McGraw gets Alaskan help in Zyprexa case

By Steve Korris | Aug 4, 2006

McGraw CHARLESTON – At the hottest time of the year, West Virginia Attorney General Darrell McGraw gained some relief from Alaska.


CHARLESTON – At the hottest time of the year, West Virginia Attorney General Darrell McGraw gained some relief from Alaska.

U. S. District Judge Timothy Burgess of Anchorage on July 28 remanded a state of Alaska lawsuit against drug maker Eli Lilly to state court, just as McGraw wants U. S. District Judge Robert Chambers of Huntington to do in a suit against Eli Lilly.

Troy Giatras of Charleston, a private attorney acting as special assistant to McGraw, submitted Burgess's order to Chambers on July 31.

McGraw and Giatras have asked Chambers to send the state's suit back to the Mason County courthouse in Point Pleasant, where McGraw filed it in February.

The suit seeks to enjoin Eli Lilly from engaging in unfair or deceptive practices in marketing Zyprexa, an antipsychotic drug.

The suit proposes to require Eli Lilly to pay for damages, restitution, investigative costs and attorney fees.

Eli Lilly removed the suit to federal court in Huntington, arguing that it raised substantial federal issues

Eli Lilly then asked Chambers to transfer the suit to a judge overseeing Zyprexa cases from around the nation in federal court in New York.

McGraw argued in his motion for remand that the state's claims arose under West Virginia Medicaid law, not federal law.

At that point Chambers faced three options –- to keep the case, to ship it to New York, or to bounce it back to Point Pleasant.

Eli Lilly opposed the Point Pleasant option in a May 19 memorandum by attorney Raymond Franks of Charleston, listing reasons for federal jurisdiction.

Franks wrote that the state sought to enjoin marketing that the Food and Drug Administration closely supervises.

He wrote that the state sought to recover millions of dollars in Medicaid funds, 70 percent of which came from the federal government.

He wrote that the state hoped to prove violation of federal law.

He wrote that a federal judge in Louisiana transferred a similar case to New York.

Giatras answered May 26 that, "While Defendant's conduct may also be in violation of federal law, it is state law Plaintiff seeks to enforce."

He wrote that the state did not seek to enjoin all marketing of Zyprexa, but only marketing that violated the state's Consumer Credit and Protection Act.

He wrote that improper marketing "resulted in increased payments by West Virginia's Medicaid program both for unnecessary prescriptions for Zyprexa, and for diabetes related injuries resulting from the use of Zyprexa by West Virginia residents."

He wrote that federal Medicaid law delegates to states both the management of the program and the recovery of funds.

He wrote, "That the state will have to reimburse the federal government some portion of its recovery if successful in this case does not create a substantial federal question."

Franks answered for Eli Lilly on June 2 that the state sought to distance itself from the sweeping injunction in its complaint.

He wrote, "This Court must judge the propriety of Lilly's removal of this action based on the claims set forth in the complaint, not on plaintiff's attempt to disavow those claims."

As Chambers pondered the arguments, Burgess signed his order in Alaska finding that, "On its face, plaintiff's complaint does not state a claim arising under federal law."

He wrote, "Plaintiff's claims seek relief to recover damages solely under Alaska law."

He accepted the state's argument that Congress delegated management of Medicaid to states.

He rejected Eli Lilly's argument that federal funds raised a substantial federal issue.

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