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IN RE ZYPREXA PRODUCTS LIABILITY LITIGATION

July 1, 2005.

In re: ZYPREXA PRODUCTS LIABILITY LITIGATION. STATE OF LOUISIANA, ex rel. CHARLES C. FOTI, JR., ATTORNEY GENERAL, Plaintiff,
v.
ELI LILLY AND COMPANY, INC., et al., Defendants. CHARLES FOTI, ATTORNEY GENERAL, ex rel., STATE OF LOUISIANA, Plaintiff, v. ELI LILLY AND COMPANY, INC., et al., Defendants.



The opinion of the court was delivered by: JACK WEINSTEIN, Senior District Judge

MEMORANDUM & ORDER

I. Introduction

These cases are brought by the state of Louisiana to obtain reimbursement for payments made with its own funds and federal funds in its Medicaid programs for Zyprexa, a drug manufactured by defendant, Eli Lilly and Company, Inc. ("Eli Lilly"). The drug was allegedly prescribed and used for "off-label" purposes — i.e., to treat diseases for which it was not primarily designed and authorized. Motions by the defendants to dismiss and by the plaintiff to remand are denied.

  II. Motion to Dismiss

  Defendants move to dismiss on the following grounds:
1. Private Counsel did not have express or implied authority to file these suits [on behalf of the State of Louisiana];
2. Private Counsel's arrangement with the Attorney General is a contingency fee agreement, . . . prohibited under Louisiana law [since it] violates the separation of powers provisions of the Louisiana Constitution;
3. Even if a contingency fee arrangement were lawful, the arrangement between private counsel and the Attorney General does not meet the requirements of Louisiana law for professional services contracts between state agencies and outside counsel; and
4. The arrangement between Private Counsel and the Attorney General has not been approved by the Louisiana Office of Contractual Review, and is therefore unenforceable.
Not. of Mot. to Dismiss at 2.

  The capacity of the Attorney General to employ counsel is not contestable. His authority to authorize payment of counsel is a question of Louisiana law. Counsel, not defendants, bear the risk of nonpayment of fees. If the cases result in a recovery this court will consider authorizing fees, at which time it will revisit the Louisiana law on fees.

  The motion to dismiss is denied.

  III. Motion to Remand to Federal Court

  Defendants move to remand the cases to the United States District Court for the Western District of Louisiana. Discovery and settlement negotiations are in progress. A remand would be premature. It would frustrate the purpose of the MDL procedures which are designed to prevent unnecessary duplicative discovery work by transferor courts.

  The motion to remand to the federal district court in Louisiana is denied, with leave to renew.

  IV. Motion to Remand to State Court

  A. Federal Question Jurisdiction

  Plaintiff claims that this court is without jurisdiction to hear the cases because the complaints do not present a federal question. It moves to remand the cases to the state court from which they were removed by defendants.

  Defendants suggest that a recent Supreme Court case has resolved the question against plaintiff. See Grable & Sons Metal Prods., Inc. v. Darue Eng'g & Mfg., 125 S.Ct. 2363, 2366 (2005) ("We granted certiorari . . . to resolve a split within the Courts of Appeals on whether Merrell Dow Pharmaceuticals v. Thompson, 478 U.S. 804 (1986), always requires a federal cause of action as a condition for exercising federal ...


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