HOOD v. ASTRAZENECA PHARMACEUTICALS, LP (N.D.Miss. 10-7-2010)

Id. at 706; see also 28 U.S.C. § 1332(d)(2)(a) (minimal diversity for class actions). Here, there is no class action; thus, minimal diversity does not suffice to allow the claim to remain in federal court.

The proposition that a state, as a quasi-sovereign, is not a "citizen" for diversity purposes is a long-standing one that enjoys acceptance in history, see Postal Telegraph Cable Co. v. Alabama, 155 U.S. 482, 487, 15 S.ct. 192, 39 L. Ed. 231 (1894), and approval with the passage of time. See, e.g., Ohio v. Wyandotte Chemicals Corp., 401 U.S. 493, 498 n. 3, 91 S.ct. 1005, 28 L. Ed. 2d 256 (1971); Northeast Fed. Credit Union v. Neves, 837 F.2d 531 (1st Cir. 1988); Ramada Inns, Inc. v. Rosemount Mem'l Park Ass'n, 598 F.2d 1303, 1309 (3d Cir. 1979); Wisconsin v. Maryland Nat'l Bank, 734 F.2d 1015, 1016 (4th Cir. 1984) (per curiam); Krisel v. Duran, 386 F.2d 179, 181 (2d Cir. 1967), cert. denied, 390 U.S. 1042, 88 S.ct. 1635, 20 L. Ed. 2d 303 (1968); Union Oil Co. of California, 458 F.3d at 367. For this reason, the Court finds that the existence of the State of Mississippi as a real party in interest to this action destroys subject matter jurisdiction pursuant to Section 1332.

Defendants also make the argument that "the plaintiffs [referring to the State and the Employees Plan] could have filed separate lawsuits against AstraZeneca for their damages, and the suit by the Employees Plan would be removable under § 1332." Assuming again that Employees Plan is even a plaintiff or a real party in interest to this controversy, the Court does not necessarily disagree with Defendants' statement. However, upholding jurisdiction based on this premise would collapse the very notion of complete diversity. Defendants are basically making a minimal diversity argument. For Section 1332 jurisdictional purposes, it is irrelevant that in the absence of the non-diverse party, the remaining diverse party's claim could be removed to federal court. Under Strawbridge, for diversity to exist, every plaintiff must be diverse from every defendant. 7 U.S. (3 Cranch) at 267. Of course there are "exceptions" to this, such as "improper joinder" or when a plaintiff is a mere nominal party, but those scenarios do not exist in the present case.

Federal Question

In determining whether a case arises under federal law, the Court looks to whether the "plaintiff's well-pleaded complaint raises issues of federal law." City of Chicago v. Int'l College of Surgeons, 522 U.S. 156, 163, 118 S.ct. 523, 139 L. Ed. 2d 525 (1997) (quoting Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 63, 107 S.ct. 1542, 95 L. Ed. 2d 55 (1987) (internal quotation marks omitted)). It is undisputed that Plaintiff has failed to assert a federal cause of action explicitly on the face of its well-pleaded complaint. However, Defendants assert that federal jurisdiction exists because the complaint, which asserts state-law claims, raises substantial and disputed issues of federal law. Much of the debate in the parties' briefs concerns a previous case involving similar facts, which was remanded to state court by this Court. See Hood v. Ortho-McNeil-Janssen Pharm., Inc., 2009 WL 561575 (N.D. Miss. Mar. 4, 2009) ("Janssen"). Significantly, the causes of action asserted in Plaintiff's Complaint are nearly identical to those raised in Janssen. Even so, Defendants appear to argue that this case was removed on grounds different from the removal grounds raised in that case. Specifically, Defendants contend that jurisdiction exists because Plaintiff's Complaint raises federal questions regarding: (1) whether federal Medicaid law allows a state to recover funds expended for all Seroquel prescriptions; (2) whether the State's actions are potentially preempted under the federal Medicaid program; (3) whether Defendants violated the Federal Food, Drug, and Cosmetic Act ("FDCA") by allegedly "off-label" marketing Sesroquel for "non-FDA-approved uses;" and (4) whether regulation of Defendants' speech (i.e., its alleged improper promotion of Seroquel) implicates the First Amendment.

"[I]n certain cases federal-question jurisdiction will lie over state-law claims that implicate significant federal issues." Grable Sons Metal Prods. v. Darue Eng'g Mfg., 545 U.S. 308, 312, 125 S.ct. 2363, 162 L. Ed. 2d 257 (2005). "[T]he question is, does a state-law claim 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. Id. at 314, 125 S.ct. 2363. In other words, federal question jurisdiction exists where: (1) resolving a federal issue is necessary to resolution of the state-law claim; (2) the federal issue is actually disputed; (3) the federal issue is substantial; and (4) federal jurisdiction will not disturb the balance of federal and state judicial responsibilities.Singh v. Duane Morris LLP., 538 F.3d 334, 338 (5th Cir. 2008). Further, "[t]he burden of establishing federal jurisdiction rests on the party seeking the federal forum." Howery v. Allstate Ins. Co., 243 F.3d 912, 919 (5th Cir. 2001).

a. Whether Plaintiff's Claims Raise Substantial Questions of Federal Medicaid Law

Defendants contend that this case raises substantial questions under federal Medicaid law. More specifically, Defendants aver that "whether the state can recover funds it spent for reimbursing Seroquel prescriptions here depends on interpretation of federal Medicaid statutes." Irrespective of the manner in which the Defendants attempted to craft their basis for removal, the Court finds that this issue is essentially the same as the arguments rejected in this Court's opinion in Janssen as well as in Judge Herlong's well-reasoned opinions in State of South Carolina ex rel. Henry McMaster v. Eli Lilly Company, Inc., No. 7:07-cv-1875-HMH, 2007 WL 2261693 (D.S.C. Aug. 3, 2007) and State of South Carolina ex rel. Henry McMaster v. Janssen Pharmaceutica Inc., No. 7:07-cv-1452-HMH, 2007 WL 2022173 (D.S.C. July 10, 2007).

Medicaid is a federal-state partnership. See 42 U.S.C. §§ 1396- 1396v (2005); Ark. Dep't of Health Human Servs. v. Ahlborn, 547 U.S. 268, 275, 126 S.ct. 1752, 164 L. Ed. 2d 459 (2006) (describing Medicaid program as a "cooperative one" between the federal government and the states). Under the Medicaid framework, each state develops a plan detailing standards for eligibility and the content of medical assistance it will provide, in accordance with federal statutes and regulations. See generally 42 U.S.C. § 1396a(a). The program is administered by the Center for Medicare and Medicaid Services ("CMS"), which is under the authority of the Secretary for Health and Human Services. See Montana v. Abbot Labs., 266 F. Supp. 2d 250, 252 (D. Mass. 2003). The Secretary "shall approve" any state plan which complies with the myriad requirements set forth in 42 U.S.C. § 1396a(a) and (b). The federal government then reimburses the state a statutorily defined percentage of the costs incurred by the state. 42 U.S.C. § 1396b.

Under Medicaid, states are not required to provide coverage for prescription drugs, 42 U.S.C. § 1396d(a)(12), but most states, including Mississippi, do. In order to save costs, Congress passed the Medicaid Rebate Statute, 42 U.S.C. § 1396r-8, which "requires drug companies to pay rebates to states on their Medicaid purchases." See Pharm. Research Mfrs. of Am. v. Walsh, 538 U.S. 644, 649, 123 S.ct. 1855, 155 L. Ed. 2d 889 (2003); 42 U.S.C. § 1396r-8(b)(1)(A). The Medicaid Act allows states to "exclude or otherwise restrict coverage of a covered outpatient drug if . . . the prescribed use is not for a medically accepted indication." 42 U.S.C. § 1396r-8(d)(1)(B).

For federal-question jurisdiction to arise here, there must exist "not only a contested federal issue, but a substantial one, indicating a serious federal interest in claiming the advantages thought to be inherent in a federal forum."Grable, 545 U.S. at 313, 125 S.ct. 2363. The Supreme Court has emphasized that merely alleging a "federal issue" does not operate "as a password opening federal courts to any state action embracing a point of federal law." Id. Few cases can be "squeezed into the slim category Grable exemplifies." Empire Healthchoice Assurance, Inc. v. McVeigh, 547 U.S. 677, 704, 126 S.ct. 2121, 165 L. Ed. 2d 131 (2006). In this case, the Complaint alleges various tortious acts committed by Defendants, including inducing the submission of false and fraudulent claims under the State's Medicaid program. The State further alleges that the Defendants made false statements of material fact and failed to adequately warn of the risks attendant to Seroquel.

Defendants proceed under the gestalt notion that, since Medicaid is largely a complex federal program, federal issues must somehow come into play. However, Plaintiff's claims in this case do not focus on the federal aspects of the Medicaid scheme. Rather, Defendants' liability will depend upon its breach of duties as defined and created by state law. For example, if the State proves at trial that Defendants violated the Federal Medicaid Act, it would not necessarily follow that they committed Medicaid fraud as defined in Miss. Code Ann. § 43-13-213. As this Court noted in Janssen,

Here the central question is whether the Defendants' advertising and promotion methods violate [Mississippi] tort law . . . The alleged acts and omissions by the Defendants allegedly constitute failure to warn, negligence, breach of warranty, fraud and misrepresentation under [Mississippi] law . . . because [Defendants] allegedly intentionally misrepresented their drug's efficacy and risks for such uses.

Janssen, 2009 WL 561575, at *2. Thus, in this case, the central dispute will be fact-bound and situation-specific under Mississippi law. Compare Grable, 545 U.S. 308, 125 S.ct. 2363 (federal arising under jurisdiction present where there was a pure issue of law, and one that could be settled once and for all and thereafter govern numerous tax sale cases) with Empire, 547 U.S. at 700-01, 126 S.ct. 2121 (arising under jurisdiction not present where the issue of reimbursement of insurance benefits was "fact-bound and situation-specific."). Additionally, Plaintiff's right to relief is dependent upon state law. Therefore, Mississippi law is "essential" to the resolution of Plaintiff's claims. Cf. Grable, 545 U.S. at 315, 125 S.ct. 2363 (jurisdiction present where the question of proper notice by the IRS was an "essential element" and the "only . . . issue contested" in the plaintiff's state law quiet title action).

Even if Defendants could demonstrate the existence of a federal question in the instant case, "the federal issue will ultimately qualify for a federal forum only if federal jurisdiction is consistent with congressional judgment about the sound division of labor between state and federal courts governing the application of § 1331." Grable, 545 U.S. at 313-14, 125 S.ct. 2363. Defendants have failed to make this showing. In general, "the absence of a federal private right of action [is] evidence relevant to, but not dispositive of, the sensitive judgments about congressional intent that § 1331 requires." Id. at 318, 125 S.ct. 2363 (internal quotation marks omitted). However, in contrast to the facts in Grable, a finding of federal jurisdiction over any state cause of action implicating provisions of the Federal Medicaid Act and its accompanying regulations could "attract [] a horde of original filings and removal cases raising other state claims with embedded federal issues." Id., 125 S.ct. 2363. Under these circumstances, the fact that Congress provided no private right of action in the Federal Medicaid Act presents compelling evidence that a finding of federal jurisdiction in the instant case would not be "consistent with congressional judgment about the sound division of labor between state and federal courts." Id. at 313, 125 S.ct. 2363.

Further supporting this finding is the fact that the Federal Medicaid Act requires states to seek recovery of Medicaid funds from liable third parties. 42 U.S.C. § 1396a(a)(25); see New York v. Lutheran Center for the Aging, Inc., 957 F. Supp. 393, 403 (E.D.N.Y. 1997) ("Where a federal statute such as Medicaid requires a state to enforce liability against a third party but does not provide the ground for that liability, federal question jurisdiction will not lie."). Therefore, a finding of federal jurisdiction in the instant case would not be "consistent with congressional judgment about the sound division of labor between state and federal courts." Grable, 545 U.S. at 313, 125 S.ct. 2363.

The Court's decision to grant remand in this case, like our decision in Janssen, is consistent with many other courts who have remanded similar claims brought by states against pharmaceutical companies for recovery of Medicaid funds paid by the states. See Judge Herlong's analysis in State of South Carolina ex rel. Henry McMaster v. Eli Lilly Company, Inc., No. 7:07-cv-1875-HMH, 2007 WL 2261693 (D.S.C. Aug. 3, 2007) and State of South Carolina ex rel. Henry McMaster v. Janssen Pharmaceutica Inc., No. 7:07-cv-1452-HMH, 2007 WL 2022173 (D.S.C. July 10, 2007). See also Arkansas ex rel. McDaniel v. AstraZeneca Pharm., L.P., No. 4:08CV00601 BSM, 2008 WL 3992746, at *1 (E.D. Ark. Aug. 25, 2008) (remanding similar Seroquel case to state court); South Carolina ex rel. McMaster v. Astra Zeneca Pharms., 2009 WL 1227848 (May 5, 2009 D.S.C. 2009) (remanding similar Seroquel case to state court); Arkansas ex rel. McDaniel v. Janssen Pharmaceutica, Inc., No. 4:07-cv-1210-WRW, 2008 WL 819019, at *1 (E.D. Ark. Mar. 25, 2008) (remanding case based on claims similar to those asserted by Plaintiff); Pennsylvania v. Eli Lilly Co., 511 F. Supp. 2d 576, 581 (E.D. Pa. 2007) (remanding similar case to state court and noting "[e]ven though `medically accepted indication' is defined by federal law, liability under the state law claims presented here nonetheless does not depend on the violation of any federal standard or statute"); Hawaii v. Abbott Labs., Inc., 469 F. Supp. 2d 842, 852 (D. Haw. 2006) (remanding to state court claims for recovery of Medicare co-payments); State of Missouri ex rel. Nixon v. Mylan Labs., Inc., No. 4:06CV603 FLEA, 2006 WL 1459772 (E.D. Mo. May 23, 2006) (remanding case seeking damages for allegedly excessive reimbursement of Medicaid funds); Wisconsin v. Abbott Labs., 390 F. Supp. 2d 815 (W.D. Wisc. 2005) (remanding to state court suit by state based on state law claims for, inter alia, Medicaid fraud and false representation); State of Minnesota v. Pharmacia Corp., No. 05-1394, 2005 WL 2739297 (D. Minn. Oct. 24, 2005) (remanding case asserting claims for, inter alia, state Medicaid fraud and false advertising).

In contrast, the most comparable cases referenced by Defendants in support of jurisdiction are all opinions of a single district judge in the context of the Zyprexa Multidistrict Litigation. See e.g., Mississippi ex rel. Hood v. Eli Lilly and Co., 2007 WL 1601482 (E.D.N.Y. Jun. 5, 2007) (Weinstein, J.); West Virginia ex rel. McGraw v. Eli Lilly Co., 476 F. Supp. 2d 230 (E.D.N.Y. 2007) (Weinstein, J.); Louisiana ex rel. Foti v. Eli Lilly Co., 375 F. Supp. 2d 170 (E.D.N.Y. 2005) (Weinstein, J.). This Court is more persuaded by the majority of courts that have found federal jurisdiction lacking under these circumstances.

b. Preemption Issues

Defendants' make the argument that "when a state takes legal action pursuant to its own state law, but its action exceeds its authority under federal Medicaid law, there is a paramount federal interest." The fact that Defendants' allege that Plaintiff's state law claims could possibly exceed the State's authority under federal law is also insufficient to confer federal removal jurisdiction here. Defendants' preemption-type argument arises as a defense to Plaintiff's allegations. Removal is not proper if based on a defense or an anticipated defense which is federal in nature, "including the defense of preemption. . . ."Caterpillar Inc. v. Williams, 482 U.S. 386, 393, 107 S.ct. 2425, 96 L. Ed. 2d 318 (1987) ("The fact that a defendant might ultimately prove that a plaintiff's claims are preempted under [a federal statute] does not establish that they are removable to federal court");see also Gully v. First Nat'l Bank, 299 U.S. 109, 116, 57 S.ct. 96, 81 L. Ed. 70 (1936) ("By unimpeachable authority, a suit brought upon a state statute does not arise under an Act of Congress or the Constitution of the United States because prohibited thereby") (emphasis added). In the Gully decision, Justice Cardoza observed:

[A] finding upon the evidence that [State] law has been obeyed may compose the controversy altogether, leaving no room for a contention that federal law has been infringed. The most one can say is that a question of federal law is lurking in the background, just as farther in background there lurks a question of constitutional law, the question of state power in our federal form of government. A dispute so doubtful and conjectural, so far removed from plain necessity, is unavailing to extinguish the jurisdiction of the states.

299 U.S. at 117, 57 S.ct. 96.

By virtue of the Supremacy Clause, it is a "fundamental principle of the Constitution . . . that Congress has the power to preempt state law." Crosby v. Nat'l Foreign Trade Council, 530 U.S. 363, 372, 120 S.ct. 2288, 147 L. Ed. 2d 352 (2000). The preemption doctrine requires an examination of congressional intent. Fid. Fed. Sav. Loan Ass'n v. de la Cuesta, 458 U.S. 141, 152, 102 S.ct. 3014, 73 L. Ed. 2d 664 (1982). State action may be preempted by federal law in three ways: "by express language in a congressional enactment, by implication from the depth and breadth of a congressional scheme that occupies the legislative field, or by implication because of a conflict with a congressional enactment." Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 541, 121 S.ct. 2404, 150 L. Ed. 2d (2001) (citations omitted); accord English v. Gen. Elec. Co., 496 U.S. 72, 79, 110 S.ct. 2270, 110 L. Ed. 2d 65 (1990) (listing three categories of preemption); AT T Corp. v. Public Util. Comm'n of Tex., 373 F.3d 641, 645 (5th Cir. 2004) (same). As the Supreme Court has hastened to point out, however, "the categories of preemption are not `rigidly distinct.'" Crosby, 530 U.S. at 372 n. 6, 120 S.ct. 2288 (quoting English, 496 U.S. at 79 n. 5, 110 S.ct. 2270). Implied conflict preemption occurs when "compliance with both federal and state regulations is a physical impossibility" or where state law "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." Pac. Gas Elec. Co. v. State Energy Res. Conservation Dev. Comm'n, 461 U.S. 190, 204, 103 S.ct. 1713, 75 L. Ed. 2d 752 (1983) (internal quotation marks omitted) (quoting Fla. Lime Avocado Growers, Inc. v. Paul, 373 U.S. 132, 142-43, 83 S.ct. 1210, 10 L. Ed. 2d 248 (1963); Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.ct. 399, 85 L. Ed. 581 (1941)); see also Wells Fargo Bank of Tex. NA v. James, 321 F.3d 488, 491 n. 3 (5th Cir. 2003) (explaining that implied conflict preemption occurs "where the state law mandates or places irresistible pressure on the subject of the regulation to violate federal law, where compliance with both regulations is physically impossible, where the state regulation frustrates or hectors the overall purpose of the federal scheme, or where the federal scheme expressly authorizes an activity which the state scheme disallows.") (citations omitted).

As noted, usually federal preemption only provides a defense, and therefore does not permit removal. Caterpillar, 482 U.S. at 393, 107 S.ct. 2425. However, one corollary to the doctrine of the well-pleaded complaint is the doctrine of "complete preemption." Id. Complete preemption arises when congress intends a federal statute to preempt a field of law so completely that state law claims are considered converted into a federal cause of action. See Metropolitan Life Insurance Company v. Taylor, 481 U.S. 58, 63-65, 107 S.ct. 1542, 95 L. Ed. 2d 55 (1987); andCaterpillar, 482 U.S. at 393, 107 S.ct. 2425 ("On occasion, the Court has concluded that the pre-emptive force of a statute is so `extraordinary' that it converts an ordinary common-law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule."). While preemption of state law by federal law may be accomplished in various ways, the "complete" preemption of state law is not as common. See Anderson v. Elec. Data Sys. Corp., 11 F.3d 1311, 1315 (5th Cir. 1994) ("Congress may so completely preempt a particular area that any civil complaint raising this select group of claims is necessarily federal in character. . . .") (emphasis added).

Unlike the "substantive" preemption doctrines discussed above, "complete preemption" is a facially procedural doctrine. Johnson v. Baylor Univ., 214 F.3d 630, 632 (5th Cir. 2000) (noting that "[c]omplete preemption, which creates federal removal jurisdiction, differs from more common ordinary preemption, which does not); Lister v. Stark, 890 F.2d 941, 943 n. 1 (7th Cir. 1989) ("The use of the term `complete preemption' is unfortunate, since the complete preemption doctrine is not a preemption doctrine but rather a federal jurisdiction doctrine."). While a court conducts a substantive, ordinary preemption analysis to determine whether to apply federal law instead of state law, a complete preemption analysis is conducted to determine whether a federal court has jurisdiction to hear claims removed from state court. See 28 U.S.C. § 1441.

To establish complete preemption, a defendant must demonstrate that:

(1) the statute contains a civil enforcement provision that creates a cause of action that both replaces and protects the analogous area of state law; (2) there is a specific jurisdictional grant to the federal courts for enforcement of that right; and (3) there is a clear Congressional intent that claims brought under the federal law be removable.

Gutierrez v. Flores, 543 F.3d 248, 252 (5th Cir. 2008). The Fifth Circuit's "former complete preemption test has been altered by the Supreme Court insofar as the Court `shifted the focus of the last part of [the Fifth Circuit's] test from Congress's intent that the claim be removable, to Congress's intent that the federal action be exclusive.'" Bellfort Enters. Inc. v. PetroTex Fuels Inc., 399 F. App'x 416, 419 (5th Cir. 2009) (quotingBeneficial Nat'l Bank v. Anderson, 539 U.S. 1, 11, 123 S.ct. 2058, 156 L. Ed. 2d 1 (2003)).

To show complete preemption here in order to justify removal, Defendants must demonstrate that Congress has so occupied this area of law (i.e., Medicaid) that Plaintiff cannot present a state-law claim, and that the only existing interpretation of Plaintiff's claim is one under federal law. See Beneficial Nat'l Bank, 539 U.S. at 8, 123 S.ct. 2058. That is, Defendants must show that Congress has, either explicitly or by inference, directed that federal law provide the exclusive cause of action in this field. Id. Defendants cannot make such a showing. In fact, Defendants failed to point to any sections, or even a single section, of federal Medicaid law that would demonstrate complete preemption. Further, Medicaid is the hallmark of "cooperative Federalism." Harris v. McRae, 448 U.S. 297, 308, 100 S.ct. 2671, 65 L. Ed. 2d 784 (1980). It is

Defendants also failed to cite to a single case that would support the argument of complete preemption here.

administered jointly by state and federal governments. That is, the "Federal Government provides financial assistance to participating States to aid them in furnishing health care to needy persons." Id. Hence, the very nature of the Medicaid program nullifies any claim that it completely preempts Mississippi law in order to warrant federal removal jurisdiction.

It is unclear whether Defendants' preemption argument also extends to its arguments regarding the FDCA or the FDA. To any extent Defendants make such an argument, the Court notes that the Supreme Court recently found that state products liability law was not preempted by FDA regulations, noting that "[i]f Congress thought state-law suits posed an obstacle to its objectives, it surely would have enacted an express pre-emption provision at some point during the FDCA's 70-year history." Wyethv. Levine, ___ U.S. ___, ___, 129 S.ct. 1187, 1200, 173 L. Ed. 2d 51 (2009). Thus, such an argument, if made, does not justify federal question jurisdiction.

c. Defendants' "Off — Label" and FDCA Arguments

Despite Defendants contentions that their bases for removal have not previously been considered, this Court has already rejected the exact type of off-label arguments alleged in this case. Specifically, this Court, again adopting Judge Herlong's reasoning, noted: "Thus, while the prescription of the drugs for such `off-label' uses was the alleged goal- and the alleged harm-the submission of claims for non-medically accepted indications or non-medically necessary uses was not in and of itself the tortious conduct." Janssen, 2009 WL 561575, at *2. However, even if this Court had never addressed the off-label argument, the Complaint, as pled by Plaintiff, has very little to do with violations of federal law regarding the FDCA and "off-labeling." Defendants claim that the "entire premise" of Plaintiff's injury revolves around representations about Seroquel's "off-label uses." Yet, Plaintiff's thirty-eight page complaint only mentions an "off-labeling" discussion twice, and never once as a cause of action. Likewise, the references are in the context of the State allegedly paying additional and inflated prices for Seroquel. Plaintiff's actual "entire premise" for the injury revolves around AstraZeneca's alleged failure to communicate the safety and efficacy of Seroquel, which is why the State allegedly expended more money than necessary. Further, the State explicitly notes that it is not seeking to hold Defendants liable under the FDCA.

Plaintiff's Complaint alleges a pattern of fraudulent conduct rather than an independent violation of federal law. A foundational principle of federal law is that a plaintiff is the master of the complaint. See Healy v. Sea Gulf Specialty Co., 237 U.S. 479, 480, 35 S.ct. 658, 659, 59 L. Ed. 1056 (1915); The Fair v. Kohler Dye and Specialty Co., 228 U.S. 22, 23, 33 S.ct. 410, 411, 57 L. Ed. 716 (1913). Likewise, it is well settled that "a plaintiff with a choice between federal and state law claims may elect to proceed in state court on the exclusive basis of state law, thus defeating the defendant's opportunity to remove, but taking the risk that his federal claims will one day be precluded." Carpenter v. Wichita Falls Indep. Sch. Dist., 44 F.3d 362, 366 (5th Cir. 1995) (citing Merrill Dow Pharmaceuticals Inc. v. Thompson, 478 U.S. 804, 809, 106 S.ct. 3229, 92 L. Ed. 2d 650 (1986)).

Additionally, applying the Grable test discussed above, the Court finds that any references to "off-label" uses in this case are not "substantial enough" to justify the exercise of federal question jurisdiction. See Grable, 545 U.S. at 314 (noting federal issue must be "actually disputed and substantial"). Plaintiff's prima facie case of state Medicaid fraud requires proof that Defendants made a false representation of a material fact or concealed or failed to disclose a material fact which affects the Defendants' right to payment or reimbursement under the State's Medicaid plan. MISS. CODE. ANN. § 43-13-205. As alleged, Plaintiff can establish a prima facie case of Medicaid fraud under state law without having to establish that Defendants' communications were "off-label" in violation of federal law. In sum, the Court finds that (1) Defendants' "off-label" arguments for federal jurisdiction have already been rejected by this Court as well as by Judge Herlong in State of South Carolina ex rel. Henry McMaster v. Eli Lilly Company, Inc., 2007 WL 2261693 (D.S.C. Aug.3, 2007) and State of South Carolina ex rel. Henry McMaster v. Janssen Pharmaceutica Inc., 2007 WL 2022173 (D.S.C. July 10, 2007); (2) violations of the FDA and the FDCA, through alleged off-labeling, fail to appear on the face of Plaintiff's well-pleaded complaint; and (3) such arguments fail to present a substantial federal issue sufficient to justify the exercise of subject matter jurisdiction under Grable.

Generally, "for pharmaceutical products liability cases filed in state court and raising FDCA-related state law claims, federal `arising under' jurisdiction does not exist pursuant to Merrell Dow." Allen v. GlaxoSmithKline PLC, 2008 WL 2247067, at *9 (E.D. Pa. May 30, 2008); see also Greene v. Novartis Pharms. Corp., 2007 WL 3407429 (M.D. Ga. 2007) (remanding case where plaintiff alleged that defendant pharmaceutical manufacturer fraudulently misrepresented drug's safety and failed to warn of drug's dangers); Caggiano v. Pfizer, Inc., 384 F. Supp. 2d 689 (S.D.N.Y. 2005) (remanding case where plaintiff alleged "classic state-law claims [but] the complaint [was] also peppered with allegations that the defendants violated various federal statutes and regulations . . . for example . . . that defendants deliberately failed to seek required FDA approval for many uses. . . .").

"Off-label" uses are uses other than those for which a drug was approved by the FDA. Washington Legal Found. v. Henney, 202 F.3d 331, 332 (D.C. Cir. 2000).

d. First Amendment Implications

Defendants also argue that the regulation of a drug manufacture's speech implicates the First Amendment. As noted above, a fundamental premise underlying "arising under" jurisdiction is embodied in the "well-pleaded complaint" rule. That doctrine provides that:

[w]hether a case is one arising under the Constitution or a law or treaty of the United States, in the sense of the jurisdictional statute . . . must be determined from what necessarily appears in the plaintiff's statement of his own claim in the bill or declaration, unaided by anything alleged in anticipation or avoidance of defenses which it is thought the defendant may interpose.

Taylor v. Anderson, 234 U.S. 74, 75-76, 34 S.ct. 724, 58 L. Ed. 1218 (1914); see also Gully v. First National Bank in Meridian, 299 U.S. 109, 57 S.ct. 96, 81 L. Ed. 70 (1936); Louisville Nashville R.R. Co. v. Mottley, 211 U.S. 149, 29 S.ct. 42, 53 L. Ed. 126 (1908). Therefore, a defendant "may not remove a case to federal court unless the plaintiff's complaint establishes that the case `arises under' federal law." Franchise Tax Board v. Construction Laborer's Vacation Trust, 463 U.S. 1, 11, 103 S.ct. 2841, 77 L. Ed. 2d 420 (1983) (emphasis in original). A necessary result of the well-pleaded complaint rule is that a defendant may not remove a case on the basis of a federal statutory or constitutional defense, even if the defense is anticipated in the complaint and both parties admit that the only question for decision is raised by the federal defense. Id. at 10-13, 103 S.ct. at 2841. Here, even assuming that there could possibly be a First Amendment issue, it would be asserted by Defendants. Stated differently, Plaintiff's Complaint alleges false statements of material fact regarding the safety and efficacy of Seroquel. If the First Amendment comes into play, it will be raised as a defense to Plaintiff's allegations. Thus, Defendants' attempts to confer federal jurisdiction through the First Amendment fail.

III. CONCLUSION

To summarize, Defendants have failed to meet their burden of showing that subject matter jurisdiction is proper. Thus, based on the reasons stated above, the Court grants Plaintiff's Motion to Remand.

So ordered on this, the _7th__ day of October, 2010.