# Amicus Curiae Brief — Free v. Abbott Laboratories, Inc.

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 2000
- **Citation:** 529 U.S. 333

## Text

Jan 13 Qeve

~

No. 99-391

In The
Supreme Court of the United States

+

ROBIN FREE AND RENEE FREE,

Petitioners,

ABBOTT LABORATORIES, BRISTOL-MYERS SQUIBB
COMPANY AND MEAD-JOHNSON & COMPANY,

Respondents.

e

On Writ Of Certiorari
To The United States Court Of Appeals
For The Fifth Circuit

S

BRIEF OF THE STATE OF LOUISIANA
AS AMICUS CURIAE
IN SUPPORT OF PETITIONERS

*

JANE BisHoP JOHNSON

Counsel of Record

Louisiana Department of Justice
301 Main Street, Suite 1250
Baton Rouge, LA 70801

(225) 342-2754

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964
OR CALL COLLECT (402) 42-2831

BEST AVAILABLE COPY

TABLE OF CONTENTS

Page

See Gr GOs 6. 005 cee whee Vins éavcccicees i

STATEMENT OF AMICUS INTEREST.............. 1

SUMMARY OF ARGUMENT..................0005- 3

PEE 86s donk zncnsdivesvexdutedé ecdsarinss ws 3
BACKGROUND PROBLEMS WHICH PERVADE

Be EE bcv os cow ekcuseeoopenseusceuunesesces 4

A. No federal original jurisdiction exists in this mat-
ter; therefore no supplementary jurisdiction
GED. nok cin cavic deed octntsepensuvesesssouesies 5

1. Failure to certify a class before removal, Art.
III considerations and before reaching the
merits are fatal to these decisions.......... 5

2. This case could not have been filed originally
in federal court under federal principles of
DF nc kwsbdnetecbsncseeckstntdercth cécptesss 7

B. 28 USCA 1367 does not overrule Zahn or any
other principle of federal law. Indeed, to find
federal jurisdiction in the case, the court was
required to overrule many more principles of law
than just those found in Zahn ................. 14

1. Interpreting a Congressional statute contrary to
Congressional intent is an ultra vires act ..... 14

2. Principles of comity and federalism should
have prevented the lower federal courts from
seizing jurisdiction and collaterally overrul-
Roe LAER BOE. occ cvcccnvescivesvssenes 17

C. The Fifth Circuit’s Determination of State Law
was Erroneous on Federal as Well as State
NN ik. Can caeckb obs aetibcewasecbeueibess 19

ii

TABLE OF CONTENTS - Continued

Page

1. Erroneousness based on federal grounds... 19

2. Erroneousness based on state grounds ..... 21
CONCLUSION .....--scccccceccccceccccccsccceeees 26
APPENDIX .......---ccccccccccccccsccccececeeenees la

iii

TABLE OF AUTHORITIES

Page
Cases:
Albernaz v. U.S., 450 U.S. 333, 101 S.Ct. 1137, 67
SE EP MEE che daccodesbedddspesicsocoesecs 15

Alyeska Pipeline Service Co. v. Wilderness Society,
421 U.S. 240, 95 S.Ct. 1612, 44 L.Ed.2d 141 (1975)..... 8

Amchem Products, Inc. v. Windsor, 521 U.S. 591, 117

S.Ct. 2231, 138 L.Ed.2d 689 (1997) .......... 6, 13, 15
Arizonans for Official English v. Arizona, 520 U.S.
43, 117 S.Ct. 1055, 137 L.Ed.2d 170 (1997)......... 12

Bernhardt v. Polygraphic Co. of America, Inc., 350
U.S. 198, 76 S.Ct. 273, 100 L.Ed. 199 (1956) ..... 2, 21

— Co. v. Van Gemert, 444 U.S. 472, 100 S.Ct.
745,

Ge Re GD Cc cre ccc ccctscccccccccccs 8
California v. ARC America Corp., 409 U.S. 93, 109
S.Ct. 1661, 104 L.Ed.2d 86 (1989)........ 1, 19, 20, 21
Cannon v. University of Chicago, 441 U.S. 677, 99
S.Ct. 1946, 60 L.Ed.2d 560 (1979)...........000005. 15
Carden v. Arkoma Assocs., 494 U.S. 185, 110 S.Ct.
BOER, B68 L.BGOe UST (ISTE)... ccccccccccccccces 7, 16
Caterpillar v. Lewis, 519 U.S. 61, 117 S.Ct. 467, 136
RY SEES cehiccdseccbocdccdhcvevcecccnce 6, 8

City of Chicago v. International College of Su '
22 U.S. 156, 118 S.Ct. 523, 139 L.Ed.2d 525

cadanabdedehe beneddscébeccccacsddcccesccs 8, 18
Comm-Care Corp. v Bishop, 696 So.2d 969 (La. 1997) ..... 9

ey Lighting, Inc. v. State of Missouri, 342 U.S.
1, 72 S.Ct. 405, 98 L.Ed. 469 (1952) .......... 14, 20

iv

TABLE OF AUTHORITIES - Continued

Page
Dumas v. Angus, 635 So.2d 446 (La. App. 2nd Cir.
BIDR. cccccccdvccccccesscccccesscpocéscvcsesscssense 4
Erie v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed.
BORD Gece cccccccesecncececceces 1, 2, 4, 11, 14, 21
Ford v. Murphy Oil USA, Inc., 703 So.2d 542 (La.
BO oc cckccdescdcccccevedocsdancessecusenscscocens 4
Gasperini v. Center for Humanities, Inc., 518 U.S.
415, 116 S.Ct. 2211, 135 L.Ed.2d 659 (1996)........ 13
Georgia v. Penn. R. Co., 324 U.S. 439, 65 S.Ct. 716,
OD LG. BEBE (IDG ac cccccccccesesessencsccescccss 2
Griswold v. State of Connecticut, 381 U.S. 479, 85
S.Ct. 1678, 14 L.Ed.2d 510 (1965)............... 14, 20
Guaranty Trust Co. of New York v. York, 326 U.S. 99,
65 S.Ct. 1464, 89 L.Ed. 2079 (1945).............. 2, 21
Hanna v. Plumer, 380 U.S. 460, 85 S.Ct. 1136, 14
LIGDS © CUBED... ccccccccccccccesesévcsocccess 11, 12
Healy v. Ratta, 292 U.S. 263, 54 S.Ct. 700, 78 L.Ed.
BSED CIGBE) .. cn cccccceccevscsccccccccccesccesscvess 11
Horton v. Liberty Mutual Ins. Co., 367 U.S. 348, 81
S.Ct. 1570, 6 L.Ed.2d 890 (1961)...............545. 11
In re Gas Water Heater Prods. Liab. Litig., 711 So.2d
SEE GLa. BGGED ow ccccccccccccccccescvesevccesens 24, 25
Jenkins v. Waste Management of Louisiana, Inc., 709
So.2d 848 (La. App. 3rd Cir. 1998), writ denied,
Dian 2B, BBB... ccccccccccccccccccccesctsewevccees 24
Kaiser Aluminum & Chem. Corp. v. Bonjorno, 494
U.S. 827, 110 S.Ct. 1570, 108 L.Ed.2d 842 (1990) .... 11
Keith v. United States Fidelity & Guaranty Co., 694
Sadd 169 Ga. BGG) oc iscedccdcccccsvsccovcteseses 10

Vv

TABLE OF AUTHORITIES - Continued

Page
Kellis v. Foster, 523 So.2d 846 (La. 1988).............. y
Landgraf v. USI Film Products, 511 U.S. 244, 114
S.Ct. 1483, 128 L.Ed.2d 229 (1994) ................ 10
LP&L v. United Gas Pipe Line Co., 493 So.2d 1149
Caeh, TR anus caddncéavacubbadddsecacevewas 2, 22, 23
Martin v. Hadix, 119 S.Ct. 1998, 144 L.Ed.2d 347
NP n opccsessecegisscidudcckesivheoastheceteseone 10
Meredith v. Winter Haven, 320 U.S. 228, 64 S.Ct. 7,
SD Cee BH GU 0 0s desccdduccbstdnecadesibctotense 9
Mt. Healthy City School District Board of Education
v. Doyle, 429 U.S. 274, 97 S.Ct. 568, 50 L.Ed.2d
GDS Ges ds svenchosvescccddesctoscsudbatdane sess 13
New Orleans v. Duke, 427 U.S. 297, 96 S.Ct. 2513, 49
es ED GUN She cocendcumieusetnstdsdsecctes 14
Ortiz v. Fibreboard Corp., 119 S.Ct. 2295, 144
Se FO GUE 6 hac cb ncbevedesscosbesdecceceps 6
Quackenbush v. Allstate Ins. Co., 517 U.S. 707, 116
S.Ct. 1712, 135 L.Ed.2d 1 (1996). ............0c00e: 18
Ruhrgas Ag v. Marathon Oil Company, 526 U.S. 574,
119 S.Ct. 1563, 143 L.Ed.2d 760 (1999) ..... 12, 15, 22
Salve Regina College v. Russell, 499 U.S. 225, 111
S.Ct. 1217, 113 L.Ed.2d 190 (1991) ................. 9
Segura v. Frank, 630 So.2d 714 (La. 1994)............ 10
Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 61
S.Ct. 868, 85 L.Ed. 1214 (1941)............ 0.0 eees 11
Shelton v. Chrysler First Financial Services Corp., 676
SODE SEE CHIGEP so vc ccccascosdsavescdcocedvbetsecsts 9

vi

TABLE OF AUTHORITIES - Continued

Page
Snapp v. Puerto Rico, 486 U.S. 592, 102 S.Ct. 3260,
7S LB DS GES CHGERD. «cc ccccscscccccccesccccces 2, 20
State v. American Sugar Refining Co., 138 La. 1005,
ae Se £2 POP eee 2, 24
State v. Bordens, Inc., 684 So.2d 1024 (La. App. 4th
Ge BODE ccccccccccescccccsscceescsedescoseseesss 18
State, ex rel. leyoub v. Brunswick Bowling and Bil-
liards Dover, Inc., 665 So.2d 520 (La. App. 5th
Cir. 1995) writ denied, 667 So.2d 1053 (1996)..... 2, 23
State v. Classic SoftTrim Inc., 663 So.2d 835 (La.
App. 5th Cir. 1995), writ denied, Jan. 26, 1996 ..... 24
State of Connecticut, et al., v. Mylan Laboratories, et
al., Cv. No. 98-3115 (TFH), in the United States
District Court for the District of Columbia...... 3, 18
Steel Co. v. Citizens for a Better Environment, 523 U.S.
83, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998)........ passim
Supreme Tribe of Ben Hur v. Cauble, 225 U.S. 356, 41
S.Ct. 338, 65 L.Ed. 673 (1921)............2- eee eeee 16
U.S. Railroad Ret. Board v. Fritz, 449 U.S. 166, 101
S.Ct. 453, 66 L.Ed.2d 368 (1980). ...............55. 15
Wisconsin Department of Corrections v. Schacht, 524
U.S. 381, 118 S.Ct. 2047, 141 L.Ed.2d 364 (1998) .... 13
STATUTES AND LEGISLATIVE MATERIALS:
Article III, United States Constitution ..... 6, 10, 15, 22
BB UTA BBG cc cccccctscpocccesescoccovesesess passim
WB UBEA, BOGRERD 20 cc coccccccccncccscesscsestvccesees 6

BB UGCA Bac oc cccccccccccccvccccvccvesoseecenes 4,14

Vii

TABLE OF AUTHORITIES - Continued

Page
PT MEE Mv kuocancedhasbuve cauceakes chcxiolioe 5
PT TEE sibs kctcdabdccetcetbeual oie o ee passim
Art. 4 Louisiana Code of Civil Procedure (La.
GSM s URE EdA Mere ndaieendusoubedee ccvaccculls 9, 10
Ge Bs Mae Fb. ddd ans dacdictanavteecctnnas 10
CUDA Tae Be Ss 0 6besk codecs cccshktc cen 9
in sntacecroecccesssdaksielen ue 5
Cs Ger ls es ne cv nckdccdcusnadiccaa cam 5, 9, 11
SM, GER. GR 00 GOD évuindsccdsicdusscendopeakans 18, 23
SR Gas Tee 00 Ro cc pcciisavdascuscbennenren 18, 23

INTEREST OF THE AMICUS CURIAE

The Louisiana Attorney General is statutorily and
constitutionally charged with the duty of enforcing Loui-
siana laws. Thus, ire State of Louisiana, through its
Attorney General, has an important interest in preserving
for Louisiana courts matters of Louisiana law which pro-
foundly affect the economic welfare of its citizens as well
as the Attorney General’s ability to enforce that law in the
manner intended by the Louisiana Legislature and its
courts.

The Free courts’ erroneous interpretations of that law
stand as a significant impediment to that enforcement,
particularly when a rule of substantive law has been
declared operative in Louisiana by federal courts with no
authority to do so. Such an ultra vires act offends princi-
ples of comity and federalism and robs both the Louisi-
ana Legislature and its courts of their sovereign
authorities. In addition, it tends to encourage anticom-
petitive behavior in a state with only limited resources to
fight it.

The matters of whether federal antitrust law pre-
empts state antitrust statutes and whether the federal
policies of Illinois Brick may be used to declare rules of
state law have been litigated previously and decided in
the states’ favor in California v. ARC America. While Loui-
siana does not have an “Illinois Brick repealer” as did the
plaintiff states in that case, according to Erie principles,
Louisiana had no duty to enact one, although antitrust
defendants appear to have been successful in convincing
federal lower courts, but not state courts, otherwise.

The 5th Circuit’s decisions stand in contravention of
other federal and state principles of law as well. No
transcendental body of law outside of any particular state
exists which is obligatory within it unless and until
changed by statute. Erie at 79, 823. (A federal court may
not substantially affect the enforcement of the right as
given by the State. Bernhardt v. Polygraphic Co. of America,
Inc., 350 U.S. 198, 76 S.Ct. 273, 100 L.Ed. 199 (1956);
Guaranty Trust Co. of New York v. York, 326 U.S. 99, 108, 65
S.Ct. 1464, 1469, 89 L.Ed. 2079)); (Federal antitrust law
does not control Louisiana antitrust law. LP&L v. United
Gas Pipe Line Co., 493 So.2d 1149, 1158 (La. 1986)); (The
public policy of a state is to be found in its statutes, and,
when they have not directly spoken, then in the decisions
of the court. In Louisiana, the only authentic and admissi-
ble evidence of public policy of a state on any given
subject is its Constitution, laws, and judicial decisions.
Where the state has spoken through its legislators, there
is no room for speculation as to what the policy of the
state is. State v. American Sugar Refining Co., 138 La. 1005,
1021, 71 So0.137, 142-143 (La. 1916)). (Legislatively enacted
statutes trump policy considerations. State, ex rel. leyoub
v. Brunswick Bowling and Billiards Dover, Inc., 665 So.2d
520, 522 (La. App. 5th Cir. 1995), writ denied).

In addition, the Free decision(s), have caused the
people of Louisiana to be placed in an inferior economic
position among their sister states, a harm frowned upon
by this Court in [Snapp v. Puerto Rico, 486 U.S. 592,
605-606, 102 S.Ct. 3260, 3268, 73 L.Ed.2d 995 (1982); and
in Georgia v. Penn. R. Co., 324 U.S. 439, 65 S.Ct. 716, 89
L.Ed. 1051 (1945)], in this case and in a case now in
litigation by the Attorney General, by placing limits on

Louisiana statutes, not intended by the Louisiana Legisla-
ture or its courts, and by affecting the state’s ability to
obtain full legal redress for serious antitrust violations
perpetrated upon its citizens in The State of Connecticut, et
al., v. Mylan Laboratories, et al., Cv. No. 98-3115 (TFH), in
the United States District Court for the District of Colum-
bia. A copy of that court’s order is presented in the
Appendix.

The Free court expressly sought to teach the Louisi-
ana Legislature and its courts a legally impermissible
lesson in antitrust enforcement by collaterally overruling
Louisiana jurisprudence.

For these reasons, the State of Louisiana, through its
Attorney General, has an important legal stake in this
matter.

S

SUMMARY OF ARGUMENT

No federal original jurisdiction exists in this matter;
therefore, no supplementary jurisdiction exists. The fail-
ure to certify a class in these error-riddled decisions
before removal, before considering Art. III standing and
before reaching the merits, are factors fatal to these deci-
sions. The 5th Circuit failed to realize that a critical
standard for judging if removal is proper is whether the
case could have been filed originally in federal court. 28
USCA 1367 does not overrule Zahn or any other federal
principle of law. The lower courts erred in applying a
Louisiana procedural class action statute to hypothesize
jurisdiction over a technically non-existent class and
thereby, bootstrapping this case into federal court, to

reach its merits. And, once the federal courts seized juris-
diction by overruling principles of federal law, they failed
to apply Louisiana law as intended by its legislature and
courts; they chose, instead, to collaterally overrule Louisi-
ana jurisprudence as well.

e

ARGUMENT

BACKGROUND PROBLEMS WHICH
PERVADE THIS CASE

To find diversity jurisdiction and thus, removal juris-
diction in this matter by using a Louisiana procedural
class action statute (so classified by Louisiana Courts in
Dumas v. Angus, 635 So.2d 446, 451 (La. App. 2nd Cir.
1994) and Ford v. Murphy Oil USA, Inc., 703 So.2d 542, 544
(La. 1997), the 5th Circuit overruled sub-silentio princi-
ples of law contained in the Erie doctrine and its progeny,
now codified at 28 U.S.C. § 1652, as well as numerous
other federal principles of law found in numerous cases
of this Court, and federal statutory law. Similarly, in
reaching its decision that 28 USCA 1367 overruled Zahn,
the 5th Circuit also overlooked cardinal principles of
statutory interpretation and principles of law found in
other pertinent decisions of this Court.

Even if no other statutory law or stare decisis jurispru-
dence were involved, common sense and the plain mean-
ing of words dictate that because supplementary
jurisdiction means jurisdiction in addition to original juris-
diction, supplemental jurisdiction does not and cannot
exist without original jurisdiction.

In addition, the 5th Circuit failed at every try to
grasp the fundamental principles of Louisiana law. And,
to compound its error further, using hypothetical jurisdic-
tion to reach the merits of this state law case, the 5th
Circuit forced the lower court to seize jurisdiction of this
matter, seemingly to collaterally overrule Louisiana cases
adjudicating principles of Louisiana antitrust law. By all
of these acts, the 5th Circuit overstepped its constitu-
tional authority and ruled contrary to its controlling prec-
edent, thus committing what this Honorable Court has
previously termed ultra vires acts.

A. No federal original jurisdiction exists in this mat-
ter; therefore no supplementary jurisdiction exists.

No federal original jurisdiction exists in this matter;
therefore no supplementary jurisdiction exists.

1. Failure to certify a class before removal, before
Art. III considerations and before reaching the
merits are fatal to these decisions

At the outset, it must be noted that at the time of
removal in this matter, no class had been certified, under
either state law or federal law. (Case filed in state court
on 10/14/93, removed on 11/26/93, no class certified as
of 6/21/94, Opinion: Ruling on Motion for Reconsidera-
tion, Plaintiffs’ App. K, at p. 93a). Both State and Federal
Procedural Rules demand class certification before fur-
ther proceedings can begin. [Court certification is prereq-
uisite to further proceedings or dismissal, Art. 593.1 of
the La. C.C.P.) (FRCP Rule 23(a) and (b) require court
certification before further proceedings)]. Without such

court certification, the lower federal courts embarked
upon issuing advisory opinions, which are fatal to the
case at bar. (The federal district court also refused to
certify a settlement class in its attempt to remand this
matter to state court where it properly belongs).

Moreover, because class certification was lacking, no
class existed at the time of removal. Thus, on removal,
amounts in controversy for diversity jurisdiction could
not be based upon a technically non-existent class,
whether under state or federal law.

This Court has already made clear in at least three
cases that class certification issues are logically anteced-
ent to the existence of any Art. III issues, much less
merits issues, and it is appropriate to reach them first.
Amchem Products, Inc. v. Windsor, 521 U.S. 591, 117 S.Ct.
2231, 138 L.Ed.2d 689 (1997); Caterpillar v. Lewis, 519 U.S.
61, 73, 117 S.Ct. 467, 475, 136 L.Ed.2d 437 (1996) (28 USCA
1441(a) requires that the case be fit for federal adjudica-
tion at the time the removal petition is filed); and in Ortiz
v. Fibreboard Corp., 119 S.Ct. 2295, 2397, 144 L.Ed.2d 715
(1999), the propriety of class certification would be
addressed before the issue of Art. III standing).

Thus, it appears that the 5th Circuit circumvented the
controlling precedent in the case at bar by incorrectly
reaching Art. III standing and the merits of the case
without even looking at the propriety of the Louisiana
class. This issue, alone, warrants vacating the lower
courts’ judgments in this matter and remanding the case
to Louisiana state court.

“Hypothetical jurisdiction produces nothing more
than a hypothetical judgment - which comes to the same

—

thing as an advisory opinion, disapproved by this Court
from the beginning.” Steel Co. v. Citizens for a Better Envi-
ronment, 523 U.S. 83, 118 S.Ct. 1003, 1016, 140 L.Ed.2d 210
(1998), citing Muskrat v. U.S., 219 U.S. 346, 362, 31 S.Ct.
250, 256, 55 L.Ed. 246 (1911) and Hayburn’s Case, 2 Dall.
409 (1792).

2. This case could not have been filed originally
in federal court under federal principles of law

Although the issue of original federal jurisdiction
was not presented to this Court by petitioners, the issue
of supplementary jurisdiction cannot be reached properly
without considering it, because it is the foundation of the
latter. It is conferred and invoked by constitutional

authority supported by statutes. No court can proceed
without it.

The failure of parties to urge objections [to diversity
of citizenship] cannot relieve this court from the duty of
ascertaining from the record whether the Circuit Court
could properly take jurisdiction of this suit... The rule
is inflexible and without exception, which requires this
court, of its own motion, to deny its own jurisdiction,
and, in the exercise of its appellate power, that of all
other courts of the United States, in all cases where such
jurisdiction does not affirmatively appear in the record
on which, in the exercise of that power, it is called to act.
Carden v. Arkoma Assocs., 494 U.S. 185, 110 S.Ct. 1015, 108
L.Ed.2d 157 (1990), quoting Mansfield, C. & L.M.R.

Longstanding decisions of this Court make clear that
in a removal case, the issue in subsequent proceedings on
appeal is whether the federal district court would have

had original jurisdiction of the case had it been filed in
that court. City of Chicago v. International College of Sur-
geons, 522 U.S. 156, 118 S.Ct. 523, 529, 139 L.Ed.2d 525
(1997); Caterpillar v. Lewis, 519 U.S. 61, 72, 117 S.Ct. 467,
474-475, 136 L.Ed.2d 437 (1996).

The case at bar could not have been filed originally in
federal court because no plaintiff would have met the
$50,000 (then) jurisdictional amount. This statement is
true because the federal court could not have resorted,
then, to Louisiana procedural law, but would have been
forced to rely entirely on La. R.S. 51:137, pursuant to
Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S.
240, 260 FN 31, 95 S.Ct. 1612, 1623, FN 31, 44 L.Ed.2d 141
(1975), and federal law to determine the amounts in con-
troversy. (In diversity action where the state law is not
counter to a valid federal statute, state law giving a right
to attorneys’ fees should be followed). While the cited
Louisiana substantive law statute awards attorneys’ fees
to successful plaintiffs, it is silent on the method of distri-
bution of those attorneys’ fees in class actions, in this case
technically a non-existent class, thus, a hypothetical one.

On the other hand, the federal principles of the com-
mon fund doctrine as set forth in Boeing Co. v. Van Gemert,
444 U.S. 472, 478, 100 S.Ct. 745, 749, 62 L.Ed.2d 676 (1980),
make clear that in federal court, attorneys fees are
assessed against the entire fund recovered in class
actions, and are spread proportionately among those ben-
efited by the suit. Thus, not even the representative plain-
tiffs could have met the jurisdictional amount and the
suit could not have been filed originally in federal court.

The Free courts erroneously relied on a Louisiana
procedural statute, Art. 595 of the Louisiana Code of Civil
Procedure, to bootstrap the action into the federal courts,
particularly obvious because only a hypothetical class
existed. As noted above, Louisiana courts classify this
statute as procedural, rather than substantive. In so
doing, not only did the courts fail to interpret Louisiana
law properly, they also overlooked or overruled sub-
silentio, principles of federal law as well.

Louisiana law requires that its statutes be applied in
pari materia, a principle of law based on Art. 13 of the
Louisiana Civil Code, which is always followed by Loui-
siana courts. Comm-Care Corp. v. Bishop, 696 So.2d 969 (La.
1997); Shelton v. Chrysler First Financial Services Corp., 676
So.2d 591, 592 (1996); Kellis v. Foster, 523 So.2d 846 (La.
1988).

The 5th Circuit should have examined La. Code of
Civ. Proc. Art. 4 regarding subject matter jurisdiction in
pari materia with Art. 595, because a federal court inter-
preting state law must determine state law “with the aid
of such light is afforded by the materials for decision at
hand, and in accordance with the applicable principles
for determining state law.” Salve Regina College v. Russell,
499 U.S. 225, 111 S.Ct. 1217, 113 L.Ed.2d 190 (1991);
Meredith v. Winter Haven, 320 U.S. 228, 238, 64 S.Ct. 7, 13,
88 L.Ed. 9 (1934).

At the time that the first appeal was decided in this
matter, 1995, Art. 4 provided that except as otherwise pro-
vided by law, the amount in dispute includes attorney’s
fees, for subject matter jurisdiction purposes. This provi-
sion should have waved a red flag because federal law

10

provided the otherwise. FRCP 82 provides that the rules
cannot be interpreted to expand jurisdiction and the fed-
eral rules, in this case, diversity and removal jurisdiction,
must be interpreted with Art. 3 of the United States
Constitution in mind.

Another red flag should have been apparent to the
5th Circuit in its determination that federal original juris-
diction existed. In 1995, Art. 4 of the La. C.C.P. was
amended to now provide that attorney’s fees could not be
used to determine the amount in dispute for subject
matter jurisdiction. This amendment would have been
pending in the Legislature at the time of the 5th Circuit's
first decision and was in effect at the time of both the
second and third. Where the law has changed during the
pendency of a suit and retroactive application of the new
law is permissible, the new law applies on appeal even
though it requires a reversal of a trial court judgment
which was correct under the law in effect at the time it
was rendered. Segura v. Frank, 630 So.2d 714, 725 (La.
1994). Thus, reliance on a Louisiana procedural statute is
a precarious undertaking in Louisiana because, contrary to
federal law, Louisiana law holds that procedural laws
apply both retrospectively and prospectively based upon
Art. 6 of the Civil Code. Keith v. United States Fidelity &
Guaranty Co., 694 So.2d 180, 183 (La. 1997); Segura v.
Frank, 630 So.2d 714, 720-721, (La. 1994).

Federal law holds, on the other hand, that a pre-
sumption exists against retrospective effect and Congres-
sional statutes, i.e., including procedural ones, are given
prospective effect only. Martin v. Hadix, 119 S.Ct. 1998,
2003, 2006, 2008, 144 L.Ed.2d 347 (1999); Landgraf v. USI
Film Products, 511 U.S. 244, 265, 114 S.Ct. 1483, 1497, 128

11

L.Ed.2d 229 (1994); Kaiser Aluminum & Chem. Corp. v.
Bonjorno, 494 U.S. 827, 842-844, 855-856, 110 S.Ct. 1570,
1579-1581, 1586-1587, 108 L.Ed.2d 842 (1990).

The diversity jurisdictional statute, is narrowly con-
strued. Healy v. Ratta, 292 U.S. 263, 270, 54 S.Ct. 700, 703,
78 L.Ed. 1248 (1934). The jurisdictional statute, which is
nationwide in its operation, was intended to be uniform
in its application, unaffected by local law definition or
characterization of the subject matter to which it is to be
applied. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100,
104, 61 S.Ct. 868, 870, 85 L.Ed. 1214 (1941); Horton v.
Liberty Mutual Ins. Co., 367 U.S. 348, 357, 81 S.Ct. 1570,
1575, 6 L.Ed.2d 890 (1961). The Act of Congress must be
construed as setting up its own criteria, irrespective of
local law, for determining in what instances suits are to
be removed from state to federal courts. Shamrock. Hence,
these cases, like the Erie line of cases, prohibit the use of a
local law, like Art. 595 of the La. C.C.P., to determine
federal jurisdiction, particularly, when the class was
merely hypothetical vis-a-vis, lack of certification.

The 5th Circuit should have been further cautioned
against using a state procedural law to determine federal
jurisdiction by the principles of law contained in Hanna v.
Plumer, 380 U.S. 460, 474-475, 85 S.Ct. 1136, 1145, 14
L.Ed.2d 8 (1965), which held directly on point that “to
hold that a Federal Rule of Civil Procedure must cease to
function whenever it alters the mode of enforcing state-
created rights would be to disembowel either the Consti-
tution’s grant of power over federal procedure or Con-
gress’ attempt to exercise that power in the Enabling
Act.” And further, “Erie recognized that there should not
be two conflicting systems of law controlling the primary

12

activity of citizens ...” Id. The foregoing were reasons
given why federal courts sitting in diversity apply federal
procedural rules and state substantive law. Id. at 465,
1141.

“The requirement that jurisdiction be established as
a threshold matter . . . is ‘inflexible and without excep-
tion.’ ” Ruhrgas Ag v. Marathon Oil Company, 526 U.S. 574,
119 S.Ct. 1563, 143 L.Ed.2d 760 (1999) (quoting Steel Co. v.
Citizens for Better Environment, 523 U.S. 83, 119 S.Ct. 1003,
140 L.Ed.2d 210 (1998) and Mansfield, C. & L.M.R. Co. v.
Swan, 111 US. 379, 383, 4 S.Ct. 510, 28 L.Ed. 462 (1884));
for “ ‘jurisdiction is power to declare the law,’” and
“ ‘without jurisdiction the court cannot proceed at all in
any cause.’ ” Id. (quoting Steel Co. and Ex parte McCardle,
7 Wall. 506, 514, 19 L.Ed. 264 (1868)).

Every federal appellate court has a special obligation
to ‘satisfy itself not only of its own jurisdiction, but also
that of the lower courts in a cause under review, even
though the parties are prepared to concede it. Steel Co., at
1003, quoting Mitchell v. Maurer, 293 U.S. 237, 244, 55 S.Ct.
162, 165, 70 L.Ed. 338 (1934). When the lower federal
court lacks jurisdiction, we have jurisdiction on appeal,
not of the merits but merely for the purpose of correcting
the error of the lower court in entertaining the suit.’ Id.,
quoting United States v. Corrick, 298 U.S. 435, 440, 56 S.Ct.
829, 831, 80 L.Ed. 1263 (1936) and Arizonans for Official
English v. Arizona, 520 U.S. 43, 117 S.Ct. 1055, 1071, 137
L.Ed.2d 170 (1997), quoting from Bender v. Williamsport
Area School Dist., 475 U.S. 534, 541, 106 S.Ct. 1326, 1331, 89
L.Ed.2d 501 (1986).

13

For removals that are defective because of lack of
subject matter jurisdiction, remand may take place
without such a motion (to remand) and at any time.
Wisconsin Department of Corrections v. Schacht, 524 U.S.
381, 118 S.Ct. 2047, 141 L.Ed.2d 364 (1998).

Were it in truth a contention that the District Court
lacked jurisdiction, we would be obliged to consider it,
even as we are obliged to inquire sua sponte whenever a
doubt arises as to the existence of federal jurisdiction.
Steel Co. v. Citizens for a Better Environment, 523 U.S. 83,
118 S.Ct. 1003, 140 L.Ed.2d 210 (1998); Mt. Healthy City
School District Board of Education v. Doyle, 429 U.S. 274, 97
S.Ct. 568, 50 L.Ed.2d 471 (1997), quoting Liberty Mutual
Ins. Co. v. Wetzel, 424 U.S. 737, 740, 96 S.Ct. 1202, 1204, 47
L.Ed.2d 435 (1976), and Louisville & Nashville R.Co. v.

Mottley, 211 U.S. 149, 152, 29 S.Ct. 42, 43, 53 L.Ed. 126
(1908).

The federal system is an independent system for
administering justice to litigants who properly invoke its
jurisdiction. Gasperini v. Center for Humanities, Inc., 518
U.S. 415, 432, 116 S.Ct. 2211, 2222, 135 L.Ed.2d 659 (1996).

Fed. Rule Civ. Proc. 82 provides that the rules shall
not be construed to extend . . . the [subject matter] juris-
diction of the United States district courts. Amchem Prod-
ucts, Inc. v. Windsor, 521 U.S. 591, 613, 117 S.Ct. 2231, 2244,
138 L.Ed.2d 689 (1997).

Yet, despite this plethora of long standing Supreme
Court precedent, the federal 5th Cir. Court of Appeal
chose to overrule all of these decisions sub silentio, by
holding instead, in Free v. Abbott Laboratories, 264 F.3d 270,
272 (1999), that “(a)lthough appellants’ argument bears

14

on federal courts’ jurisdiction, this is not an issue that we
will reconsider.”

B. 28 USCA 1367 does not overrule Zahn or any other
principle of federal law. Indeed, to find federal
jurisdiction in the case, the court was required to
overrule many more principles of law than just
those found in Zahn

Using machiavellian analysis, the 5th Circuit in its
first decision, erroneously held that 28 USCA 1367 over-
rules Zahn by interpreting a Congressional statute con-
trary to Congressional intent; that Colorado River
abstention did not apply and reached a bizarre crescendo
in holding that because the representative parties in Free
would be compelled to remain in federal court with the
same claims adjudicated, the interests of comity would
not be served. This forced analysis springs from the fed-
eral courts’ initial errors, inter alia, applying a Louisiana
procedural class action statute to a hypothetical class,
thereby overruling sub-silentio the Erie doctrine, 28
USCA 1652, and FRCP 82.

1. Interpreting a Congressional statute contrary to
Congressional intent is an ultra vires act

In a long litany of cases, this Honorable Court has
made crystal clear that the federal courts do not sit as a
super-legislature to determine the wisdom of legislation
or to decide policy, Day-Brite Lighting, Inc. v. State of
Missouri, 342 U.S. 421, 423, 72 S.Ct. 405, 407, 98 L.Ed. 469
(1952); Griswold v. State of Connecticut, 381 U.S. 479, 482,
85 S.Ct. 1678, 1680, 14 L.Ed.2d 510 (1965); New Orleans v.

15

Duke, 427 U.S. 297, 96 S.Ct. 2513, 2517, 49 L.Ed.2d 511
(1976). Further, courts cannot assume that Congress did
not know what it was doing, as the 5th Circuit expressly
assumed, when it interpreted 28 USCA 1367 as overruling
Zahn. Cannon v. University of Chicago, 441 U.S. 677,
696-697, 99 S.Ct. 1946, 1957-1958, 60 L.Ed.2d 560 (1979);
U.S. Railroad Ret. Board v. Fritz, 449 U.S. 166, 179, 101 S.Ct.
453, 461, FN2, 66 L.Ed.2d 368 (1980); Albernaz v. U.S., 450
U.S. 333, 340, 101 S.Ct. 1137, 1143, 67 L.Ed.2d 275 (1981).

To so interpret a statute expressly against the intent
of Congress, is in itself tantamount to an ultra vires act.
The 5th Circuit noted its awareness that Congress did not
intend to change the jurisdictional requirements of 28
U.S.C.A. 1367 in the 1995 Free decision. Thus, to interpret
it as overruling Zahn, is also tantamount to an ultra vires
act.

Such an act offends fundamental principles of sep-
aration of powers, as does pronouncing upon the mean-
ing of a state statute without jurisdiction, an act
condemned as an act ultra vires in Steel Co. v. Citizens for
a Better Environment, 523 U.S. 83, 118 S.Ct. 1003, 1012,
1016, 140 L.Ed.2d 210 (1998) and Ruhrgas v. Marathon Oil
Co., 526 U.S. 574, 119 S.Ct. 1563, 1569, 143 L.Ed.2d 760
(1999). Further, as held in Amchem Products, Inc. v. Wind-
sor, 521 U.S. 591, 117 S.Ct. 2236, 138 L.Ed.2d 689 (1997),
the federal rules of civil procedure must be interpreted in
keeping with Art. III (Constitution) constraints, with the
Rules Enabling Act, which instructs that the rules of
procedure “shall not abridge, enlarge or modify and sub-
stantive right”, and with FRCP 82 which provides that
the rules shall not be constructed to extend the subject
matter jurisdiction of the United States federal district

16

courts. The 5th Circuit’s interpretation of 28 USCA 1367
extends the jurisdiction of the federal district courts, in
direct contravention of that rule.

Moreover, the 5th Circuit’s ruling means that the
court believes it proper to aggregate claims in the pro-
cedural class action device to determine jurisdiction.
However, in Carden v. Arkoma, 494 U.S. 185, 192, 110 S.Ct.
1015, 1020, 108 L.Ed.2d 157 (1990), this Court held that
“looking to the citizenship of only some of the members
of an artificial entity finds even less in our precedent than
looking to the State of organization” when interpreting
the federal diversity statute. “We have never held that an
artificial entity, sued or being sued in its own name, can
invoke the diversity jurisdiction of the federal courts
based upon the citizenship of some but not all of its
members.”

Similarly, not the plain language of 28 USCA 1367,
Congressional intent, nor this Court’s precedent, allow
the invocation of the diversity jurisdiction of the federal
courts based upon jurisdictional amount being met by
some plaintiffs, but not all, using a state procedural stan-
dard. Consistency requires that the jurisdictional amount
of the matter in controversy be interpreted in the same
manner. Even though a class entity exists, each individual
member should be required to meet the jurisdictional
amount like each must meet the diversity requirement, to
invoke federal diversity jurisdiction.

Defendants’ reliance on Supreme Tribe of Ben Hur v.
Cauble, 225 U.S. 356, 41 S.Ct. 338, 65 L.Ed. 673 (1921) is
misplaced because Ben Hur was filed originally in federal
court, unlike the case at bar which was prematurely

17

removed from state court, and the case contained princi-
ples of federal law, giving the federal courts in that
matter a strong federal interest, again, dissimilar to the
case at bar.

Thus, the 5th Circuit engaged in “hypothetical juris-
diction” to reach the merits of the case. As held in Steel
Company, cited supra at page 1016, the statutory and
(especially) constitutional elements of jurisdiction are an
essential ingredient of separation and equilibration of
powers, restraining the courts from acting at certain
times, and even restraining them from acting perma-
nently regarding certain subjects. For a court to pro-
nounce upon the meaning or the constitutionality of a
state or federal law when it has no jurisdiction to do so is,
by very definition, for a court to act ultra vires.

2. Principles of comity and federalism should have
prevented the lower federal courts from seizing
jurisdiction and collaterally overruling Louisi-
ana

In truth, the federal court for the Middle District of
Louisiana tried to avoid adjudicating this matter. It was
forced to do so by the 5th Circuit’s first appellate deci-
sion. The 5th Circuit erroneously found jurisdiction on
the representative plaintiffs and refused to allow the
lower court to abstain, based again, on faulty use of
authority. The Fifth Circuit held that Colorado River
abstention did not apply because “only exceptional cir-
cumstances, the ‘clearest of justifications’ can suffice
under Colorado River to justify the surrender of federal
jurisdiction,” quoting Moses Cone, 460 U.S. at 25-26, 103

18

S.Ct. at 942. However, unlike the case at bar, in the Cone
case, federal issues of law were present, as this Court
made clear in Quackenbush v. Allstate Ins. Co., 517 U.S. 707,
729, 116 S.Ct. 1712, 1727, 135 L.Ed.2d 1 (1996). Here, there
are none.

This Court has also made crystal clear that 28 USCA
1367(c) discretion is independent from any abstention
doctrine theory which requires district court to abstain or
stay, in City of Chicago, cited supra, at page 534. The case
at bar presented issues of state law in which the impor-
tant state interest could be undermined by inconsistent
rulings from the federal and state courts and those inter-
ests have importance beyond the case. Inconsistent rul-
ings have indeed already occurred. In State v. Bordens,
Inc., 684 So.2d 1024, 1025 (La. App. 4th Cir. 1996), the
facts as stated by the Court reveal that the State filed a
treble damages action based upon a federal criminal
judgment of antitrust bid-rigging, on behalf of school
systems (direct purchasers) and Louisiana school children
(indirect purchasers). The lower court held that the Loui-
siana Monopolies Act allowed such actions. The defen-
dants chose not to appeal this issue.

In State of Connecticut v. Mylan, a multistate antitrust

case in litigation in federal courts, referenced above and -

found in the State’s Appendix, the federal district court
held that La. R.S. 51:128 authorizes Louisiana, through its
Attorney General, to sue for violations of the Monopolies
Act and found that provision to be unlimited in equitable
relief, totally ignoring La. R.S. 51:138 which mandates
that the Attorney General file all actions under the Act
and La. R.S. 51:1414, which grants to the Attorney Gen-
eral the right to pursue any action under any statute

19

available to any other party. The Court found itself
unable, vis-a-vis the Free decision, to follow Louisiana
law and Louisiana jurisprudence. Such a holding, similar
to that of the 5th Circuit, defies logic, reason and common
sense and has no place in a country purporting to follow
the rule of law.

Principles of comity and federalism should have
ruled the day, as well as 28 USCA 1367(c) authorized
discretion.

C. The Fifth Circuit’s Determination of State Law was
Erroneous on Federal as Well as State Law Grounds

The Fifth’s Circuit’s determination of Louisiana law
was erroneous on federal as well as state law grounds.

1. Erroneousness based on federal law grounds

Obviously, the 5th Circuit did not feel competent to
rule on issues of state law as expressed by their
attempted certification of certain issues to the Louisiana
Supreme Court. When that failed, the court decided the
Louisiana indirect purchaser issue along federal grounds,
expressly forbidden by this Court in California v. ARC
America Corp., 409 U.S. 93, 109 S.Ct. 1661, 104 L.Ed.2d 86
(1989). (It is improper to consider Congressional policies
as defining what federal law allows states to do under
their own antitrust law. Nothing in Illinois Brick suggests
it would be contrary to congressional purposes for states
to allow indirect purchasers to recover under their own
laws, at pgs. 102, 1666).

20

Sadly, the 5th Circuit in Free espoused the losing
positions of the California v. Arc America defendants
rather than follow its precedent; thus, overruling it sub-
silentio. The 5th Circuit erred in holding that California
does not advocate increasing penalties on antitrust defen-
dants or maximizing Louisiana plaintiffs’ recovery as
compared wiih federal law remedies. California, in fact
held that based upon the Silkwood v. Kerr-McGee case
neither Congress nor the courts frown upon additional
liability, over and above that authorized by federal law.
(California, at pgs. 105, 1667).

The 5th Circuit further erred by holding that the
Illinois Brick scheme of recovery is preferable to Louisiana
law. A court cannot sit as a super-legislature. Day-Brite
Lighting, Inc. and Griswold, cited supra. Further, as Jus-
tices Brennan, Marshall, Blackmun and Stevens have so
eloquently stated previously in concurrence with the
decision Snapp, cited supra at page 3271, a state is a
sovereign entity, entitled to assess its needs, and decide
which concerns of its citizens warrant its protection and
intervention. I know of nothing - except the Constitution
or overriding federal law — that might lead a federal court
to superimpose its judgment for that of a State with
respect to the substantiality or legitimacy of a State’s
assertion of sovereign interest. Yet, superimposing its
judgment for that of Louisiana was exactly the forbidden
action taken by the Free court.

The 5th Circuit’s clear alternative to avoid such was
discretional refusal to hear the case, a position expressly
advocated in California. Instead, it chose to embark on
issuing advisory opinions through ultra vires acts and
sub-silentio overruling its clear precedent.

21

While Louisiana law does not contain what is popu-
larly known as an Illinois Brick repealer as did the plain-
tiff states in California, because it is not obliged to follow
federal law, the principles of California apply equally to
this matter, pursuant to the principles of Erie. Under Erie
v. Tompkins, 304 U.S. 64, 79, 58 S.Ct. 817, 923, 82 L.Ed.
1188 (1938), no transcendental body of law outside of any
particular State exists which is obligatory within it unless
and until changed by statute. Thus, the 5th Circuit’s focus
should have been on whether the Louisiana Legislature
was obligated to amend its already unlimited antitrust
law. Similarly, a federal court may not substantially affect
the enforcement of a right as given by the state. Bernhardt
v. Polygraphic Co. of America, Inc., 350 U.S. 198, 76 S.Ct.
273, 100 L.Ed. 199 (1956); Guaranty Trust Co. of New York v.
York, 326 U.S. 99, 108, 65 S.Ct. 1464, 1469, 89 L.Ed. 2079
(1945).

Thus, the 5th Circuit’s holdings overruled sub-silen-
tio this Court’s controlling precedent.

2. Erroneousness based on state grounds

The concept of granting a dispensation from liability
to a class of defendants based upon the level of market
participation by plaintiffs is as foreign to Louisiana law
as is granting a dispensation based upon a per se rule of
non-liability. Louisiana tort law speaks of absolute and
strict liabilities. To hold that such a concept rules Louisi-
ana law is to overrule collaterally Louisiana’s Civil Code,
its statutory law and its jurisprudence, and to deny its
very existence as a sovereign entity. Our courts have held
that the plain language of the Louisiana Monopolies Act

22

and its Unfair Trade and Consumer Protection Act must
be given effect by the Courts of this State.

Ultra vires acts of judgment undermine the sovereign
authority of the State of Louisiana as held by its Supreme
Court in Louisiana Power & Light, cited and discussed
infra, and have been disruptive of state efforts to estab-
lish a coherent policy with respect to a matter of substan-
tial public concern. Further, these ultra vires acts are
forbidden by Art. III concerns as noted by this Court in
Steel and Ruhrgas, cited infra. The 5th Circuit failed to
analyze state law according to state principles.

The 5th Circuit erroneously held that Louisiana Power
& Light v. United Gas Pipeline Co, 493 So.2d 1149 (La. 1986)
was distinguishable from its case at bar. The situation is
exactly the same in Free as in LP&L, the existence of
controlling Louisiana court precedent, which keeps the
particular principle of federal antitrust law from applying
in Louisiana. To reach the conclusion that indirect pur-
chasers cannot recover under Louisiana law, in the face of
LP&L, no other explanation seems justified, except that,
the 5th Circuit collaterally and sub-silentio overruled
important principles of Louisiana law and its jurispru-
dence.

The 5th Circuit court erroneously held that LP&L
held only that the federal interpretation of federal anti-
trust law has a persuasive effect on Louisiana law. To stop
at this juncture was to overrule the case sub-silentio and
collaterally. The LP&L Louisiana Supreme Court, in fact,
held at pages 1157, 1160 that while persuasive, the federal
law is not controlling and refused to apply to Louisiana
antitrust law, a then recent decision of the United States

23

Supreme Court in Copperweld Corp. v. Independence Tube
Corp., 467 U.S. 752, 104 S.Ct. 2731, 81 L.Ed.2d 628 (1984).
A significant and fatal gap exists in the 5th Circuit's
version.

The 5th Circuit further erroneously held that the
issue of the plain meaning of the remedy statute while
“superficially formidable,” can be overcome with federal
policy considerations. However, the Louisiana Supreme
Court held in LP&L, at page 1154, that appropriate statu-
tory analysis begins with an examination of the language
of the statute and that La. R.S. 51:122 is sweeping in its
breadth. Words and phrases shall be read with their con-
text and shall be construed according to the common
usage. And at page 1159, this Court does not choose,
... an inflexible approach which adopts a per se rule of
noniiability . . . Such a choice would run counter to the
Legislature’s intent in enacting the antitrust legislation
and divest our courts of the authority which reposes in
them by virtue of this legislation.

An indirect purchaser exclusion from the broad
sweep of the Louisiana antitrust law would be a per se
rule of nonliabilty exactly like the kind the Court has
been so eloquent in condemning and refusing to apply in
Louisiana. Thus, either the 5th Circuit overruled LP&L
collaterally and sub-silentio, or its principles were simply
beyond the court’s perception. Either way, the 5th Cir-
cuit’s error-riddled decisions should be vacated.

The in pari materia rule of legislative construction
further requires that Louisiana’s Unfair Trade and Con-
sumer Protection Act, which is a statute having the same
purpose as the Louisiana Monopolies Act, be read in

24

conjunction with the latter, because it forbids unfair com-
petition as well. The former act expressly allows con-
sumers, or indirect purchasers, to recover for unfair
methods of competition. Thus, the plain language of both
statutes expressly allow indirect purchaser actions, and
must be given effect by the Courts of this State. State v.
Classic Soft Trim, Inc., 663 So.2d 835 (La. App. 5th Cir.
1995), writ denied, Jan. 26, 1996.

Besides superimposing its judgment over Louisiana’s
LP&L decision, the 5th Circuit also overruled other deci-
sions of Louisiana courts to reach its erroneous conclu-
sions regarding Louisiana law. In State, ex rel. leyoub v.
Brunswick Bowling Dover, Inc., 665 So.2d 520, 522 (La. App.
5th Cir. 1995), writ denied, 667 So.2d 1053 (1996), the
Louisiana appellate court held that Louisiana statutes
trump policy considerations. In State v. American Sugar
Refinery, Inc, 238 La. 1005, 1021, 71 So. 137, 142-143 (La.
1916), the Louisiana Supreme Court held that the only
authentic and admissible evidence of the public policy of
a state on any given subject are its Constitution, laws, and
judicial decisions. In Jenkins v. Waste Management of Loui-
siana, Inc., 709 So.2d 848 (La. App. 3rd Cir, 1998), writ
denied, May 15, 1998, the Louisiana appellate court held
that Louisiana jurisprudence leaves no question but that
restraints to free trade shall not be tolerated under any
guise. And see analysis of State v. Bordens, Inc., discussed
supra at page 18., regarding indirect purchaser status of
Louisiana school children as indirect purchasers allowed
right to recovery.

Thus, to hold that Louisiana indirect purchasers have
no right to recovery in the face of this jurisprudence, is to
overrule the cases both collaterally and sub-silentio.

25

In addition, in the second Free ruling to justify the
first, the 5th Circuit held that the law of the case doctrine
granted it a dispensation from redetermining original
jurisdiction. The 5th Circuit, then, attempted to use, a
Louisiana decision, In re Gas Water Heater Prods. Liab.
Litig., 711 So.2d 264 (La. 1998), ignoring federal jurispru-
dence, to justify its seizure of jurisdiction. The problem,
however, is that even if federal law would allow such,
which it does not, it appears that the 5th Circuit com-
pletely misunderstood the text of the cases and principles
of law involved.

The 5th Circuit held, that Gas Water Heater “rein-
forced” its position that it could exercise subject matter
jurisdiction, because the Louisiana Appellate Court dis-
tinguished the Free case in making its ruling. The Louisi-
ana appellate position held that in a class action, claims
could not be aggregated for jurisdictional purposes, fol-
lowing the federal rule of Zahn, and (failing to follow the
5th Circuit’s). The case further noted that the federal
court for the Eastern District of Louisiana limited the
holding in Free. (This jurisprudence does not support the
5th Circuit’s position).

The Louisiana Supreme Court rejected this position
and held the opposite, that, contrary to federal law, such
class action claims could be aggregated for jurisdictional
purposes, to keep the matter out of a court of limited
jurisdiction peculiar to the Jefferson Parish Louisiana
court system. The court reasoned that a class action is nct
a series of individual claims, but rather is merely the
claim of one entity, the class. This position also fails to
support the 5th Circuit’s because the controlling federal
decisions hold that subject matter jurisdiction must be

26

decided on federal grounds, regardless of state law. Loui-
siana law has never held that individual claims could not
be aggregated for jurisdictional purposes. Thus, another
conflict exists between state and federal laws.

Finally, alluding to HMC Management Corp. v. New
Orleans Basketball Club, 375 So.2d 700, 706-07 (La.App. 4th
Cir. 1979), was improper as well, because that decision
was influenced by Flood v. Kuhn, 407 U.S. 258, 92 S.Ct.
2099, 32 L.Ed.2d 728 (1972), which adjudicated the “base-
ball exemption to the antitrust laws.”

CONCLUSION

For all of the foregoing reasons, the judgment of the
5th Circuit should be reversed in its entirety.

Respectfully submitted,

Ricwarp P. Ievous
Attorney General of Louisiana

*JANE BisHop JOHNSON
Assistant Attorney General

Louisiana Department of Justice
301 Main Street, Suite 1250
Baton Rouge, LA 70801
(225) 342-2754
Counsel! for Amicus

State of Louisiana

* Counsel of Record
January 13, 2000

APPENDIX

la

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

FEDERAL TRADE
COMMISSION,

Plaintiff,
v.

MYLAN
LABORATORIES, INC.,
CAMBREX CORP.,
PROFARMACO S.R.L.,
and GYMA
LABORATORIES OF
AMERICA, INC.,

Defendants.

Cv. No. 98-3114 (TFH)

THE STATE OF
CONNECTICUT, et al.,

Plaintiffs,
v.

MYLAN
LABORATORIES, INC.,
CAMBREX CORP.,
PROFARMACO S.R.L.,
GYMA LABORATORIES
OF AMERICA, INC.,
and SST CORP.,

Defendants.

Cv. No. 98-3115 (TFH)
(Filed Dec. 14, 1999)

me mee ee ee meee eee See” eee Se” See” ee” eee” See eee” eee” eee” eee ee”

2a

OPINION

The above-captioned cases are actions by the Federal
Trade Commission (FTC) and thirty-three States against
Mylan Laboratories and other drug companies for var-
ious federal and state law antitrust violations. On July 7,
1999, this Court issued a Memorandum Opinion granting
in part and denying in part defendants’ motions to dis-
miss. The Opinion addressed issues of federal law and
the various antitrust and consumer protection laws of the
plaintiff states. Sixteen of the plaintiff states have moved
for reconsideration of the Court’s ruling in respect to
various issues decided under their state laws.! Two of the
states seeking reconsideration - Ohio and Kentucky -
have also asked this Court to certify the questions of state
law to their highest state courts. After careful consider-
ation of plaintiffs’ motion and the opposition thereto, the
motion will be granted in part and denied in part.

I. BACKGROUND

The plaintiff states request that this Court reconsider
a number of its rulings in respect to the states’ antitrust
and consumer protection laws. The states seeking recon-
sideration argue that: (1) the interpretation of the
Supreme Court’s decision in Illinois Brick Co. v. Illinois,
431 U.S. 720 (1977), relied on in the July 7, 1999 Mem-
orandum Opinion, conflicts with the Supreme Court’s

' The states moving for reconsideration are Alaska,
Arkansas, Connecticut, Florida, Kentucky, Louisiana, Maine,
North Carolina, Ohio, Oklahoma, South Carolina, Tennessee,
Texas, Utah, Vermont and West Virginia. The remaining Plaintiff
states support this motion.

3a

subsequent ruling in California v. ARC America Corp., 490
U.S. 93 (1989); (2) the Court mistakenly dismissed various
state claims for equitable monetary relief in light of the
Court’s ruling on Idaho’s claims under the Idaho Con-
sumer Protection Act (ICPA); and (3) the Court mis-
takenly dismissed various state damages claims on behalf
of both direct and indirect purchasers. The Court will
address these arguments generally, and then apply that
discussion to the individual state statutes.

Il. DISCUSSION
A. Standard of Review

Under Federal Rule of Civil Procedure 54(b), a party
may seek to revise an order or other form of decision “at
any time before the entry of judgment adjudicating all of
the claims and the rights and liabilities of all of the
parties.” Fed. R. Civ. P, 54(b). “Because federal courts
have a strong interest in the finality of judgments,
motions for reconsideration should be granted spar-
ingly.” Continental Casualty Co. v. Diversified Indus., Inc.,
884 F. Supp. 937, 943 (E.D. Pa.1995). Nevertheless, “[i]t is
clear . . . that there are circumstances when a motion to
reconsider may perform a valuable function.” Above the
Belt v. Mel Bohannan Roofing, Inc., 99 F.R.D. 99, 101 (E.D.
Va. 1983). In such circumstances, a Rule 54(b) motion can
operate as the proper mechanism “for correcting errors
and preventing injustice.” United States ex rel. Houck v.
Folding Carton Admin. Committee, 121 F.R.D. 69, 70 (N.D.
Ill. 1988).

4a

B. Substantive Arguments
1. Illinois Brick and ARC America

The plaintiff state seeking reconsideration argue that
this Court adopted an overly expansive interpretation of
the Supreme Court's decision in Illinois Brick. The states
argue that this Court held that Illinois Brick in effect
preempted state laws addressing the rights of indirect
purchasers, in violation of the principles set forth by the
Supreme Court in California v. ARC America Corp.

The states’ argument is based on a misunderstanding
of both ARC America and this Court’s Memorandum
Opinion. ARC America addressed the preemptive effect of
Illinois Brick’s decision to deny standing to indirect pur-
chasers under the Clayton Act. The issue was whether
those states that had passed statutes expressly granting
standing to indirect purchasers (so-called “Illinois Brick
repealer statutes”) could enforce those statutes in light of
the federal adoption of the indirect purchaser doctrine.
See ARC America, 490 U.S. at 100. The Supreme Court held
that they could, as the decision in Illinois Brick was not
intended to have a preemptive effect on the state’s ability
to craft and enforce their own antitrust laws. Id. at 105-06.

Contrary to plaintiff's argument, the ARC America
Court did not hold that state courts were forbidden from
relying on Illinois Brick as persuasive authority for how a
state should interpret its antitrust regime. As noted by
the Florida Court of Appeals:

[ARC America] is not to say that the con-
cerns raised in Hanover Shoe and Illinois Brick —
the difficulties of tracing overcharges through a
distribution chain, the possibility of multiple

5a

liability for defendants, and the prospects of
inconsistent or duplicate federal and state judg-
ments — are not valid policy considerations
under state antitrust or deceptive trade practice
statutes. ARC America simply declines to impose
on each state the federal legislative antitrust
policy of deterring violations by simplifying
antitrust litigation.

Mack v. Bristol-Squibb, 673 So.2d 100, 107-08 (Fla. 1st Dist.
Ct. App. 1996) review dism’d, 689 So.2d 1068 (Fla. Jan. 31,
i997). Indeed, a number of courts have looked to Illinois
Brick to determine the scope and structure of state anti-
trust laws. See, e.g., Boos v. Abbott Labs., 925 F. Supp. 49 (D.
Mass. 1996); Stifflear v. Bristol-Myers Squibb Co., 931 P.2d
471 (Colo. Ct. App. 1996); Abbott Labs v. Segura, 907
S.W.2d 503 (Tex. 1995). The fact that this Court similarly
sought guidance from Illinois Brick’s discussion of anti-
trust policy does not conflict with the Supreme Court's
ruling in ARC America. Thus, insofar as the states have
asserted that this Court’s interpretation of Illinois Brick
was improper, their motion is denied.

2. State Restitution Claims

A number of states ask this Court to reconsider its
rulings disallowing state restitution claims. This Court
dismissed a number of state restitution claims on the
basis that the law of those states prompts courts to look
to federal law in interpreting their unfair competition and
consumer protection statutes, and the Clayton Act does
not authorize restitution. See FTC v. Mylan Laboratories, 62
F. Supp.2d 25, 41 (D.D.C. 1998). The Court allowed
Idaho’s claim under the Idaho Consumer Protection Act

6a

(ICPA) to stand, however, on the basis that Idaho law
prompts courts to consider decisions interpreting
§ 5(a)(1) of the FTC Act, rather than the Clayton Act. See
Idaho Code § 48-604(a). As this Court had already held
that the FTC could pursue equitable remedies such as
disgorgement, the Court reasoned that Idaho should be
permitted to pursue similar kinds of equitable relief
under the ICPA.? Alaska, Connecticut, Florida, South Car-
olina, Vermont and West Virginia have asked this Court
to reconsider its rulings under the laws of those states in
light of the fact that they too prompt courts to consider
the FTC Act when interpreting the state statutes. Other
states have moved for reconsideration on the ground
that, although their state statutes do not explicitly refer-
ence the FTC Act, the structure and purpose of the state
statutes suggest that they should be interpreted in a
similar manner.

2 It should be noted that no court, including this one, has
held that the FTC may pursue restitution claims on behalf of
indirect purchasers. Although this Court did authorize the FTC
to seek disgorgement under § 13(b) of the Act, see Mem. Op. at
12-13, and at least one other court has permitted the FTC to
pursue restitution, see FTC v. Security Rare Coin, 931 F.2d 1312
(8th Cir. 1991), no court has addressed the specific issue of
restitution on behalf of indirect purchasers. The only guidance
in this area, then, are the principles for interpreting the remedial
powers of a district court set forth in the Porter v. Warner line of
cases. See Porter, 328 U.S. 395 (1946); Mitchell v. DeMario Jewelry,
Inc., 361 U.S. 288, 291-92 (1960); see also Mem. Op. at 11-12. In
light of the expansive view of a court’s equitable jurisdiction
espoused in the Porter cases, the Court will assume that the FTC
does have the authority to seek such relief.

7a

The states are correct that there is an internal incon-
sistency between the Court’s ruling on Idaho law and its
rulings in respect [sic] Alaska, Connecticut, Florida,
South Carolina and Vermont. The Court also finds that
this inconsistency extends to other states whose statutes,
though not explicitly referencing the FTC Act, permit the
state to proceed in equity. Thus, the Court will reassess its
rulings in respect to state statutes that explicitly refer-
ence, or are modeled after, the FTC Act, or that otherwise
permit the state to pursue equitable remedies.

. * *

Louisiana

Louisiana moves this Court to reconsider the dis-
missal of its claims under the Louisiana Monopolies Act,
La. Rev. Stat. Ann §§ 51:121 et seq. The July 7, 1999 Order
in this case contained a scrivener’s error dismissing Loui-
siana’s claim for damages on behalf of direct purchasers
under the Monopolies Act. That claim is reinstated.

Upon the benefit of further briefing, the Court will
also reinstate Louisiana’s claims for equitable monetary
relief under La. Rev. Stat. Ann § 51:128. That section
authorizes Louisiana, through its Attorney General, to
sue for violations of the the [sic] Monopolies Act. See
State v. Classic Soft Trim, Inc., 663 So.2d 835, 835 (La. App.
5th Cir. 1995). Section 128 does not limit the state’s ability
to pursue the full range of equitable relief. The Court will
therefore grant Louisiana’s motion and permit the state to
pursue claims for restitution on behalf of both direct and
indirect purchasers.

8a

The Court will not reinstate Louisiana’s claim for
damages as an indirect purchaser, or on behalf of indirect
purchasers, under § 137 of the Monopolies Act. Section
137 grants standing to “any person” who suffers an anti-
trust injury. See La. Rev. Stat. Ann § 51:137. In Free v.
Abbott Laboratories, 176 F.3d 298, 299 (5th Cir. 1999), the
Fifth Circuit looked to the policy considerations underly-
ing Illinois Brick and found that indirect purchasers do
not have standing under § 137. Although Louisiana urges
this Court to disregard the Fifth Circuit’s conclusion, this
Court will not ignore the holding of a federal appellate
court in a case directly on point. The Court will therefore
deny Louisiana’s motion to reconsider its ruling on indi-
rect purchaser standing under § 137.

Louisiana also moves this Court to reconsider its
rulings under the state’s Unfair Trade and Consumer
Protection Act. Louisiana’s claims for restitution on
behalf of direct and indirect purchasers are reinstated,
pursuant to La. Rev. Stat. Ann §§ 51:1407-1408, and the
decision in Classic, 663 So.2d at 835. Louisiana’s claim for
damages on behalf of direct purchasers under the Act
will also be reinstated, as the Louisiana Attorney General
has parens patriae authority to bring antitrust actions on
behalf of state citizens. See State v. Bordens, 684 So.2d
1024, 1026 (La. App. 4th Cir. 1996). The state’s claim for
damages on behalf of indirect purchasers under the Act
will not be reinstated, however, as to do so would pro-
vide an end run around the Fifth Circuit’s decision in
Free. As stated by the Fifth Circuit in a similar context, a
court should not interpret a state’s antitrust laws “in a
manner that rewards creative pleading at the expense of
consistent application of legal principles.” Segura, 907

9a

S.W.2d at 506. Thus, Louisiana’s motion to reinstate its
damages claim on behalf of indirect purchasers under the
Unfair Trade and Consumer Protection Act will be
denied.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385014_0334%3A09. Public record. Not legal advice.