 of 34 12 Ins. Co., 375 F. Supp. 2d 1346, 1349 (M.D. Ala. 2005)(deposition testimony of plaintiff constituted "other paper" under 28 U.S.C. § 1446(b) in determining timeliness of removal). “This result is consistent with the well-established ‘voluntary/involuntary rule’ applied to diversity cases removed pursuant to Section 1446(b). Under this rule, a state court case that is initially non-removable, but which subsequently becomes removable, may nevertheless not be removed unless the change that makes the case removable is the result of the plaintiff’s voluntary act. In both federal question and diversity cases, therefore, Section 1446(b) restricts defendants from removing most cases when the circumstance potentially allowing removal arises through no consequence of the plaintiff’s actions.” Morsani, 79 F. Supp. 2d at 1333 n.5 (internal citations omitted). Dey’s argument also contravenes the “well-pleaded complaint rule” which provides that “[a] case may be removed based on federal question jurisdiction only when the plaintiff’s statement of his own cause of action shows that it is based on federal law.” Blab T.V. of Mobile, Inc. v. Comcast Cable Communications, Inc., 182 F.3d 851, 854 (11th Cir. 1999)(emphasis added)(citing Louisville & Nashville R.R. v. Mottley, 211 U.S. 149, 152 (1908)). The State, as plaintiff, is “’master of the claim’ and may prevent removal by choosing not to plead an available federal claim.” Id. Here, the State has done absolutely nothing to alter the status of this case. It has not filed or submitted an amended pleading, motion, or other paper making this case removable. Further, no order has been entered in this action causing it to become removable. The State’s complaint exclusively alleges four state law claims, and this Court has previously held that no federal issues exist. Case 2:06-cv-00920-MHT-VPM Document 129 Filed 10/20/2006 Page 12 of 34 13 In sum, because the service of the unsealed federal qui tam complaint upon Dey was not an action by the State of Alabama (voluntary or otherwise), it is not an event that falls within 28 U.S.C. § 1446(b). 3. Dey and the other defendants have known that § 1446(b) does not support removal in this instance. This is not the first time that Dey and the other defendants have argued that an event external to a state Attorney General AWP case occurring more than 30 days after service of the complaint re-starts the 30-day removal clock pursuant to 28 U.S.C. § 1446(b). In July 2005, the Defendants removed this case and several other state Attorney General AWP cases, asserting that the Supreme Court’s decision in Grable & Sons Metal Prods., Inc. v. Darue, 545 U.S. 308 (2005), changed the law of federal question jurisdiction and constituted an “order or other paper” within the meaning of Section 1446(b). The State of Alabama, as well as other states at issue, filed motions to remand, arguing, among other things, that an intervening Supreme Court decision did not constitute an “order or other paper” pursuant to Section 1446(b). While this Court did not specifically address this issue in its order, it impliedly rejected Dey’s position by ordering remand. Moreover, every other federal court that did address the issue expressly rejected Defendants’ argument, including the federal court in Boston to which Defendants seek to transfer this action. See Minnesota v. Pharmacia Corp., No. 05-1394, at 4-5 (D. Minn. Oct. 24, 2005) (attached as Exhibit A hereto); Pennsylvania v. Tap Pharm. Prods., Inc., et al., 415 F. Supp. 2d 516, 526-27 (E.D. Pa. 2005); Wisconsin v. Abbott Labs., Inc., et al., 390 F. Supp. 2d 815, 824-25 (W.D. Wis. 2005); In re Pharm. Case 2:06-cv-00920-MHT-VPM Document 129 Filed 10/20/2006 Page 13 of 34 14 Indus. Average Wholesale Price Litig., 431 F. Supp. 2d 98, 109 (D. Mass. 2006). Defendants’ reassertion in the same case of a baseless and unsupportable position requires remand and an award of attorney fees.3 B. Applying Dey’s theory, the unsealing of a similar federal qui tam action against Defendant Abbott Laboratories on May 26, 2006 makes Dey’s removal untimely. Under Dey’s “other paper” theory (which, as explained above, is completely untenable), the removal was untimely and otherwise procedurally improper. Section 1446(b) requires removal “within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may be first ascertained that the case is one which is or has become removable.” Applying Dey’s logic (however faulty) to the circumstances at hand, this case was removable at least 3½ months ago when the United States District Court for the Southern District of Florida unsealed and served on Abbott Laboratories, Inc. (“Abbott”), on May 26, 2006, a complaint under the federal False Claims Act, making the same allegations against Abbott which are made against Dey in the Massachusetts federal qui tam action. (Compare Exhibit B attached hereto with Exhibit A to the Notice of Removal.) Both Dey and Abbott are defendants in the underlying Alabama state court case. If Dey had a right to remove (which the State denies) based upon the unsealing and service of the federal qui tam action against Dey, then Abbott likewise had a right to 3 This conduct warrants an assessment of attorney fees and costs against Defendants, pursuant to 28 U.S.C. 1447(c), for this improper removal, as discussed more fully below. Case 2:06-cv-00920-MHT-VPM Document 129 Filed 10/20/2006 Page 14 of 34 15 remove this case to federal court when the federal qui tam action in Florida was unsealed and served on Abbott on May 26, 2006. The federal qui tam claims against Dey are identical to the claims by the United States against Abbott which were made public on or before May 26, 2006. (See Exhibit C attached hereto, Department of Justice Press Release dated May 18, 2006). Dey takes the position in its Notice of Removal (¶5) and its October 12, 2006 letter to Montgomery County Circuit Judge Charles Price (see Exhibit D attached hereto) that the existence of a federal qui tam action alleging the same transactions which are at issue in the state court action creates federal jurisdiction. Therefore, according to Dey’s theory, federal question jurisdiction existed at least as early as the filing and unsealing of the United States’ False Claims Act complaint against Abbott in the Florida federal court. Applying Dey’s argument, Abbott had the right to remove the Alabama case on May 26, 2006, allowing Dey to join in the removal.4 Thus, Dey’s notice of removal filed on October 11, 2006 is untimely, having been filed more than 30 days after Abbott was served and Dey was otherwise made aware of the public filing of the federal False Claims Act complaint against Abbott. Moreover, Abbott’s joinder in the instant removal by Dey is untimely and ineffective because Abbott itself could have (again under Dey’s theory) filed a notice of removal as early as May 26, 2006. Indeed, Abbott waived its right to removal, which also now precludes other defendants from seeking removal. See, e.g., Estate of Krasnow 4 Under this theory, the other state AWP cases where Abbott and Dey are co-defendants – including those pending in Illinois, Kentucky, Mississippi, Ohio, Pennsylvania and Wisconsin – were also removable on that date. Case 2:06-cv-00920-MHT-VPM Document 129 Filed 10/20/2006 Page 15 of 34 16 v. Texaco, Inc., 773 F. Supp. 806, 809 (E.D. Va. 1991)(individual defendant’s waiver of right of removal constituted “constructive” waiver for all other co-defendants); Crocker v. A.B. Chance Co., 270 F. Supp. 618, 618-19 (S.D. Fla. 1967)(waiver by one defendant for failure to timely file a removal petition bars removal by subsequently joined defendants). Since Abbott waived its right to removal (again following Dey’s removal theory) and its joinder is untimely and ineffective, all defendants have not joined in or consented to the removal on a timely basis, and the case must be remanded on procedural grounds. See Russell Corp. v. Am. Home Assurance Co., 264 F.3d 1040, 1044 (11th Cir. 2001)(Eleventh Circuit follows the “rule of unanimity,” requiring that all defendants join in a removal petition or consent to removal in cases involving multiple defendants). C. All Defendants did not consent to the removal in accordance with Rule 11. Federal Rule of Civil Procedure 11 requires that “every pleading, written motion, and other papers shall be signed by at least one attorney of record in the attorney’s individual name . . .”. (emphasis added). The United States Supreme Court has interpreted Rule 11 as imposing a non-assignable duty of certification, recognizing that the role of Rule 11’s signature requirement and its potential sanctions “is to bring home to the individual signer his personal, non-delegable responsibility.” Pavelic & LeFlore v. Marvel Entm’t Group, 493 U.S. 120, 126 (1989). Courts, including the Middle District of Alabama, typically find that signatures by a third party on behalf of an attorney or party do not satisfy Rule 11’s certification requirements. See, e.g., Beard v. Lehman Bros. Holdings, Inc., 2006 WL 2661170 *3 (M.D. Ala. Sept. 15, 2006); see also Boyle v. Case 2:06-cv-00920-MHT-VPM Document 129 Filed 10/20/2006 Page 16 of 34 17 City of Liberty, 1993 WL 20177, at *4 (W.D. Mo. Jan. 29, 1993)(“If Rule 11 requires a personal signature of the attorney of record, then a signature on behalf that attorney is not enough.”); Kobleur v. Group Hosp. and Med. Servs., Inc., 787 F. Supp. 1444, 1453 (S.D. Ga. 1991)(lack of signature by attorney of record constituted violation of Rule 11 warranting sanctions). In this case, “David Martin,” an unidentified person not of record, signed the consent form for George W. Walker, III, Defendant Par Pharmaceutical, Inc.’s counsel of record. (See Exhibit E attached hereto). Mr. Walker did not personally sign the pleading, although his name and bar number are typed on it. Mr. Martin has never made an appearance in this case and is not identified as a lawyer with a bar number. Because no attorney of record for Par Pharmaceutical personally signed a consent to removal, Rule 11 has not been satisfied. Moreover, since 28 U.S.C. § 1446(a) specifically requires that the notice of removal be signed pursuant to Rule 11 and because consents must be timely filed within the same 30-day time period as the removal, this defect prevents compliance with the removal statute. The failure to comply with the Rule 11 requirement prevents successful joinder in the removal petition by Defendant Par Pharmaceutical, which is a substantial procedural defect. See Beard, 2006 WL 2661170, at *4-6; see also Russell Corp., 264 F.3d at 1044 (Eleventh Circuit requires unanimity among all defendants joining in a removal petition or consent to removal). The mere assertion by Dey in its removal petition that all Defendants consent to the removal fails to constitute sufficient joinder. Beard, 2006 WL 2661170, at *4; Newman v. Spectrum Stores, Inc., 109 F. Supp. 2d 1342, 1346 (M.D. Ala. 2000). “A Case 2:06-cv-00920-MHT-VPM Document 129 Filed 10/20/2006 Page 17 of 34 18 consent may not be implied, but rather, it must be express.” Jerrell v. Kardoes Rubber Co., Inc., 348 F. Supp. 2d 1278, 1282 (M.D. Ala. 2004). Federalism concerns compel this Court to strictly enforce removal procedures, and parties must meticulously comply with the requirements of a statute in order to avoid remand. See Beard, 2006 WL 2661170, at *2. Under our system of limited federal jurisdiction which respects the sovereignty of the state courts, this Court cannot disregard an evident procedural defect, even a trivial or inadvertent defect. Id. Because all Defendants did not file notice of their consent to removal within the 30-day time period which is mandated under 28 U.S.C. § 1446(b), remand is required. III. This Court Lacks Subject Matter Jurisdiction Over the Underlying Action. Remand of this action is required because there is no original federal jurisdiction – a necessity for removal – over the underlying state law claims. “Only state-court actions that originally could have been filed in federal court may be removed by the defendant. . . . The presence or absence of federal-question jurisdiction is governed by the ‘well- pleaded complaint rule,’ which provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff’s properly pleaded complaint. The rule makes the plaintiff the master of the claim; he or she may avoid federal jurisdiction by exclusive reliance on state law.” Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987)(internal citations omitted). Case 2:06-cv-00920-MHT-VPM Document 129 Filed 10/20/2006 Page 18 of 34 19 A. The federal False Claims Act does not confer original jurisdiction over the State’s claims. Dey contends that this Court has original jurisdiction over the Alabama action pursuant to 31 U.S.C. § 3732(b), a provision in the federal False Claims Act (“FCA”). That contention is incorrect. As demonstrated below, this Court does not have original jurisdiction over Alabama’s action. At most, section 3732(b) provides for supplemental jurisdiction over Alabama’s claims against Dey, but permits only the State, rather than Dey, to determine whether to bring these claims in federal court. Moreover, it is well- established that actions for which the district courts have only supplemental jurisdiction may not be removed. See, e.g., Syngeta Crop Prot., Inc. v. Henson, 537 U.S. 28, 34 (2002) (“Ancillary jurisdiction . . . cannot provide the original jurisdiction that petitioners must show in order to qualify for removal under § 1441.”); Ahearn v. Charter Township of Bloomfield, 100 F.3d 451, 456 (6th Cir. 1996) (supplemental jurisdiction statute is not a source of original subject-matter jurisdiction and case is not removable on basis of supplemental jurisdiction). Courts in the Eleventh Circuit are in accord. See, e.g., Darden v. Ford Consumer Fin. Co., Inc., 200 F.3d 753, 755 (11th Cir. 2000)(removal jurisdiction exists only when the district court would have had original jurisdiction over the action); Keene v. Auto Owners Ins. Co., 78 F. Supp. 2d 1270, 1273-74 (S.D. Ala. 1999)(holding that the supplemental jurisdiction statute cannot serve as an “independent source of removal jurisdiction”); Brown v. Prudential Ins. Co. of Am., 954 F. Supp. 1582, 1584 (S.D. Ga. 1997)(holding that supplemental jurisdiction does not provide the original jurisdiction necessary for removal under section 1441). Case 2:06-cv-00920-MHT-VPM Document 129 Filed 10/20/2006 Page 19 of 34 20 It is Dey’s burden, and a heavy one, to establish that this court has original jurisdiction over Alabama’s claims against Dey pursuant to 31 U.S.C. § 3732(b). That statute provides: The 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 section 3730. It is clear that this statute does not confer original jurisdiction over Alabama’s claims against Dey from the plain language of § 3732(b) as well as from the overall structure, legislative history of the False Claims Act, and case law. By its express terms, the statute does not provide a grant of original jurisdiction. Congress could have explicitly provided for original jurisdiction, as it has done in over 80 other statutes, but it did not. See, e.g., 15 U.S.C. § 6614(c)(1) (“the district courts of the United States shall have original jurisdiction of any Y2K action that is brought as a class action”); 9 U.S.C. § 203 (regarding enforcement of foreign arbitral awards, stating the “district courts of the United States … shall have original jurisdiction over such an action ….”); 5 U.S.C. § 9007 (regarding long-term care insurance, stating the “district courts of the United States have original jurisdiction of a [such] civil action or claim ….”); 12 U.S.C. § 1441a (a)(11) (“any civil action, suit, or proceeding to which the Thrift Depositor Protection Oversight Board is a party shall be deemed to arise under the laws of the United States, and the United States district courts shall have original jurisdiction.”). Case 2:06-cv-00920-MHT-VPM Document 129 Filed 10/20/2006 Page 20 of 34 21 The jurisdiction over state claims provided by section 3732(b) is supplemental jurisdiction. It operates like any other supplemental jurisdiction provision – it is entirely dependent on the existence of another claim for which there is original jurisdiction. Because the term “supplemental jurisdiction” was not coined until 1990, four years after 31 U.S.C. § 3732(b) was codified, it makes perfect sense that section 3732(b) only uses the term “jurisdiction.” The FCA, when read as a whole, clearly demonstrates that section 3732(b) merely provides for supplemental jurisdiction. Section 3732(b) is an exception to the general bar on intervention by all other parties except for the United States in a federal FCA action, permitting states and local governments to join or intervene in a federal FCA action when it grows out of the same transaction or occurrence as the state or local government claims. Under 31 U.S.C. § 3730(b)(5), only the United States “may intervene or bring a related action based on the facts underlying” the federal FCA action. Accordingly, the codification of 31 U.S.C. § 3732(b) provides a vehicle for a state to join a pending FCA action brought by the United States to recover state funds lost due to actions growing out of the same transaction or occurrence as the federal FCA claim. That is, section 3732(b) operates to avoid the need to answer questions about whether a State can (or need) be a qui tam relator in order to recover.4 Without section 3732(b), some courts have held, states would be barred from intervention. See United States ex rel. Long v. SCS Bus. & 4 See United States ex rel. Wisconsin v. Dean, 729 F.2d 1100 (7th Cir. 1984) (pre-1986 amendments case finding a State may not be a relator), superseded by statute; cf. Vermont Agency of Nat. Res. v. United States ex rel. Stevens, 529 U.S. 765, 787 n.18 (2000) (leaving open question whether a State is a “person” under the Federal False Claims Act for purposes of commencing suit). Case 2:06-cv-00920-MHT-VPM Document 129 Filed 10/20/2006 Page 21 of 34 22 Technical Inst., Inc., 173 F.3d 870, 880 (D.C. Cir. 1999) (“§ 3732(b) … authorizes permissive intervention by states for recovery of state funds (creating what is in effect an exception to § 3730(b)(5)’s apparent general bar on intervention by all other parties except for the United States)”). Thus, 31 U.S.C. § 3732(b) provides a means for a State or local government plaintiff to be the master of its own claim when there is a related pending federal FCA action. Dey has not cited, and the State has not located, a single case concluding that 31 U.S.C. § 3732(b) constitutes a basis of original federal subject matter jurisdiction. Rather, case law addressing 31 U.S.C. § 3732(b) supports the conclusion that it provides a method for State and local governments permissively to join a federal FCA action growing out of the same transaction or occurrence. The United States Circuit Court of Appeals for the District of Columbia Circuit found that “[t]he more obvious reading of § 3732(b), however, is that it authorizes permissive intervention by states for recovery of state funds (creating what is in effect an exception to § 3730(b)(5)’s apparent general bar on intervention by all other parties except for the United States).” SCS Bus. & Technical Inst., Inc., 173 F.3d at 880 (emphasis added, parenthetical in original); see United States ex rel. Stevens v. Vermont Agency of Nat. Res., 162 F.3d 195, 205 (2d Cir. 1998) (“another 1986 amendment, . . . permits the joinder, in an FCA suit, of related state-law claims where those claims are ‘for the recovery of funds paid by a State . . .’”) (emphasis added), overruled on other grounds, 529 U.S. 765 (2000); JOHN T. BOESE, CIVIL FALSE CLAIMS AND QUI TAM ACTIONS § 4.01[B], at 4-20 (2006) (“[T]his provision does not require the state to be a relator for jurisdiction to exist. Theoretically, a state could Case 2:06-cv-00920-MHT-VPM Document 129 Filed 10/20/2006 Page 22 of 34 23 intervene in a federal False Claims Act suit to assert its own damages, and the Long court concluded that this type of permissive intervention is the more obvious interpretation of Section 3732(b).”); see also United States v. Sequel Contractors, Inc., 402 F. Supp. 2d. 1142, 1148-49 (C.D. Cal. 2005) (permitting Orange County, California to join its claims under the California False Claims Act with a federal FCA action under both 31 U.S.C. § 3732(b) and the general federal supplemental jurisdiction statute); United States ex rel. LaCorte v. Merck & Co., Inc., 2004 WL 595074, at *7 (E.D. La. 2004) (permitting the State of Louisiana to intervene in a federal FCA case under 31 U.S.C. § 3732(b) to pursue claims under Louisiana state law). Furthermore, the legislative history of section 3732(b) makes clear that Congress intended for this provision to enhance the options of states, not restrict them. Section 3732(b) was added by the 1986 Amendments to the FCA at the urging of the National Association of State Attorneys General (“NAAG”). As the Senate Report accompanying the 1986 Amendments provides: And finally, in response to comments from the National Association of Attorneys General, the subcommittee adopted a provision allowing State and local governments to join State law actions with False Claims Act actions brought in Federal district court if such actions grow out of the same transaction or occurrence. S. Rep. No 345, 99th Cong., 2d Sess., at 16 (1986), reprinted in 1986 U.S.C.C.A.N. 5266, 5281 (emphasis added). Thus, the purpose of section 3732(b) was to permit, not require, states and local governments to join pending federal FCA actions growing out of the same transaction or occurrence. See SCS Bus. & Technical Inst., Inc., 173 F.3d at 880 (Section 3732(b) “authorizes permissive intervention by states for recovery of state Case 2:06-cv-00920-MHT-VPM Document 129 Filed 10/20/2006 Page 23 of 34 24 funds”) (emphasis added). It would belie common sense to conclude that NAAG urged Congress to enact a statute stripping states of their ability to bring state law claims in state court and requiring all state law actions to be brought in federal court, or – as Dey contends here – permit a defendant to drag a case alleging purely state law claims out of state court when there happens to be a pending federal FCA action growing out of an allegedly similar transaction or occurrence. Indeed, it makes little sense that Congress would take such a drastic step to turn over control of the choice of forum to a defendant without making any mention of this purpose. Dey’s argument is that Congress engaged in a drastic expansion of federal jurisdiction over traditional state actions and intended to add enormous burdens to federal courts and the United States Department of Justice (which, under Dey’s theory, would have to deal with any and all similar state complaints anytime a federal FCA action is filed) – all without a single statement or indication that this is what Congress intended. Such an argument is clearly without merit. Section 3732(b) was not meant to tread on the states’ sovereignty in choosing the forum in which to bring their state law claims. Rather, it was meant to broaden their choices. When a state or local government desires to pursue an action arising from the same transaction or occurrence as a pending federal FCA action, section 3732(b) provides the option of choosing a federal forum to State and local governments, not to defendants. Moreover, nothing in the FCA supports Dey’s contention that Alabama’s action and the federal qui tam action “should be litigated in a single forum.” See Notice of Removal, ¶ 40. For this proposition, Dey relies on 31 U.S.C. § 3730(b)(5), which states Case 2:06-cv-00920-MHT-VPM Document 129 Filed 10/20/2006 Page 24 of 34 25 that “no person other than the Government may intervene or bring a related action based on the facts underlying the pending action” and states that Alabama’s action “must yield to the federal action in the event of any conflict.” Id., ¶ 42. Dey also relies on section 3732(b) with the mistaken reasoning that since that section grants federal jurisdiction over state actions related to a pending federal action, the section requires that the state claims be litigated in federal court. Neither argument supports Dey’s contention. First, section 3730(b)(5)’s ban does not apply to the states. This section is directed exclusively at actions by private parties (see 31 U.S.C. 3730(b), entitled “Actions by Private Parties”), and Dey cites no case that holds that a state may not bring a state court action to recover state funds because of a pending federal FCA action. To the extent that some courts have applied section 3730(b)(5) to states, these court have recognized that Section 3732(b) provides an exception to the bar, thus allowing states to join FCA suits. See SCS Bus. & Technical Inst., Inc., 173 F.3d at 880 (“§ 3732(b) … authorizes permissive intervention by states for recovery of state funds (creating what is in effect an exception to § 3730(b)(5)’s apparent general bar on intervention by all other parties except for the United States)”). Moreover, federal courts have rejected the maneuver of removing an action without original jurisdiction to “marry up” with a similar action pending in federal court, “even if the action which a defendant seeks to remove is related to another action over which the federal district court already has subject-matter jurisdiction, and even if removal would be efficient.” Ahearn, 100 F.3d at 456 (citations omitted). “An already- existing federal action cannot provide a mechanism for removal of a non-removable Case 2:06-cv-00920-MHT-VPM Document 129 Filed 10/20/2006 Page 25 of 34 26 state-court action.” In re Estate of Tabas, 879 F. Supp. 464, 467 (E.D. Pa. 1995); Ahearn, 100 F.3d at 456; Seabring Homes Corp v. T.R. Arnold & Assocs., 927 F. Supp. 1098, 1101 (N.D. Ind. 1995) (existence of a separate, but related, suit in federal court is not a basis for removal); N. Am. Van Lines, Inc. v. Coleman, 633 F. Supp. 632, 634 (N.D. Ill. 1986) (rejecting as “wholly fanciful,” the use of an already-existing federal action as a basis of removal under § 1441(c)). Indeed, even when a state law case is removed directly to the exact district where the similar federal case is pending, federal courts have rejected a defendant’s attempt to remove the case to join it with the federal action. In Tafuri v. Jeppson Sanderson Co., 25 F. Supp. 2d 1364, 1368–69 (S.D. Fla. 1998), the defendants asserted their case was properly removed because the federal district court had supplemental jurisdiction over the purely state law action, “based upon its original jurisdiction over related and consolidated cases in [a] multidistrict litigation.” See id. at 1365–66. Relying on the Ahearn and Tabas line of cases, the court concluded that “the pendency of numerous cases in . . . multidistrict litigation . . . , over which the Court has original jurisdiction, does not cure the absence of original jurisdiction in the [state law] suit” and remanded the case. Id. at 1368–69. Accordingly, neither efficiency nor joining a similar or identical action already existing in federal court, whether in the district removed to or elsewhere, can create original jurisdiction when it is lacking. Defendants’ assertions that these grounds in any way justify or buttress their removal of this case without original jurisdiction are entirely without merit. Case 2:06-cv-00920-MHT-VPM Document 129 Filed 10/20/2006 Page 26 of 34 27 B. This case is different from the cases currently pending in the multi-district litigation in federal court in Massachusetts. In support of their removal of this case, Dey refers to other cases filed throughout the country involving pharmaceutical pricing issues that have been removed and consolidated in the multi-district litigation in federal court in Boston. See Notice of Removal, ¶¶ 43, 45. The removal and consolidation of these cases do not support the removal of Alabama’s case. In most of those actions, federal question jurisdiction was based on the assertion of federal claims, such as RICO and breach of federal Medicaid Rebate agreements, or ERISA preemption principles. These cases are unlike Alabama’s case wherein only four exclusively state-law claims are asserted and federal claims are disclaimed. See Second Amended Complaint, ¶ 95 and p. 32 n.2 (“no federal claims are being asserted in this case.”) Consequently, the existence of federal multi-district litigation concerning pharmaceutical pricing issues should not influence this Court’s consideration of whether there is federal question jurisdiction over the State of Alabama’s claims. In re Estate of Tabas, 879 F. Supp. 464, 467 (E.D. Pa. 1995)(“An already existing federal action cannot provide a mechanism for removal of a non-removable state-court action.”). IV. Even Assuming that Federal Jurisdiction Exists with Respect to the State’s Claims Against Dey, This Court May Not Exercise Supplemental Jurisdiction Over the State’s Claims Against the Other Defendants. Defendants contend that because this Court has original jurisdiction over the State’s claims against Dey (which it does not), this Court has supplemental jurisdiction, pursuant to 28 U.S.C. § 1367(a), over the State’s claims against the other Defendants in Case 2:06-cv-00920-MHT-VPM Document 129 Filed 10/20/2006 Page 27 of 34 28 this action. In order for this Court to have supplemental jurisdiction over the State’s claims against the other Defendants, those claims must be “so related” to the State’s claims against Dey that they “form part of the same case or controversy.”5 See 28 U.S.C. § 1367(a). However, the right of a district court to assume supplemental jurisdiction over a related state claim under § 1367(a) only applies to cases originally filed in the district court and not to cases removed to the district court. Reneau v. Oakwood Mobile Homes, 952 F. Supp. 724, 728 (N.D. Ala. 1997); Muhammad v. City of Tuskegee, 76 F. Supp. 2d 1293, 1296 (M.D. Ala. 1999). Because the State’s case was not originally filed in federal court, this Court may not exercise supplemental jurisdiction over the State’s claims against the other Defendants.6 Reneau, 952 F. Supp. at 728 (“The mandatory strict construction of removal statutes absolutely prevents the removal of a state claim unless it is separate and independent from a federal claim”)(emphasis in original). V. Even Assuming that this Court Could Assume Supplemental Jurisdiction Over the State’s Claims Against the Other Defendants, the Court Should Remand those Claims to State Court. Even assuming for purposes of argument that 31 U.S.C. § 3732(b) confers original federal jurisdiction over the State’s claims against Dey (which it does not) and if (contrary to the rule of strict construction of removal statutes) section 1367(a) should be 5 It is interesting that Defendants assert this legal argument in their Notice of Removal when they so strenuously moved for severance of the claims in the state court proceeding, arguing, in part, that the claims against the various Defendants constituted independent claims not arising from the same transaction or same series of transactions. See, e.g., Aventis Pharmaceuticals, Inc.’s Motion to Sever or for a Separate Trial, filed September 15, 2006. Defendants have apparently abandoned that argument now, when they think it serves their purpose in seeking removal to federal court. 6 Of course, the Court need not even reach this issue because of the procedural deficiencies in Defendants’ removal and because no original federal jurisdiction exists over the State’s claims against Dey. Case 2:06-cv-00920-MHT-VPM Document 129 Filed 10/20/2006 Page 28 of 34 29 construed to allow all tag-along supplementary state claims to be removed, rather than only to be filed originally in the district court, then this Court has discretion to decline to exercise supplemental jurisdiction over the State’s claims against the remaining defendants. See Reneau, 952 F. Supp. at 728; Muhammad, 76 F. Supp. 2d at 1296. Pursuant to 28 U.S.C. § 1367(c): The district courts may decline to exercise supplemental jurisdiction over a claim under subsection (a) if -- (2) the claim substantially predominates over the claim or claims over which the district court has original jurisdiction; . . . or (4) in exceptional circumstances, there are other compelling reasons for declining jurisdiction. Here, the State’s claims against the remaining defendants substantially predominate over the State’s claims against Dey, as the defendants are trying to pile purely state law claims onto a single federal FCA complaint against Dey. In this case, there are 72 named defendants other than Dey, and by sheer numbers alone, the State’s claims against those defendants substantially predominate over the claims against Dey. See De Asencio v. Tyson Foods, Inc., 342 F.3d 301, 309 (3d Cir. 2003)(“Generally, a district court will find substantial predomination where a state claim constitutes the real body of the case, to which the federal claim is only an appendage – only where permitting litigation of all claims in the district court can accurately be described as allowing a federal tail to wag what is in substance a state dog.”)(internal quotation omitted). Additionally, the FCA complaint purports to cover four named drugs sold by Case 2:06-cv-00920-MHT-VPM Document 129 Filed 10/20/2006 Page 29 of 34 30 Dey, while Alabama’s complaint targets nine drugs sold by Dey (including the four on which the FCA complaint is based). Moreover, the exercise of supplemental jurisdiction would materially impede both the federal FCA case and Alabama’s case, constituting a compelling reason for declining to exercise supplemental jurisdiction. See Palmer v. Hosp. Auth. of Randolph County, 22 F.3d 1559, 1569 (11th Cir. 1994)(noting judicial economy, convenience, and fairness to the parties as factors supporting discretionary remand under § 1367(c)); see also Madden v. Able Supply Co., 205 F. Supp. 2d 695, 702 (S.D. Tex. 2002)(remanding state law claims and holding that the factors enumerated in § 1367(c)(2) and (4) were clearly present where only one of forty defendants had grounds for invoking federal court’s jurisdiction, claims against other defendants all arose from state law and had been pending in state court for nearly two years, and remaining claims would probably have been transferred to multidistrict litigation panel, where they would not be heard for many years). VI. The State is Entitled to an Award of Attorney Fees and Costs. 28 U.S.C. § 1447(c) provides: “An order remanding the case may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal.” The Supreme Court recently articulated the standard to be applied in determining whether to award costs and expenses pursuant to this statute: Absent unusual circumstances, courts may award attorney’s fees under 1447(c) only where the removing party lacked an objectively reasonable basis for seeking removal. Conversely, when an objectively reasonable basis exists, fees should be denied. In applying this rule, district courts Case 2:06-cv-00920-MHT-VPM Document 129 Filed 10/20/2006 Page 30 of 34 31 retain discretion to consider whether unusual circumstances warrant a departure from the rule in a given case. Martin v. Franklin Cap. Corp., 546 U.S. 132 (2005)(internal citations omitted). The Court also noted that while the removal statute represented Congress’ intent to “confer a right to remove,” it is also designed to “deter removals sought for the purpose of prolonging litigation and imposing costs on the opposing party.” Id. Here, Dey clearly lacked an objectively reasonable basis for removal. See Hansard v. Forsyth County, 2006 WL 1843559, at *2-3 (11th Cir. July 6, 2006)(affirming award of attorney fees on remand where defendants did not have an objectively reasonable basis for removal when the complaint, on its face, did not plead a federal claim and resolution of the state law claims did not necessarily require the resolution of any federal issues). This is particularly true with respect to its position that the federal qui tam complaint constitutes an “amended pleading, motion, order, or other paper” within the meaning of 28 U.S.C. § 1446(b). This position has been squarely rejected by the courts, including federal courts that within the last year granted remand motions after removals by Dey and the other defendants in other state Attorney General AWP litigation (including the MDL court in Boston to which Dey seeks to have this case transferred). The State did nothing to spur the erroneous removal. There has been no change in the parties or the allegations of the State’s complaint since the filing of the original, the first amended, or second amended complaint, the last of which occurred on January 26, 2006. Therefore, there has been no action by the State that would suddenly create federal subject matter jurisdiction or allow additional time for the defendants to remove. The Case 2:06-cv-00920-MHT-VPM Document 129 Filed 10/20/2006 Page 31 of 34 32 Defendants’ actions have caused the State to incur needless litigation costs and efforts, are contrary to the principles of federalism and are frustrating to judicial economy. The awarding of fees is important to deter erroneous removals and to protect the State’s right to choose its forum. Because there was no objectively reasonable basis supporting removal, the State should be awarded attorney fees and costs in seeking this remand and opposing the erroneous removal. CONCLUSION Based on the foregoing, Defendants’ removal is improper because it is untimely, the unsealed federal qui tam action is not an “other paper” under 28 U.S.C. § 1446(b), and this Court lacks subject matter jurisdiction over the action. Therefore, this case should be remanded to the Circuit Court of Montgomery County, Alabama straight away to prevent any further delay or prejudice to the State. Costs and expenses, including attorney fees, should also be awarded to the State. s/ Troy King_______________________________ TROY KING ATTORNEY GENERAL STATE OF ALABAMA 300 State House 11 S. Union Street Montgomery, Alabama 36130 Email: tking@ago.state.al.us Case 2:06-cv-00920-MHT-VPM Document 129 Filed 10/20/2006 Page 32 of 34 33 s/ Jere L. Beasley__________________________ Jere L. Beasley (BEA020) W. Daniel “Dee” Miles, III (MIL060) Clinton C. Carter (CAR112) Deputy Attorneys General BEASLEY, ALLEN, CROW, METHVIN, PORTIS & MILES, P.C. P. O. Box 4160 Montgomery, AL 36103-4160 (334) 269-2343 (334) 954-7555 (facsimile) Email: jere.beasley@beasleyallen.com dee.miles@beasleyallen.com clint.carter@beasleyallen.com s/ Caine O’Rear III________________ Caine O’Rear III (ORE003) Windy C. Bitzer (BIT005) Deputy Attorneys General HAND ARENDALL, L.L.C. P. O. Box 123 Mobile, AL 36601 (251) 432-5511 (251) 694-6375 (facsimile) Email: corear@handarendall.com wbitzer@handarendall.com Roger L. Bates (BAT006) Deputy Attorney General HAND ARENDALL, L.L.C. 1200 Park Place Tower 2001 Park Place North Birmingham, AL 35203 (205) 324-4400 (205) 322-1163 (facsimile) Email: rbates@handarendall.com Attorneys for the State of Alabama Case 2:06-cv-00920-MHT-VPM Document 129 Filed 10/20/2006 Page 33 of 34 34 CERTIFICATE OF SERVICE I hereby certify that on October 20, 2006, I electronically filed the foregoing with the Clerk of the Court using the CM/ECF system which will send notification of such filing to counsel. I further certify that I have, on this day, served this pleading to counsel of record through the LexisNexis File and Serve system, pursuant to Case Management Order No. 2. s/ Caine O’Rear III_________________________ Case 2:06-cv-00920-MHT-VPM Document 129 Filed 10/20/2006 Page 34 of 34 Case 2:06-cv-00920-MHT-VPM Document 129-2 Filed 10/20/2006 Page 1 of 8 Case 2:06-cv-00920-MHT-VPM Document 129-2 Filed 10/20/2006 Page 2 of 8 Case 2:06-cv-00920-MHT-VPM Document 129-2 Filed 10/20/2006 Page 3 of 8 Case 2:06-cv-00920-MHT-VPM Document 129-2 Filed 10/20/2006 Page 4 of 8 Case 2:06-cv-00920-MHT-VPM Document 129-2 Filed 10/20/2006 Page 5 of 8 Case 2:06-cv-00920-MHT-VPM Document 129-2 Filed 10/20/2006 Page 6 of 8 Case 2:06-cv-00920-MHT-VPM Document 129-2 Filed 10/20/2006 Page 7 of 8 Case 2:06-cv-00920-MHT-VPM Document 129-2 Filed 10/20/2006 Page 8 of 8 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 1 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 2 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 3 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 4 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 5 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 6 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 7 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 8 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 9 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 10 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 11 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 12 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 13 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 14 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 15 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 16 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 17 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 18 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 19 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 20 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 21 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 22 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 23 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 24 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 25 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 26 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 27 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 28 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 29 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 30 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 31 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 32 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 33 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 34 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 35 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 36 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 37 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 38 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 39 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 40 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 41 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 42 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 43 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 44 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 45 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 46 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 47 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 48 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 49 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-3 Filed 10/20/2006 Page 50 of 50 Case 2:06-cv-00920-MHT-VPM Document 129-4 Filed 10/20/2006 Page 1 of 2 Case 2:06-cv-00920-MHT-VPM Document 129-4 Filed 10/20/2006 Page 2 of 2 Case 2:06-cv-00920-MHT-VPM Document 129-5 Filed 10/20/2006 Page 1 of 2 Case 2:06-cv-00920-MHT-VPM Document 129-5 Filed 10/20/2006 Page 2 of 2 Case 2:06-cv-00920-MHT-VPM Document 129-6 Filed 10/20/2006 Page 1 of 1