UNDERHILL, District Judge:
The Commonwealth of Kentucky ("Kentucky" or "the Commonwealth"), through its Attorney General, and Pike County, Kentucky ("the County") (collectively, "Plaintiffs") commenced this action in Kentucky state court against Purdue Pharma, L.P.; Purdue Pharma, Inc.; Purdue Frederick Company, Inc.; Purdue Pharmaceuticals, L.P.; and P.F. Laboratories, Inc. (collectively, "Purdue"), alleging that Purdue violated Kentucky law by misleading health care providers, consumers, and government officials regarding the risks of addiction associated with the prescription drug OxyContin, which Purdue manufactures, markets and sells. Purdue removed the action to federal court, arguing inter alia that Plaintiffs' claims constituted a putative "class action" removable under the Class Action Fairness Act of 2005 ("CAFA"), Pub.L. No. 109-2, 119 Stat. 4 (codified in scattered sections of 28 U.S.C.). Following transfer from the Eastern District of Kentucky to the Southern District of New York, the District Court (Sidney H. Stein, J.) granted Plaintiffs' motion to remand, concluding it lacked subject-matter jurisdiction because
Plaintiffs' state court complaint contained the following allegations. Purdue manufactures and sells OxyContin, an opioid analgesic drug used to manage pain. See Am. Compl., at ¶¶ 23-24. From 1995 to 2001, Purdue promoted OxyContin to health care providers 5 as "less addictive, less subject to abuse and diversion, and less likely to cause tolerance and withdrawal than other pain medications," despite knowing that such assertions were false or misleading. Id. ¶ 42. According to Plaintiffs, Purdue's actions prevented Kentuckians from accurately assessing the appropriate uses and risks of OxyContin, and caused physicians to overprescribe OxyContin, which resulted in widespread addiction and other adverse consequences, including death and "the commission of criminal acts to obtain OxyContin." Id. ¶¶ 2, 68, 84. Kentucky, which covers health care costs for indigent and otherwise eligible residents under its Medicaid and Pharmaceutical Assistance Programs, bore significant additional costs as a result of Purdue's actions. Similarly, Pike County spent millions of dollars investigating, apprehending, prosecuting, and incarcerating persons who, "due to the fraudulently concealed addictive nature of OxyContin, have resorted to criminal means to continue their addiction." Id. ¶¶ 4, 8-9.
The complaint indicated that the action was brought pursuant to the Kentucky Attorney General's authority under state statutory and common law, "including [his] parens patriae authority," to recover, inter alia, "all the costs the Commonwealth... incurred in paying excessive and unnecessary prescription costs"; "all the costs expended for health care services and programs associated with the diagnosis and treatment of adverse health consequences of OxyContin use"; and "all the costs consumers have incurred in excessive and unnecessary prescription costs related to OxyContin." Id. ¶¶ 5-6. Specifically, Plaintiffs asserted the following claims under state law: (1) violation of the Kentucky Medicaid Fraud Statute, KRS §§ 205.8463 and 446.070; (2) violation of KRS § 15.060, which authorizes Kentucky's Attorney General to institute an action to recover fraudulent claims that have been paid out of the state treasury; (3) violation of the Kentucky False Advertising Statute, KRS §§ 517.030 and 446.070; (4) public nuisance; (5) unjust enrichment and restitution; (6) indemnity; (7) negligence; (8) violations of state antitrust law; (9) strict liability; (10) common-law fraud; (11) conspiracy and concert of action; and (12) punitive damages. In addition to damages based on the Medicaid-related expenses described above, the complaint also sought civil penalties, attorneys' fees, and equitable and injunctive relief.
Purdue removed the action to federal court, asserting that Plaintiffs' claims (1) raised federal questions under 28 U.S.C. § 1331; and (2) constituted a disguised "class action" removable under CAFA, 28 U.S.C. §§ 1332(d) and 1453. Following transfer to the United States District Court for the Southern District of New York, Plaintiffs moved to remand, arguing that the District Court lacked subject-matter jurisdiction because all of their claims arose exclusively under state law, and the case otherwise failed to meet CAFA's requirements. The District Court agreed and granted Plaintiffs' motion to remand in a published decision. See In re Oxycontin Antitrust Litig., 821 F.Supp.2d 591,
As a general rule, "[a]n order remanding a case ... is not reviewable on appeal or otherwise." 28 U.S.C. § 1447(d). Section 1453(c)(1), however, carves out a limited exception: "a court of appeals may accept an appeal from an order of a district court granting or denying a motion to remand a class action to the State court from which it was removed if application is made to the court of appeals [within a specified time period]." 28 U.S.C. § 1453(c)(1). Despite this narrow expansion of jurisdiction, we retain discretion over whether to accept such appeals, and our decision "will be guided by consideration of the importance and novelty of the issues raised by the case." Estate of Pew v. Cardarelli, 527 F.3d 25, 29 (2d Cir.2008); see also Koral v. Boeing Co., 628 F.3d 945, 946 (7th Cir.2011) (providing examples of CAFA cases in which leave to appeal was granted "because the appeal presents novel issues"). But even where a petition presents an "important" CAFA issue, courts have nevertheless denied leave to appeal when a determination can be made, on the basis of the petition alone, that the district court correctly remanded the case. See LG Display Co. v. Madigan, 665 F.3d 768, 771 (7th Cir.2011).
Purdue seeks leave to appeal the District Court's remand order, insisting this case presents an "important" and "unsettled" question under CAFA — namely, whether parens patriae lawsuits brought by state attorneys general qualify as "class actions" under CAFA. See Defs.' Pet. For Leave to Appeal, at 1-2.
We begin with the apodictic observation that "federal courts are courts of limited jurisdiction" and, as such, "lack the power to disregard such limits as have been imposed by the Constitution or Congress." Durant, Nichols, Houston, Hodgson, & Cortese-Costa, P.C. v. Dupont, 565 F.3d 56, 62 (2d Cir.2009) (quotation omitted). Congress has granted district courts original jurisdiction over cases in which there is a federal question, see 28 U.S.C. § 1331, and certain cases between citizens of different states, so long as the requirements of complete diversity and amount in controversy are met, see 28 U.S.C. § 1332.
In tandem with this limited grant of jurisdiction, the "federal removal statute allows a defendant to remove an action to the United States District Court in `any civil action brought in a State court of which the district courts of the United States have original jurisdiction.'" Bounds v. Pine Belt Mental Health Care Res., 593 F.3d 209, 215 (2d Cir.2010) (quoting 28 U.S.C. § 1441(a)). However, "[i]n light of the congressional intent to restrict federal court jurisdiction, as well as the importance of preserving the independence of state governments, federal courts construe the removal statute narrowly, resolving any doubts against removability." Lupo v. Human Affairs Int'l, Inc., 28 F.3d 269, 274 (2d Cir.1994) (quotation omitted).
CAFA "expanded the jurisdiction of the federal courts to allow class actions originally filed in state courts that conform to particular requirements to be removed to federal district courts." Greenwich Fin. Servs. Distressed Mortg. Fund 3 LLC v. Countrywide Fin. Corp., 603 F.3d 23, 26 (2d Cir.2010). In general, CAFA amended the diversity statute to confer federal jurisdiction over certain class actions where: (1) the proposed class contains at least 100 members (the "numerosity" requirement); (2) minimal diversity exists between the parties, (i.e., where "any member of a class of plaintiffs is a citizen of a State different from any defendant"); and (3) the aggregate amount in controversy exceeds $5,000,000. 28 U.S.C. § 1332(d)(2)-(6).
CAFA's reach, however, is limited in the first instance to actions that qualify as either a "class action" or a "mass action." See 28 U.S.C. § 1332(d)(1)-(2), (11); 28 U.S.C. § 1453(b). CAFA defines the term "class action" as "any civil action filed under rule 23 of the Federal Rules of Civil Procedure or similar State statute or rule of judicial procedure authorizing an action to be brought by 1 or more representative persons as a class action." 28 U.S.C. § 1332(d)(1)(B). A "mass action," in contrast, is defined as "any civil action ... in which monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiffs' claims involve common questions of law or
Purdue removed this action as a purported "class action" under CAFA.
States generally file suit in federal court in one of three capacities: (1) "proprietary suits in which the State sues much like a private party suffering a direct, tangible injury"; (2) "sovereignty suits requesting adjudication of boundary disputes or water rights"; or (3) "parens patriae suits in which States litigate to protect `quasi-sovereign' interests.'" Connecticut v. Cahill, 217 F.3d 93, 97 (2d Cir.2000) (internal citations omitted). The parens patriae (i.e., "parent of the country") doctrine has its antecedent in the common-law concept of the "royal prerogative," that is, the king's inherent power to act as the guardian for those "under legal disabilities to act for themselves." Hawaii v. Standard Oil Co., 405 U.S. 251, 257, 92 S.Ct. 885, 31 L.Ed.2d 184 (1972). To assert parens patriae standing, the State (or Commonwealth) must articulate a "quasi-sovereign interest" distinct "from the interests of particular private parties," such as an "interest in the health and well-being — both physical and economic — of its residents in general." Alfred L. Snapp & Son, Inc. v. Puerto Rico, 458 U.S. 592, 607, 102 S.Ct. 3260, 73 L.Ed.2d 995 (1982). The State may show such an interest by alleging "injury to a sufficiently substantial segment of its population." Id. However, "if the State is only a nominal party without a real interest of its own — then it will not have standing under the parens patriae doctrine." Id. at 600, 102 S.Ct. 3260; see also In re Baldwin-United Corp., 770 F.2d 328, 341 (2d Cir.1985) ("[W]hen the state merely asserts the personal claims of its citizens, it is not the real party in interest and cannot claim parens patriae standing.").
Here, Plaintiffs claim to bring this suit in both proprietary and parens patriae capacities, seeking: (1) restitution and reimbursement for damages suffered directly by the Commonwealth and the County as a result of, inter alia, unnecessary prescriptions costs and Medicaid claims paid out of the state treasury; (2) civil penalties, fines and attorneys' fees; and (3) equitable and injunctive relief based on "quasi-sovereign interests" in protecting the health and safety of citizens. Specifically, Plaintiffs' state-court complaint alleged violations of the following state statutes: (1) KRS § 205.8463, Kentucky's Medicaid Fraud Statute; (2) KRS § 517.030, Kentucky's False Advertising Statute; and (3) KRS §§ 367.110-300, the antitrust provisions of Kentucky's Consumer Protection Act. In addition, the complaint alleged the following common law violations: (1) public nuisance; (2) unjust enrichment and restitution; (3) indemnity; (4) negligence; (5) strict liability; and (6) common-law fraud.
Plaintiffs seek to enforce these various claims under two different statutory provisions: (1) KRS § 446.070; and (2) KRS § 15.060. The former provision establishes a general private right of action under state law: "A person injured by the violation of any statute may recover from the offender such damages as he sustained by reason of the violation, although a penalty or forfeiture is imposed for such violation." KRS § 446.070 (emphasis added). Under Kentucky law, it is well-settled that the Commonwealth is itself a "person" with standing to bring an action under KRS § 446.070 through its Attorney General. See United States v. Kentucky Nat'l Ins. Co., No. 89-6246, 1990 WL 78173, at *2 (6th Cir. June 11, 1990) (unpublished) ("Kentucky's highest court [has] held that the state itself, as a body-politic, is a `person' that can maintain an action under KRS 446.070.") (citing Commonwealth v. Shouse, 245 S.W.2d 441, 442 (Ky.1952)). The latter provision provides that the Attorney General shall: "When he believes
None of these statutes, however, authorizes suit "as a class action," nor does either bear any resemblance to Rule 23. None, for example, imposes any of the familiar hallmarks of Rule 23 class actions; namely, adequacy of representation, numerosity, commonality, typicality, or the requirement of class certification.
Against this straightforward application of CAFA's statutory prescriptions, Purdue puts forward several arguments in favor of removal — none of which is convincing.
In Purdue's estimation, there is more to this case than meets the eye. We are therefore urged to look past the pleadings, the named parties, and the stated causes of action to deduce the true nature of this proceeding. By "piercing the pleadings," and dissecting the complaint claim by claim, Purdue hopes we will conclude that, for certain claims, the "real parties in interest" are not the Commonwealth or the County, but individual consumers for whom the Attorney General is acting, in effect, as a disguised class representative. Purdue buttresses this argument with choice phrases plucked from the complaint — most notably, a single sentence from the "Prayer for Relief," which seeks "restitution and reimbursement for all prescription costs consumers have incurred in excessive and unnecessary prescription costs related to OxyContin." Prayer for Relief, at ¶ H (emphasis added). Building on this claim-by-claim approach, Purdue presses us to conclude that CAFA's requirements for minimal diversity, numerosity, and amount in controversy are satisfied.
As authority for its claim-by-claim approach, Purdue cites Louisiana ex rel. Caldwell v. Allstate Ins. Co., 536 F.3d 418 (5th Cir.2008). In Caldwell, the Fifth Circuit declined to remand an attorney general's antitrust action in which the State sought to collect, under its parens patriae authority, treble damages on behalf of certain citizen-policyholders. Id. at 422-23, 432. Noting that Congress, in passing CAFA, had "emphasized that the term `class action' should be defined broadly to prevent `jurisdictional gamesmanship,'" id. at 424 (quoting S.Rep. No. 109-14, at 35 (2005), 2005 U.S.C.C.A.N. 3), the court analyzed the real parties in interest on a claim-by-claim basis, rather than looking at the lawsuit as a whole. Id. at 425, 429-30. After carefully considering whether the State or its citizens were the "real parties" with respect to each type of relief sought, the Court "conclude[d] that as far as the State's request for treble damages is concerned, the policyholders are the real parties in interest," and the action was therefore properly removed as a "mass action" under CAFA. Id. at 429-30. Relying heavily on Caldwell, and arguing that this action, too, is merely masquerading as a parens patriae action to avoid CAFA's reach, Purdue invites us to adopt the claim-by-claim approach to unmask the "class action" lurking underneath.
We decline that invitation.
First, Caldwell's holding addresses only CAFA's "mass action" provisions, not the "class action" provisions we encounter here. See Caldwell, 536 F.3d at 430 ("Since we have concluded that this case was properly removed under CAFA's `mass action' provision, we need not address whether this lawsuit could, following further proceedings on remand, properly proceed as a class action under CAFA."); see also In re Vioxx Prods. Liab. Litig., 843 F.Supp.2d 654, 660 (E.D.La.2012) ("[T]he Fifth Circuit's precise holding in Caldwell is limited to the CAFA definition of mass actions, not class actions. The court expressly declined to decide whether the parens patriae lawsuit could also proceed as a class action on remand...."). Purdue removed this action as a "class action," and has never contended that this action qualifies as a "mass action."
Second, we note that the "claim-by-claim" approach has been roundly criticized, and the "whole-complaint" approach has emerged as the majority rule. See, e.g., AU Optronics Corp. v. South Carolina, 699 F.3d 385, 390, 393-94 (4th Cir. 2012) (addressing application of CAFA's "mass action" provisions by "adopting the whole-case approach and rejecting the claim-by-claim approach"); Nevada v. Bank of Am. Corp., 672 F.3d 661, 669-70 (9th Cir.2012) (employing "the approach of looking at the case as a whole to determine the real party in interest, rather than the claim-by-claim approach adopted in Caldwell"); Madigan, 665 F.3d at 773-74 (rejecting Caldwell's claim-by-claim approach, noting "just because CAFA was meant to expand federal courts' jurisdiction over class actions, it does not follow that federal courts are required to deviate from the traditional `whole complaint' analysis when evaluating whether a State is the real party in interest in a parens patriae case") (internal quotation omitted); see also Ohio v. GMAC Mortg., LLC, 760 F.Supp.2d 741, 745 (N.D.Ohio 2011) ("[A] majority of jurisdictions ... have looked at a state's complaint as a whole to determine whether the state is the real-party-in-interest.").
We have not yet passed on whether the real-party-in-interest inquiry should be made on the basis of the whole complaint or claim by claim, and district courts within this Circuit — considering the issue both before and after CAFA — appear to be split. Some have applied a claim-by-claim approach. See, e.g., Connecticut v. Levi Strauss & Co., 471 F.Supp. 363, 370-71 (D.Conn.1979) (analyzing separately each type of relief sought in the State's complaint to determine whether the State was the real party in interest for diversity purposes); see also Connecticut v. Chubb Group of Ins. Cos., No. 3:11-cv-997, 2012 WL 1110488, at *3 (D.Conn. Mar. 31, 2012) (following Levi Strauss, 471 F.Supp. at 370-71); Butler v. Cadbury Beverages, Inc., No. 3:97-cv-2241, 1998 WL 422863, at *2 (D.Conn. July 1, 1998) (same). Others have looked to the complaint as a whole. See New York ex rel. Abrams v. General Motors Corp., 547 F.Supp. 703, 704-07 (S.D.N.Y.1982) (looking to "the primary purpose of the action" to determine the real party in interest); MyInfoGuard, LLC v. Sorrell, Nos. 2:12-cv-074, 2:12-cv-102, 2012 WL 5469913, at *4-5 (D.Vt. Nov. 9, 2012) (rejecting Caldwell and stating "[t]his Court adopts the wholesale approach"); Connecticut v. Moody's Corp., No. 3:10-cv-546, 2011 WL 63905, at *3 (D.Conn. Jan. 5, 2011) (considering "the State's stake in the litigation as a whole"); New York ex rel. Cuomo v. Charles Schwab & Co., Inc., No. 09-cv-7709, 2010 WL 286629, at *4-6 (S.D.N.Y. Jan. 19, 2010) (same).
But we need not decide that issue today. Whatever the comparative merits of a "claim-by-claim" versus "whole-complaint"
One final point. Our decision today merely concerns CAFA's jurisdictional reach over this action, not whether the action is otherwise sufficient as a matter of state law. Whether Plaintiffs may proceed and ultimately recover on their claims presents complex questions of Kentucky law, which we only see through Erie's glass darkly, and upon which we express no opinion.
In sum, the District Court correctly determined that Plaintiffs' action is not a "class action" as defined in CAFA, and therefore the case was properly remanded.
To the extent we understand this serpentine line of reasoning, we disagree. Under CAFA's plain language, a "class action" is defined as a civil action "filed under" a state-law equivalent to Rule 23. 28 U.S.C. § 1332(d)(1)(B) (emphasis added). Neither KRS § 367.200 nor KRCP 23 are mentioned anywhere in Plaintiffs' complaint, and we are hard pressed to understand how a suit may be "filed under" a statute or rule that does not even appear on the face of the complaint. See In re Vioxx Prods. Liab. Litig., 843 F.Supp.2d 654, 664 (E.D.La.2012) ("Congress chose to define `class action' not in terms of joinder of individual claims or by representative relief in general, but in terms of the statute or rule the case is filed under.... If this is a formalistic outcome, it is a formalism dictated by Congress."). Moreover, the mere fact that the Attorney General could have utilized some other statutory or procedural mechanism to recover restitution is beside the point. Plaintiffs, as masters of their complaint, are always free to choose the statutory provisions under which they will bring their claims. See The Fair v. Kohler Die & Specialty Co., 228 U.S. 22, 25, 33 S.Ct. 410, 57 L.Ed. 716 (1913) ("Of course, the party who brings a suit is master to decide what law he will rely upon[.]"). Purdue's argument is therefore unavailing.