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Texas v. Merck & Co., Inc.
Citations: 385 F. Supp. 2d 604; 2005 U.S. Dist. LEXIS 35544; 2005 WL 2098258Docket: 2:05-cr-00606
Court: District Court, W.D. Texas; August 29, 2005; Federal District Court
The United States District Court for the Western District of Texas, presided over by Judge Yeakel, granted the State of Texas's motion to remand a lawsuit against Merck Co. Inc. back to Texas state court. The case, originally filed on June 30, 2005, involved allegations by Texas that Merck made false representations regarding the safety of VIOXX, which was included in the state's Medicaid formulary. Texas accused Merck of violating the Texas Medicaid Fraud Prevention Act (TMPFA) by making misleading claims, failing to disclose critical safety information, and submitting inappropriate claims for Medicaid reimbursement. Texas sought restitution, civil penalties, and legal costs associated with the lawsuit. Merck had removed the case to federal court on August 2, 2005, citing both federal-question and diversity jurisdiction, arguing that the claims were related to FDA regulations and federal Medicaid statutes. Merck contended that the Texas Health and Human Services Commission was the actual plaintiff, not the State of Texas itself. Texas opposed the removal and requested a remand to state court, which the court ultimately granted, dismissing all related motions, including Merck's request to stay proceedings pending a transfer decision by the Judicial Panel on Multidistrict Litigation. Federal courts have limited jurisdiction and can only hear cases as defined by the Constitution and U.S. laws. The burden is on the party bringing the action to rebut the presumption against subject matter jurisdiction. In this case, Merck failed to demonstrate diversity jurisdiction because Texas, as the plaintiff, is not considered a citizen for diversity purposes. The relevant statute indicates that the liability is to Texas, not to THHSC, confirming Texas as the real party in interest. Additionally, Merck did not establish federal-question jurisdiction, as Texas's claims are based solely on state law under the Texas Medicaid Fraud Prevention Act (TMPFA), specifically alleging unlawful acts related to false statements and misrepresentation concerning Medicaid eligibility. Knowingly or intentionally making false statements or misrepresentations regarding a facility's conditions or operations to qualify for Medicaid certification is prohibited. This includes various types of facilities such as hospitals, nursing facilities, hospices, and home health agencies. Additionally, submitting claims for unapproved or inappropriate services or products under the Medicaid program is also prohibited. The court clarifies that the relevant provisions pertain specifically to Texas's Medicaid program, not the federal program, and are not related to FDA regulations. The court finds no federal questions in Texas's lawsuit against Merck regarding the approval of VIOXX for the Medicaid program. Consequently, the court grants Texas's motion to remand the case back to state court, dismisses Merck's motion to stay proceedings, and denies the expedited request for consideration. The case is remanded to the 345th Judicial District Court of Travis County, Texas.