Case: 1:19-cv-03210 Document #: 1 Filed: 05/13/19 Page 1 of 21 PageID #:1

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
)
)
)
Plaintiff,
)
)
v.
)
) Civil Action No. 19-cv-03210
PURDUE PHARMA L.P., PURDUE PHARMA,
)
INC., PURDUE FREDERICK COMPANY, INC.,
)
RHODES PHARMACEUTICALS, CEPHALON,
)
INC., TEVA PHARMACEUTICAL INDUSTRIES,
)
LTD., TEVA PHARMACEUTICALS USA, INC.,
JANSSEN PHARMACEUTICALS, INC., JOHNSON )
)
& JOHNSON, INC., ORTHO-MCNEIL-JANSSEN
)
PHARMACEUTICALS, INC., JANSSEN
)
PHARMACEUTICA, INC., NORAMCO, INC.,
)
ENDO
)
HEALTH SOLUTIONS, INC., ENDO
)
PHARMACEUTICALS, INC., PAR
)
PHARMACEUTICAL COMPANIES INC.,
)
ALLERGAN PLC, ACTAVIS KADIAN, LLC,
)
ACTAVIS ELIZABETH, LLC, ACTAVIS PLC,
)
WATSON PHARMACEUTICALS,
)
INC., WATSON LABORATORIES, INC.,
)
ACTAVIS PHARMA, INC., MALLINCKRODT
)
PLC, MALLINCKRODT LLC, AMERICAN
)
ACADEMY OF PAIN MEDICINE,
)
AMERICAN GERIATRIC SOCIETY, AMERICAN
)
PAIN SOCIETY, AMERISOURCEBERGEN
)
CORPORATION, CARDINAL HEALTH, INC.,
)
MCKESSON CORPORATION, PAUL MADISON,
)
and JOSEPH GIACCHINO,
)
)
)
Defendants.
ILLINOIS PUBLIC RISK FUND

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NOTICE OF REMOVAL
PLEASE TAKE NOTICE that, pursuant to 28 U.S.C. §§ 1331, 1441, 1446, and 1367,
Defendant McKesson Corporation (“McKesson”) has removed the above-captioned action from
the Circuit Court of Cook County, Illinois to the United States District Court for the Northern
District of Illinois. As grounds for removal, McKesson states:
I.

NATURE OF REMOVED ACTION
1.

On May 10, 2018, the Illinois Public Risk Fund (“Plaintiff”) filed Illinois Public

Risk Fund v. Purdue Pharma L.P. et al. in the Circuit Court of Cook County. The court assigned
the case Docket No. 2019CH05847.
2.

The Complaint asserts claims against four groups of defendants.

3.

The first group of defendants consists of Purdue Pharma L.P., Purdue Pharma, Inc.,

The Purdue Frederick Company Inc., Rhodes Pharmaceuticals, Cephalon, Inc., Teva
Pharmaceuticals Industries, Ltd., Teva Pharmaceuticals USA, Inc., Allergan PLC, Actavis Kadian
LLC, Actavis Elizabeth, LLC, Watson Pharmaceuticals, Inc., Watson Laboratories, Inc., Actavis
Pharma, Inc., Janssen Pharmaceuticals, Inc., Johnson & Johnson, Inc., Noramco, Inc., OrthoMcNeil-Janssen Pharmaceuticals, Inc., Janssen Pharmaceutica, Inc., Endo Health Solutions, Inc.,
Endo Pharmaceuticals, Inc. d/b/a Endo Generic Products, Par Pharmaceutical Companies, Inc.
d/b/a Par Pharmaceutical, Mallinckrodt, PLC, Mallinckrodt, LLC (collectively, the “Manufacturer
Defendants”). Compl. ¶¶ 26-33.
4.

The second group of defendants consists of the American Academy of Pain

Medicine (“AAPM”), the American Geriatric Society (“AGS”), and the American Pain Society
(“APS”) (collectively, the “Front Group Defendants.”). Compl. ¶¶ 34-36.

2

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5.

The third group of defendants consists of AmerisourceBergen Corporation,

Cardinal Health, Inc., and McKesson Corporation (collectively, the “Distributor Defendants”).
Compl. ¶¶ 37-41.
6.

The fourth group of defendants consists of Paul Madison and Joseph Giacchino

(collectively, the “Prescriber Defendants.”). Compl. ¶¶ 42-44.
7.

The Complaint purports to assert four counts against McKesson and the other

Distributor Defendants: violations of the Illinois Consumer Fraud and Deceptive Business
Practices Act, 815 ILCS 505/2 (Count I), negligence (Count V), public nuisance (Count VI), and
unjust enrichment (Count IX). See Compl. ¶¶ 686-792.
8.

Plaintiff does not assert that federal jurisdiction is lacking. See Compl. ¶¶ 21-23.

9.

Plaintiff pleads, among other things, that Distributor Defendants owe a duty under

federal law “to report suspicious orders of opioids, and not to fill suspicious orders unless and until
due diligence had eliminated the basis for its suspicion[,]” Compl. ¶ 742, and that Distributor
Defendants “breached their duties . . . by filling unreasonably suspect orders over and over again,
without imposing basic controls to monitor, identify, investigate, limit, and report suspicious
orders for opioids.” Id. ¶ 743.
10.

Because the duties governing reporting and shipping “suspicious” opioid orders

arise from the federal Controlled Substances Act (“CSA”), 21 U.S.C. §§ 801, et seq., and its
implementing regulations, Plaintiff pleads that alleged violations of federal law form the basis for
its claims.
11.

McKesson has not responded to the Complaint and has no obligation to do so prior

to being served with the Complaint.

3

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12.

On December 5, 2017, the Judicial Panel on Multidistrict Litigation (JPML) formed

a multidistrict litigation (MDL) and transferred opioid-related actions to Judge Dan Polster in the
Northern District of Ohio pursuant to 28 U.S.C. § 1407. See In re Nat’l Prescription Opiate Litig.,
1:17-MD-2804 (J.P.M.L. Dec. 5, 2017), ECF No. 328. More than 1,800 opioid-related actions are
pending in the MDL, including actions originally filed in this Court.1
13.

McKesson intends to tag this case immediately for transfer to the MDL.

14.

In accordance with 28 U.S.C. 1446(a), copies of the docket sheet and all process,

pleadings, and orders in the state court action are attached as Exhibit A.
II.

TIMELINESS OF REMOVAL
15.

Plaintiff has not yet served the Complaint on McKesson. Accordingly, the 30-day

removal period contemplated by 28 U.S.C. § 1446(b) has not yet begun to run. See Murphy Bros.,
Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 354-56 (1999) (30-day removal period begins
upon service of summons and complaint).
III.

PROPRIETY OF VENUE
16.

Venue is proper in this district under 28 U.S.C. § 1441(a) because the state court

where the suit has been pending is in this district. Filing in the Eastern Division is proper because
this case is removed from Cook County, which is within the Eastern Division of the Northern
District of Illinois.

1

See, e.g., Chicago v. Purdue Pharma L.P. et al., No. 1:14-cv-4361 (N.D. Ill.) (removed from
state court, and transferred to the MDL); Chicago v. Cardinal Health, Inc. et al., No. 1:18-cv-1639
(N.D. Ill.) (filed in federal court and transferred to the MDL); Illinois et al. v. AmerisourceBergen
Drug Corp. et al., No. 3:18-cv-50093 (N.D. Ill.) (same); Rockford v. AmerisourceBergen Drug
Corp. et al., No. 3:18-cv-50092 (N.D. Ill.) (same).
4

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IV.

BASIS OF REMOVAL
17.

Removal is proper pursuant to 28 U.S.C. §§ 1441 and 1331 because Plaintiff’s

claims present a substantial federal question under the CSA.
18.

The original jurisdiction of the district courts includes jurisdiction over “all civil

actions arising under the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331.
19.

“Whether a case arises under federal law for purposes of § 1331” is governed by

the “well-pleaded-complaint rule.” Holmes Grp., Inc. v. Vornado Air Circulation Sys., Inc., 535
U.S. 826, 830 (2002).
20.

Even when state law creates the causes of action, a complaint may raise a

substantial question of federal law sufficient to warrant removal if “vindication of a right under
state law necessarily turn[s] on some construction of federal law.” Merrell Dow Pharm. Inc., v.
Thompson, 478 U.S. 804, 808-09 (1986) (citation omitted); see also Gully v. First Nat’l Bank, 299

U.S. 109, 112 (1936) (“To bring a case within [§ 1441], a right or immunity created by the
Constitution or laws of the United States must be an element, and an essential one, of the plaintiff’s
cause of action.”).2

2

A defendant need not overcome artificial presumptions against removal or in favor of remand. In
Breuer v. Jim’s Concrete of Brevard, Inc., 538 U.S. 691 (2003), the Supreme Court unanimously
held that the 1948 amendments to the general federal removal statute, 28 U.S.C. § 1441(a),
trumped the Court’s prior teachings in Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (1941),
and its antecedents, that federal jurisdictional statutes must be strictly construed against any
recognition of federal subject matter jurisdiction, with every presumption indulged in favor of
remand. Id. at 697-98 (“[W]hatever apparent force this argument [of strict construction against
removal] might have claimed when Shamrock was handed down has been qualified by later
statutory development. . . . Since 1948, therefore, there has been no question that whenever the
subject matter of an action qualifies it for removal, the burden is on a plaintiff to find an express
exception.”) (emphasis added); see also Exxon Mobil Corp. v Allapattah Servs., Inc., 545 U.S. 546,
558 (2005) (construing 1990 enactment of 28 U.S.C. § 1367, authorizing supplemental federal
subject matter jurisdiction, and holding: “We must not give jurisdictional statutes a more expansive
interpretation than their text warrants; but it is just as important not to adopt an artificial
construction that is narrower than what the text provides . . . Ordinary principles of statutory
5

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21.

“[F]ederal jurisdiction over a state law claim will lie if a federal issue is:

(1) necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal
court without disrupting the federal-state balance approved by Congress.” Gunn v. Minton, 568
U.S. 251, 258 (2013); see Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308,
315 (2005). “Where all four of these requirements are met . . . jurisdiction is proper because there
is a serious federal interest in claiming the advantages thought to be inherent in a federal forum,
which can be vindicated without disrupting Congress’s intended division of labor between state
and federal courts.” Gunn, 568 U.S. at 258.
22.

As set forth below, this case meets all four requirements.3

23.

Although Plaintiff ostensibly pleads some of its theories of recovery against

McKesson as state law claims, it bases the underlying theory of liability on McKesson’s alleged
violations of federal law or alleged duties arising out of federal law, specifically the CSA, i.e., that
a portion of its otherwise lawful shipments of prescription opioids were unlawful because they
were shipped in fulfillment of suspicious orders that McKesson allegedly had a duty to identify,
report, and then not ship. See, e.g., Compl. ¶¶ 574-75; 581-82; 743-44; 756.
24.

The source of the asserted legal duty to monitor and report suspicious orders of

controlled substances is the CSA and its implementing regulations. See Compl. ¶ 572, n.153

construction apply.”) (citation omitted).
More recently, a unanimous Supreme Court in Mims v. Arrow Financial Services, LLC held:
“Divestment of district court jurisdiction should be found no more readily than divestment of state
court jurisdiction, given the longstanding and explicit grant of federal question jurisdiction in 28
U.S.C. § 1331.” 565 U.S. 368, 379 (2012) (brackets, citations, and internal quotation marks
omitted).
3
The substantiality inquiry as it pertains to federal question jurisdiction is distinct from the merits
of the case and has no bearing on the strength of Plaintiff’s underlying claims. See Gunn v. Minton,
568 U.S. 251, 260 (2013) (“The substantiality inquiry under Grable looks . . . to the importance of
the issue to the federal system as a whole.”).
6

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(citing 21 U.S.C. §§ 827(a)(3), 1304.21(a) and 1304.22(b) as the source of the duty to “maintain
complete and accurate records of all controlled substances”); Compl. ¶ 573, n.154 (citing 21
U.S.C. § 827(d)(1) and 21 C.F.R. §§ 1304.33(d)-(e) as the source of the duty to “report
. . . controlled substances transactions to the [federal] DEA”); Compl. ¶ 574, n.155 (citing 21
C.F.R. § 1301.74(b) as the source of the duty to “design and operate a system to disclose to the
registrant suspicious orders of controlled substances”).
25.

The source of the asserted legal duty to suspend shipment of suspicious orders is

21 U.S.C. § 823(b) and (e), as interpreted by the Drug Enforcement Administration (“DEA”) of
the United States Department of Justice. Specifically, DEA interprets the public interest factors
for registering distributors under the CSA, 21 U.S.C. § 823(b) and (e), to impose a responsibility
on distributors to exercise due diligence to avoid filling suspicious orders that might be diverted
to unlawful uses. See Masters Pharm., Inc. v. DEA, 861 F.3d 206, 212-13 (D.C. Cir. 2017) (citing
In re Southwood Pharm., Inc., Revocation of Registration, 72 Fed. Reg. 36,487, 36,501, 2007 WL
1886484 (Drug Enf’t Admin. July 3, 2007), as source of DEA’s “Shipping Requirement”). Plaintiff
makes this same allegation in its Complaint. Compl. ¶ 575, n.158 (citing Masters Pharm. for the
source of the federal duty to report, investigate, and halt suspicious orders).
26.

Here, Plaintiff’s theories of liability against McKesson and other Distributor

Defendants, as pled in the Complaint, are predicated on allegations that McKesson and Distributor
Defendants breached alleged duties under the CSA to implement effective controls to detect and
report “suspicious” pharmacy orders for prescription opioids and—crucial to Plaintiff’s claims—
to refuse to ship such orders to Illinois pharmacies.
27.

Specifically, Plaintiff pleads that McKesson and the other Distributor Defendants

violated federal law with, among others, the following allegations:

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a)

“[F]ederal law requires distributors like the Distributor Defendants to

investigate, report, and stop suspicious orders of prescription opioids . . . In creating the Controlled
Substance Act, Congress recognized that distributors are ‘one of the key components of the
distribution chain’ and ‘must be vigilant in deciding whether a prospective customer can be trusted
to deliver controlled substances only for lawful purposes.’” Compl. ¶ 568.
b)

“Prior to the establishment of the DEA, the Bureau of Narcotics and

Dangerous Drugs issued regulations in 1971 in accordance with the objectives of the Controlled
Substances Act. The regulations, among other things, require distributors to maintain complete
and accurate records of all controlled substances transactions, that is, at any point controlled
substances are manufactured, imported, sold, received, delivered, exported, or otherwise disposed
of . . . The regulations also require distributors to report their controlled substances transactions to
the DEA, which monitors the distribution of controlled substances using an automated,
comprehensive reporting system known as the Automation of Reports and Consolidation Orders
System (“ARCOS”).” Compl. ¶¶ 572-73.
c)

“Distributors are also required to ‘design and operate a system to disclose

to the registrant suspicious orders of controlled substances. The registrant shall inform the Field
Division Office of the Administration in his area of suspicious orders when discovered by the
registrant.’ ‘Suspicious’ orders include ‘orders of unusual size, orders deviating substantially from
a normal pattern, and orders of unusual frequency.’” Compl. ¶ 574.
d)

“Commensurate with the obligation to identify and report suspicious orders

is the distributor’s obligation to conduct a meaningful investigation into the customer and the order
in question to resolve the suspicion (i.e., to verify that the order is actually being used to fulfill
legitimate medical needs) before distributing the order. ‘Once a distributor has reported a

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suspicious order, it must make one of two choices: decline to ship the order, or conduct some ‘due
diligence’ and—if it is able to determine that the order is not likely to be diverted into illegal
channels—ship the order.’” Compl. ¶ 575.
e)

“The DEA has also spelled out in detail to Distributor Defendants the

purpose and proper implementation of suspicious order reporting programs in three letters . . . The
September 27, 2006 Letter also provided that ‘in addition to reporting all suspicious orders, a
distributor has a statutory responsibility to exercise due diligence to avoid filling suspicious orders
that might be diverted into other than legitimate medical, scientific, and industrial channels.’”
Compl. ¶¶ 581-83.
f)

“Notwithstanding the ample guidance available, Distributor Defendants

have failed to maintain adequate suspicious order reporting systems. As a result, and as explained
below, Distributor Defendants flooded many communities with opioids, including the
communities surrounding Plaintiff’s members, while consistently failing to report or suspend
suspicious orders.” Compl. ¶ 587.
g)

“In an Administrative Memorandum of Agreement entered into between

McKesson, the DOJ, and the DEA, McKesson acknowledged that, as documented above, it had
not adequately reported suspicious orders of opioids from 2008 to 2013, nor implemented the
monitoring and reporting programs it had agreed to in 2008 . . . [and] that at various times during
the Covered Time Period, [McKesson] did not identify or report to DEA certain orders placed by
certain pharmacies, which should have been detected by McKesson as suspicious in a manner fully
consistent with the requirements set for the 2008 MOA.” Compl. ¶ 619-20.
h)

“Defendants’ unlawful, unfair, and fraudulent business practices include the

filling of suspicious or invalid orders for prescription opioids at both the wholesale and retail level;

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failing to operate an effective system to disclose suspicious orders of controlled substances; failing
to report suspicious orders of controlled substances; failing to reasonably maintain necessary
records of opioid transactions; and deliberately ignoring questionable and/or obviously suspicious
orders and filling them anyway.” Compl. ¶ 699.
i)

“Each Distributor Defendant had a duty . . . to maintain effective controls

against diversion and misuse of prescription opioids, to report suspicious orders of opioids, and
not to fill suspicious orders unless and until due diligence had eliminated the basis for its suspicion.
Distributor Defendants breached their duties to exercise due care in the business of wholesale
distribution of prescription opioids by filling unreasonably suspect orders over and over again,
without imposing basic controls to monitor, identify, investigate, limit, and report suspicious
orders for opioids.” Compl. ¶¶ 742-43.
j)

“As described herein, Defendants have created a continuing public nuisance

in Plaintiff’s member communities through their conduct by creating a medical consensus for
prescribing patterns that have adverse effects on patient welfare, including . . . It was unreasonable
for Distributor Defendants to fail to design and operate a system that would disclose the existence
of suspicious orders and/or fail to report and halt suspicious orders[.]” Compl. ¶¶ 753-56.
28.

In alleging that Distributor Defendants owe a duty to “investigate, report, and stop

suspicious orders of prescription opioids[,]” Compl. ¶ 568, Plaintiff relies on federal law and
Illinois laws that merely references and incorporate federal law. Specifically, Plaintiff cites Illinois
Admin Code § 1510.50(i), which states merely that “[w]holesale drug distributors shall operate in
compliance with applicable federal, state and local laws and regulations.” Compl. ¶ 576. Similarly,
Plaintiff cites the Illinois Controlled Substances Act (“ILCSA”) as requiring distributors to
“provide effective controls and procedures to guard against theft and diversion[,]” see Compl.

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¶ 569 (citing 720 ILCS 570/201 (h)), but those measures are merely routine security requirements
that have no bearing on any alleged duty to report or halt suspicious orders, which forms the basis
for Plaintiff’s theory of liability. Plaintiff does not and cannot identify a state law that specifically
requires wholesale pharmaceutical distributors to “investigate, report, and stop suspicious orders
of prescription opioids.” Compl. ¶ 568. To the extent that the Illinois statute incorporates by
reference the CSA and its implementing regulations pertaining to suspicious orders, any potential
duties to monitor, report or halt suspicious orders could be understood only by interpreting federal
law.
29.

Moreover, Plaintiff’s theory of liability also relies on an expansive reading of

federal law that calls into question an agency determination. Plaintiff alleges not only that
Distributor Defendants should have detected and reported discrete suspicious orders by individual
pharmacies, but that Distributor Defendants should have recognized that the total volume of
prescription opioids distributed to various regions was suspicious or unreasonable. See, e.g.,
Compl. ¶ 621-22 (alleging that McKesson “failed to adequately flag suspicious orders” in part
because it “set customer ‘thresholds’ for opioid orders a inappropriately high levels[,]” and citing
as an example the volume of hydrocone pills delivered to a county in West Virginia.).
30.

To succeed on that theory, Plaintiff would thus have to show that the total quantity

of prescription opioids that Distributor Defendants distributed was unreasonable. However, the
total amount of prescription opioids distributed in any given year turns on annual aggregate
production quotas established by the DEA. Specifically, the DEA must “determine the total
quantity of each basic class of controlled substance listed in Schedule I or II necessary to be
manufactured during the following calendar year to provide for the estimated medical, scientific,
research and industrial needs of the United States, for lawful export requirements, and for the

11

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establishment and maintenance of reserve stocks.” 21 C.F.R. § 1303.11(a). In making this
determination, the DEA must consider “[p]rojected demand” for such substances. 21 C.F.R.
§ 1303.11(b). Thus, to show that the total quantity of prescription opioids that Distributor
Defendants distributed was unreasonable, Plaintiff would have to show that the annual aggregate
production quotas set by the DEA, pursuant to a federal statute, were themselves unreasonable.4
31.

The federal question presented by Plaintiff’s claims therefore is “(1) necessarily

raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal court without
disrupting the federal-state balance approved by Congress.” Gunn, 568 U.S. at 258.
32.

First, Plaintiff’s state law claims “necessarily raise” a federal question because

“[t]he resolution of this case turns on issues of federal law.” Evergreen Square of Cudahy v. Wisc.
Hous. & Econ. Dev. Auth., 776 F.3d 463, 467 (7th Cir. 2015); see also N. Carolina ex rel. N.
Carolina Dep’t of Admin. v. Alcoa Power Generating, Inc., 853 F.3d 140, 146 (4th Cir. 2017)
(“Regardless of the allegations of a state law claim, where the vindication of a right under state
law necessarily turns on some construction of federal law, the claim arises under federal law and
thus supports federal question jurisdiction under 28 U.S.C. § 1331.”) (alteration omitted); Virgin
Islands Hous. Auth. v. Coastal Gen. Constr. Servs. Corp., 27 F.3d 911, 916 (3d Cir. 1994) (“[A]n
action under 28 U.S.C. § 1331(a) arises only if the complaint seeks a remedy expressly granted by
federal law or if the action requires construction of a federal statute, or at least a distinctive policy
of a federal statute requires the application of federal legal principles.”) (emphasis added).

4

Moreover, 21 U.S.C. § 827(d)(1) requires Distributor Defendants to report to DEA “every sale,
delivery or other disposal” by them of prescription opioids. In other words, Distributor Defendants
already report to DEA the total volume of prescription opioids distributed. To succeed on its theory
of liability that Distributor Defendants should have recognized and reported that the total volume
of prescription opioids was unreasonable, Plaintiff would have to show that Distributor
Defendants’ existing reporting to the DEA was inadequate.
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33.

As pled, Plaintiff’s claims against McKesson and the other Distributor Defendants

require Plaintiff to establish that Distributor Defendants breached duties necessarily defined by
reference to federal law, by failing to report and stop shipments of otherwise lawful orders of
controlled substances to Illinois.
34.

For example, in pleading negligence per se, Plaintiff cites to a host of federal and

Illinois laws, claiming that Distributor Defendants “breached their duties to . . . monitor, identify,
investigate, limit, and report suspicious orders for opioids.” Compl. ¶ 742-43 (“Each Distributor
Defendant had a duty under, inter alia, 21 U.S.C. § 801 et seq., 21 C.F.R, § 1301. 74, 720 ILCS
570/303, and Ill. Admin. Code tit. 68, § 1510.50 . . . to report suspicious orders of opioids, and not
to fill suspicious orders unless and until due diligence had eliminated the basis for its suspicion.”).
Notably, Plaintiff appears to acknowledge that the source of the duty to report or halt suspicious
orders is the federal CSA and its implementing regulations, and contends that these federal
obligations are “expressly incorporate[d] . . . into state law[.]”

Id. ¶ 576.

The “express

incorporation of a federal law into the state statute on which the plaintiffs’ cause of action is
grounded” necessarily raises an “embedded federal question,” and “[n]o more is exigible to
surmount the first step of the Grable progression.” Rhode Island Fishermen’s All., Inc. v. Rhode
Island Dep’t Of Envtl. Mgmt., 585 F.3d 42, 49 (1st Cir. 2009); see also NASDAQ OMX Grp., Inc.
v. UBS Sec., LLC, 770 F.3d 1010, 1022 (2d Cir. 2014) (“The Services Agreement incorporates
NASDAQ’s rules by reference, but NASDAQ’s duties to promulgate those rules and then to adhere
to them were dictated by federal law . . . .Thus, UBS’s indemnification claims are reasonably
understood to seek compensation for losses allegedly caused by NASDAQ’s violation of its federal
law duties . . . [and] necessarily raise disputed issues of federal law.”) (citations omitted); Gilmore
v. Weatherford, 694 F.3d 1160, 1173 (10th Cir. 2012) (“[Plaintiffs] contend that Oklahoma

13

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personal property law includes and incorporates the federal requirement for purposes of the
conversion claim. To win under this particular theory of conversion, plaintiffs must show that the
Secretary’s advance approval is required under federal law . . . . Accordingly, the conversion claim
necessarily raise[s] a stated federal issue.” (internal citations omitted)); Broder v. Cablevision Sys.
Corp., 418 F.3d 187, 195 (2d Cir. 2005) (“The first part of the test is clearly met [because] Broder’s
claim that Cablevision breached a contract term consisting of § 543(d) incorporated by reference
. . . necessarily raise[s] the issue of whether Cablevision violated § 543(d).” (internal citations
omitted)).
35.

In pleading public nuisance, Plaintiff claims that “Distributor Defendants

intentionally and/or recklessly distribut[ed] and [sold] prescription opioids that they knew, or
reasonably should have known, would be diverted to illegal and/or unapproved uses while illegally
failing to put appropriate controls in place[.]” Compl. ¶ 753. As Plaintiff makes clear, the
“appropriate controls” that Distributor Defendants allegedly failed to implement consist of the very
same “system that would disclose the existence of suspicious orders and/or fail to report and halt
suspicious orders, as required by the ICSA . . . and the CSA.” Compl. ¶ 756. As to the ICSA,
Plaintiff cites 720 ILCS 570, which simply incorporates requirements from the federal CSA.
Plaintiff’s public nuisance claim, which is predicated on this duty that “derives directly from
federal law,” thus necessarily raises disputed issues of federal law. NASDAQ, 770 F.3d at 1022.
36.

Although Plaintiff “may avoid federal jurisdiction by exclusive reliance on state

law,” Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987) (emphasis added), Plaintiff here
alleges violations of federal law as the basis for its state-law claims.5 The Complaint necessarily

5

It is not necessary for federal jurisdiction that McKesson establish that all of Plaintiff’s counts
against it raise a federal question. Even if Plaintiff could prove one or more of those counts without
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raises a federal issue—namely, whether Distributor Defendants violated the CSA by failing to
report, prevent, or halt suspicious orders for prescription opioids.
37.

As noted, the Complaint also raises a federal issue because it implicates the actions

of a federal agency. See Empire Healthchoice Assur., Inc. v. McVeigh, 547 U.S. 677, 700 (2006)
(“The dispute [in Grable] centered on the action of a federal agency (IRS) and its compatibility
with a federal statute, the question qualified as ‘substantial,’ and its resolution was both dispositive
of the case and would be controlling in numerous other cases.”). Specifically, while Plaintiff
alleges that the total volume of prescription opioids distributed by Distributor Defendants was
unreasonable or suspicious, that figure turns on production quotas set by the DEA. Plaintiff’s
theory of liability thus calls into question the validity of the DEA’s determinations under federal
law. See Bd. of Comm’rs of the Se. Louisiana Flood Prot. Auth.-E. v. Tennessee Gas Pipeline Co.,
29 F. Supp. 3d 808, 862 (E.D. La. 2014) (“While Plaintiff may not be expressly challenging a
specific action of a federal agency, the breadth of Plaintiff’s claims amounts to a collateral attack
on an entire regulatory scheme.”); McKay v. City & Cty. of San Francisco, 2016 WL 7425927, at
*4 (N.D. Cal. Dec. 23, 2016) (concluding that complaint necessarily raises federal issue where
“plaintiffs’ claims are ‘inescapably intertwined’ with a collateral attack on an [agency] order”).
38.

Second, this federal issue is “actually disputed” because the parties disagree as to

the scope and existence of alleged duties arising under the CSA and whether Distributor

establishing a violation of federal law, this Court still has federal question jurisdiction: “Nothing
in the jurisdictional statutes suggests that the presence of related state law claims somehow alters
the fact that [the] complaints, by virtue of their federal claims, were ‘civil actions’ within the
federal courts’ ‘original jurisdiction.’” Chicago v. Int’l C. of Surgeons, 522 U.S. 156, 166 (1997).
Because the Court has original jurisdiction over at least one count, it has supplemental jurisdiction
over Plaintiff’s remaining counts against McKesson and the other Distributor Defendants, which
are so related that they “form part of the same case or controversy.” 28 U.S.C. § 1367(a).
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Defendants violated duties that, as Plaintiff pleads them, arise only under the CSA. Indeed, this
federal issue is the “central point of dispute.” Gunn, 568 U.S. at 259.
39.

Third, the federal issue presented by Plaintiff’s claims is “substantial.” “The

substantiality inquiry under Grable looks . . . to the importance of the issue to the federal system
as a whole.” Gunn, 568 U.S. at 260. Among other things, the Court must assess whether the
federal government has a “strong interest” in the federal issue at stake and whether allowing state
courts to resolve the issue will “undermine the development of a uniform body of [federal] law.”
Id. at 260-62 (internal citations omitted). As the Supreme Court explained in Grable, “[t]he
doctrine captures the commonsense notion that a federal court ought to be able to hear claims
recognized under state law that nonetheless turn on substantial questions of federal law, and thus
justify resort to the experience, solicitude, and hope of uniformity that a federal forum offers on
federal issues.” 545 U.S. at 312.
40.

Plaintiff’s theories of Distributor Defendants’ liability necessarily require that a

court determine the scope and existence of Distributor Defendants’ obligations under federal law
because regulation of controlled substances is first and foremost federal regulation. See Compl.
¶ 74 (“Because of their potent analgesic and euphoric effects, along with the high potential for
addiction . . . prescription opioids like oxycodone and hydrocodone have been classified as
Schedule II narcotics under the federal Controlled Substances Act. 21 C.F.R. § 1308.12.”). Indeed,
Congress designed the CSA with the intent of reducing illegal diversion of controlled substances
“while at the same time providing the legitimate drug industry with a unified approach to narcotic
and dangerous drug control.” H.R. Rep. No. 1444, 91st. Cong. (2nd Sess. 1970), as reprinted in
1970 U.S.C.C.A.N. 4566, 4571-72 (emphasis added).

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41.

Plaintiff’s theories of Distributor Defendants’ liability thus “involve aspects of the

complex federal regulatory scheme applicable to” the national prescription drug supply chain,
Broder v. Cablevision Sys. Corp., 418 F.3d 187, 195 (2d Cir. 2005), and are “sufficiently
significant to the development of a uniform body of [controlled substances] regulation to satisfy
the requirement of importance to the federal system as a whole,” NASDAQ, 770 F.3d at 1024. The
CSA itself notes that “illegal importation, manufacture, distribution, and possession and improper
use of controlled substances have a substantial and detrimental effect on the health and general
welfare of the American people” and that “[f]ederal control of the intrastate incidents of the traffic
in controlled substances is essential to the effective control of the interstate incidents of such
traffic.” 21 U.S.C. § 801. Furthermore, “minimizing uncertainty over” reporting obligations under
the CSA “fully justifies resort to the experience, solicitude, and hope of uniformity that a federal
forum offers on federal issues.” New York ex rel. Jacobson v. Wells Fargo Nat’l Bank, N.A., 824
F.3d 308, 317-18 (2d Cir. 2016) (alteration and citation omitted); Rhode Island Fishermen’s All.,
Inc, 585 F.3d 42, 51 (1st Cir. 2009) (noting, in a case involving state law claims arising out of the
implementation of an interstate fisheries compact, “there is a substantial federal interest in ensuring
that actions taken in pursuance of the Management Act receive the uniformity of interpretation
that a federal forum offers.”).
42.

Plaintiff’s attempt to enforce the CSA raises a substantial federal question even

though the CSA does not provide for a private right of action. In 2005, in Grable, the Supreme
Court held that lack of a federal cause of action does not foreclose federal question jurisdiction.
The Court stated that applying Merrell Dow too narrowly would both “overturn[ ] decades of
precedent” and “convert[ ] a federal cause of action from a sufficient condition for federal question
jurisdiction into a necessary one.” Grable, 545 U.S. at 317; see also, e.g., Ranck v. Mt. Hood

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Cable Reg. Comm’n, No. 3:16-cv-02409-AA, 2017 WL 1752954, at *4-*5 (D. Or. May 2, 2017)
(state law claims based on violations of Cable Communications Policy Act raise substantial federal
questions and satisfy Grable even though no private right of action exists under Act).
43.

Removal is particularly appropriate here because Plaintiff’s action is but one of

more than two thousand similar actions nationwide, of which more than 1,800 are pending in the
MDL in the Northern District of Ohio. Indeed, Plaintiff alleges that opioid use and addiction is
not merely a local issue, but a “national [] public health crisis.” Compl. ¶ 9. The MDL judge,
Judge Polster, is attempting to achieve a national solution to this nationwide problem.6
44.

Fourth, and finally, the federal issue also is capable of resolution in federal court

“without disrupting the federal-state balance approved by Congress.” Gunn, 568 U.S. at 258.
Federal courts exclusively hear challenges to DEA authority to enforce the CSA against
pharmaceutical distributors, and litigating this case in a state court runs the risk of the state court
applying federal requirements inconsistently with the manner in which the federal agency tasked
with enforcing the CSA—the DEA—applies them. Federal jurisdiction is further warranted given
the hundreds of similar actions pending in the MDL, which “in the aggregate . . . have the potential
to substantially influence the scope and success” of the federal statutory scheme to regulate
controlled substances. Evergreen Square of Cudahy, 776 F.3d at 468. “Accordingly, the federal
government has a strong interest in these issues being decided according to uniform principles[,]”
which “will best be achieved by allowing suit in federal courts.” Id.

6

Less than two months after the MDL was created, Judge Polster convened the first day-long
settlement conference on January 31, 2018. Judge Polster required attendance by party
representatives and their insurers and invited state attorneys general and representatives of the
DEA and FDA.
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45.

In summary, removal of this action is appropriate because Plaintiff’s “state-law

claim[s] 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.” Grable, 545 U.S. at 314; see also, e.g., Evergreen Square of Cudahy,
776 F.3d at 467-68 (state law claims alleging defendants’ breached a contract for Section 8 housing
by failing to approve rent increases satisfy Grable, raising issues that the “federal government has
a strong interest in . . . being decided according to uniform principles.”); New York ex rel.
Jacobson, 824 F.3d at 315-18 (state law claims based on defendant’s alleged violation of Internal
Revenue Code satisfy Grable); NASDAQ, 770 F.3d at 1031 (state law claims premised on
violations of Exchange Act “necessarily raise disputed issues of federal law of significant interest
to the federal system as a whole”); Gilmore v. Weatherford, 694 F.3d 1160, 1176 (10th Cir. 2012)
(“Although plaintiffs could lose their conversion claim without the court reaching the federal
question, it seems that they cannot win unless the court answers that question. Thus, plaintiffs’
‘right to relief necessarily depends on resolution of a substantial question of federal law.’”)
(citation omitted); Broder, 418 F.3d at 196 (state law claims premised on cable provider’s alleged
violations of Communication Act’s uniform rate requirement satisfy “Grable test for federal
question removal jurisdiction”).
46.

To the extent that the Court determines that some, but not all, of Plaintiff’s claims

state a substantial federal question, the Court can evaluate whether to retain the non-federal claims
against the Manufacturer Defendants and Distributor Defendants under the doctrine of
supplemental jurisdiction. 28 U.S.C. § 1367(a).

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V.

OTHER REMOVAL ISSUES
47.

Although the Circuit Court of Cook County docket indicates that no defendant has

yet been served, service is not a prerequisite for removal. See, e.g., Novak v. Bank of New York
Mellon Trust Co., N.A., 783 F.3d 910, 912 (1st Cir. 2015) (“A defendant may remove a state-court
action to federal court any time after the lawsuit is filed but before the statutorily-defined period
for removal ends.”); Whitehurst v. Wal-Mart, 306 Fed. Appx. 446, 448 (11th Cir. 2008)
(“[N]othing in the removal statute, or any other legal provision, requires that a defendant be served
with the complaint before filing a notice of removal.”); Delgado v. Shell Oil Co., 231 F.3d 165,
177 (5th Cir. 2000).
48.

By filing this Notice of Removal, McKesson does not waive any available defense

and expressly reserves all such defenses, including those related to personal jurisdiction and
service of process.
49.

If any question arises as to propriety of removal to this Court, McKesson requests

the opportunity to present a brief and oral argument in support of its position that this case has
been properly removed.
50.

Pursuant to 28 U.S.C. § 1446(d), McKesson will promptly file a copy of this

Notice of Removal with the clerk of the state court where the lawsuit has been pending and serve
notice of the filing of this Notice of Removal on Plaintiff.
51.

McKesson reserves the right to amend or supplement this Notice.

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WHEREFORE, McKesson removes this action, pending in the Circuit Court of Cook
County, Docket No. 2019CH05847, to this Court.
May 13, 2019

/s/ Daniel L. Stanner
Daniel L. Stanner
Kyle A. Cooper
TABET DIVITO & ROTHSTEIN LLC
209 S. LaSalle Street, 7th Floor
Chicago, IL 60604
Telephone: (312) 762-9450
Facsimile: (312) 762-9451
dstanner@tdrlawfirm.com
kcooper@tdrlawfirm.com
Attorneys for McKesson Corporation

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