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Lott v. Pfizer

August 2, 2006


The opinion of the court was delivered by: Reagan, District Judge


In early 2005, four Illinois citizens filed a putative class action suit in the Circuit Court of Madison County, Illinois against Pfizer. They alleged that Pfizer actively concealed information regarding the health hazards of two medications -- Celebrex and Bextra -- so that Pfizer could charge a higher price than the drugs' true market value. Plaintiffs claimed that these actions violated the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS § 505/1, et seq., and similar consumer protection statutes in other states.

Plaintiffs sought to recover damages representing the difference between the price charged for the drugs and the fair market value the drugs would have had but for Pfizer's misrepresentations and omissions. In addition to these compensatory damages, Plaintiffs requested statutory treble damages, fees, costs, and interest. They did not seek any injunctive relief .

Pfizer removed the action to this Court in April 2005, invoking subject matter jurisdiction under the federal diversity statute (28 U.S.C. § 1332) and the 2005 amendments to that statute, found in the Class Action Fairness Act (Pub. L. No. 109-2, 119 Stat. 4, "CAFA").

On threshold review in April 2005, the Court rejected the CAFA-based jurisdictional argument but solicited briefs on the amount in controversy, to determine whether jurisdiction otherwise lay under § 1332. In May 2005, this Court answered that question in the negative, concluding:

Considering the relief requested in the complaint, the relief recoverable under the Illinois Consumer Fraud Act, and the rule against aggregation, the Court cannot conceive how the damages for any one of the named Plaintiffs here could exceed $75,000. As the Seventh Circuit remarked in Brand Name, 123 F.3d at 607: "you would have to buy an awful lot of expensive drugs to run up a bill the overcharge portion of which alone was more than [the amount in controversy]."

Stated simply, the record before this Court does not indicate (and Pfizer has not demonstrated) that amount in controversy exceeds $75,000, exclusive of interest and costs. Jurisdiction does not lie under the federal diversity statute, 28 U.S.C. § 1332.

The May 2005 Order granted Plaintiffs' remand motion and ordered Pfizer to pay Plaintiffs' costs and actual expenses of removal, pursuant to 28 U.S.C. § 1447(c) and Seventh Circuit law instructing district courts to award costs and expenses under § 1447(c) as "normal incidents of remand for lack of jurisdiction." Citizens for a Better Environment v. Steel Co., 230 F.3d 923, 927 (7th Cir. 2000), cert. denied, 532 U.S. 994 (2001). The undersigned District Judge added that if any dispute arose regarding payment of those costs/expenses (due by July 1, 2005), it would be handled by the Magistrate Judge assigned to this case -- the Honorable Clifford J. Proud.

Questions arose almost immediately. Pleadings were filed addressing this issue, and the July 1, 2005 deadline quickly passed. Judge Proud ordered Plaintiffs to submit a revised statement of costs/expenses by December 16, 2005 and ordered Pfizer to remit payment to Plaintiffs by December 30, 2005.

Nine days before the December 30th deadline, Pfizer moved to vacate the original Order awarding costs/expenses or, alternatively, to reduce the amount awarded. The undersigned District Judge handled the first part of the motion, and Magistrate Judge Proud handled the second.

In support of the request to vacate the May 2005 award, Pfizer relied on a December 7, 2005 United States Supreme Court case, Martin v. Franklin Capital Corp., 125 S.Ct. 1941 (2005). See Doc. 20. The undersigned District Judge denied the motion to vacate the award on December 22, 2005, explaining that (a) the award was based on then-governing Seventh Circuit precedent, and (b) the new Supreme Court decision did not appear to be retroactive to awards imposed seven months before that decision was announced. See Doc. 21.

On December 29, 2005, Magistrate Judge Proud ordered additional briefs to be filed on the portion of Pfizer's motion which sought to reduce the award. See Doc. 22.

Before filing its brief as directed by Judge Proud, Pfizer filed a motion to reconsider the fee award on January 5, 2006. The undersigned Judge denied that motion the following day. See Docs. 23, 24. Pfizer next filed a reply brief on the fee reduction issue still pending before Magistrate Judge Proud. See Doc. 26. Ten days later, and before Magistrate Judge Proud had issued a ruling on the fee reduction request, Pfizer filed a notice of appeal Confused as to precisely which ruling Pfizer was taking up, the Court directed Pfizer to clarify which Order was being appealed. See Doc. 28. Pfizer explained that it was appealing four Orders, including Judge Reagan's original award of costs/expenses (Doc. 14), Magistrate Judge Proud's Order setting a revised schedule for submission of a statement and payment of the costs/expenses (Doc. 19), Judge Reagan's denial of the motion to vacate the award (Doc. 21), and Judge Reagan's denial of the motion to reconsider the award (Doc. 24).

Ultimately, the United States Court of Appeals for the Seventh Circuitdismissed Pfizer's appeal for lack of subject matter jurisdiction. This was to be expected, as Judge Proud had not yet ruled on Pfizer's motion to reduce the award (i.e., had not "fixed" the amount of the award), and thus the ...

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