United States District Court, E.D. Kentucky, Southern Division, at Pikeville
OPINION AND ORDER
K. CALDWELL, CHIEF JUDGE UNITED STATES DISTRICT COURT
matter is before the Court on Humana Inc.'s Motion to
Remand to the Pike County Circuit Court. (DE 16). For the
reasons stated below, the Motion is GRANTED.
Inc. (“Humana”) filed its Complaint in state
court against Celgene Corporation (“Celgene”)
asserting six causes of action-(1) fraud, (2) breach of
contract, (3) negligent misrepresentation, (4) unjust
enrichment, (5) violations of New Jersey's RICO statute
(“NJ RICO”), and (6) conspiracy to violate N.J.
RICO. (DE 1-1 at 29-38.) Humana's claims ultimately stem
from insurance benefits it paid on behalf of its insured for
two drugs produced by Celgene, Thalomid and Revlimid. (DE
1-1.) Humana's first three claims are premised on a
breach of contractual representations and warranties. (DE 1-1
at 29-32.) Humana asserts that Celgene fraudulently or
negligently induced it to enter into contracts which required
it to provide coverage for Thalomid and Revlimid prescribed
for ineffective and unsafe purposes in contravention of
local, state, and federal law. (DE 1-1 at 29-32.) Humana
further asserts that Celgene was unjustly enriched through
its actions. (DE 1-1 at 33.) In its final two claims, Humana
asserts that Celgene is liable under New Jersey's RICO
Act, N. J. Stat. Ann. § 2C:41-2(c) and (d), because it
deliberately misrepresented the uses for which Thalomid and
Revlimid have been proven to be effective; provided or caused
to be provided written materials to physicians containing
false and misleading information on which physicians were
intended to rely; and actively concealed information about
Celgene's off-label marketing activities. (DE 1-1 at
removed the case to the Eastern District of Kentucky on the
basis of federal question jurisdiction. (DE 1 at 1.) Celgene
asserts that this action is replete with federal questions
because in order to prevail, Humana must prove violations of
the Food Drug and Cosmetics Act (“FDCA”) or
violations of regulations promulgated by the Food and Drug
Administration (“FDA”). (DE 1 at 2-5.) Humana now
moves for remand under 28 U.S.C. § 1447(c), asserting
that this case was improperly removed because it does not
arise under federal law. (DE 16-1 at 1). Accordingly, Humana
claims that this Court does not have subject matter
there are several motions pending in this matter, the Court
must first determine whether removal from the Pike County
Circuit Court was proper. On a motion to remand, the
defendant bears the burden to show that this Court has
original jurisdiction. Eastman v. Marine Mech.
Corp., 438 F.3d 544, 549 (6th Cir. 2006). Original
jurisdiction exists through either diversity of citizenship,
see 28 U.S.C. §§ 1332(a) and 1441(b), or
federal question jurisdiction, see 28 U.S.C.
§§ 1331 and 1441(a). When there are any doubts as
to the propriety of removal, “the removal statute
should be strictly construed and all doubts resolved in favor
of remand.” Eastman, 438 F.3d at 550. It is
uncontested that there is no diversity of citizenship among
the parties because Humana and Celgene are both citizens of
Delaware. (DE 1-1 at 6-8.) The Court considers the
parties' arguments on federal question jurisdiction
Federal question jurisdiction.
have consistently applied the well-pleaded complaint rule
when reviewing federal question jurisdiction on a motion to
remand. “To determine whether the claim arises under
federal law, we examine the ‘well pleaded'
allegations of the complaint and ignore potential
defenses.” Mikulski v. Centerior Energy Corp.,
501 F.3d 555, 560 (6th Cir. 2007) (quoting Beneficial
Nat'l Bank v. Anderson, 539 U.S. 1, 6 (2003)). As a
result of the rule, “federal questions presented by
defenses-or even by the plaintiff's anticipatory rebuttal
of an expected defense-cannot support
jurisdiction.” Dillon v. Medtronic, Inc., 992
F.Supp.2d 751, 755 (2014) (citing Franchise Tax Bd. v.
Constr. Laborers Vacation Trust, 463 U.S. 1, 10 (1983)).
Complaint, Humana does not rely on a federal cause of action.
Instead, it asserts several state-law causes of action
against the defendant. (DE 1-1 at 29-38.) Consequently, the
claims within the well-pleaded complaint do not directly
arise under federal law or jurisdiction.
the United States Court of Appeals for the Sixth Circuit
recognizes three exceptions to the well-pleaded complaint
rule, by which the defendants could still show that federal
jurisdiction is proper. See Mikulski, 501 F.3d at
560. The first two exceptions, artful-pleading and complete
preemption, are not applicable to this case. Only the third
exception, the substantial federal question doctrine, is at
The substantial federal question doctrine.
relies on the substantial federal question doctrine in
removing this case to federal court. (DE 1.) The United
States Supreme Court has held that federal courts have
federal question jurisdiction over state-law claims that
raise a substantial federal issue, but only when the exercise
of such jurisdiction will not upset the balance of state and
federal judicial responsibilities. See Grable & Sons
Metal Prod., Inc. v. Darue Eng'g & Mfg., 545
U.S. 308, 314 (2005).
substantial federal question doctrine only applies to a
“special and small category of cases.” Gunn
v. Minton, 568 U.S. 251, 258 (2013). The Sixth Circuit,
relying on Grable, has adopted a three-part test to
determine whether state-law claims implicate federal question
jurisdiction-(1) The state-law claim must necessarily raise a
disputed federal issue; (2) the federal interest in issue
must be substantial; and (3) the exercise of jurisdiction
must not disturb any congressionally approved balance of
federal and state judicial responsibilities.
Mikulski, 501 F.3d at 568. For federal jurisdiction
to lie under the substantial federal question doctrine, the
removing defendant must show that all factors are fulfilled.
asserts that Humana's claims for fraud, breach of
contract, violations of N.J. RICO, and conspiracy to violate
N.J. RICO all raise substantial federal questions which give
this Court subject matter jurisdiction. (DE 1.) Celgene
concedes that Humana's claims for negligent
misrepresentation and unjust enrichment raise no federal
issues. (See DE 45 at 8.) Accordingly, this Court
will consider only whether Humana's remaining claims
raise substantial federal questions. For the reasons stated
below, the Court does not have subject matter jurisdiction
over the claims in this case.
Whether Humana's state-law claims necessarily raise a