Case 1:20-cv-04946-AT Document 25 Filed 04/12/21 Page 1 of 29
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF GEORGIA
`ATLANTA DIVISION
`
`
`CIVIL ACTION NO.
`1:20-cv-4946-AT
`
`: : : : : : : : : :
`
`
`:
`:
`:
`:
`:
`:
`:
`:
`
`
`
`
`STATE OF GEORGIA ex rel.
`CHRISTOPHER M. CARR, Attorney
`General State of Georgia,
`
`
`Plaintiff,
`
`
`v.
`
`ELITE INTEGRATED MEDICAL,
`LLC, f/k/a Superior Healthcare of
`Woodstock, LLC d/b/a Superior
`Healthcare Group, Superior
`Healthcare Sandy Springs, and
`Superior Healthcare Morrow, and
`JUSTIN C. PAULK, individually,
`
`
`Defendants.
`
`OPINION AND ORDER
`
`
`
`Plaintiff State of Georgia ex rel. Christopher M. Carr, Attorney General of
`
`the State of Georgia (“State of Georgia” or “State”) brought this action against
`
`Defendants Elite Integrated Medical, LLC (“Elite”) and Justin C. Paulk for
`
`violations of the Georgia Fair Business Practices Act, O.C.G.A. § 10-1-390 et seq.
`
`(“GFBPA”) in the Superior Court of Fulton County in September 2020. The suit
`
`alleges that Defendants made false and/ or misleading representations to the
`
`public concerning the regenerative medicine products Elite offered. Defendants
`
`removed the case to federal court in December 2020. (Doc. 1.) After removing the
`
`case, Defendants filed a motion to dismiss for failure to state a claim. (Doc. 8.)
`
`

`

`Case 1:20-cv-04946-AT Document 25 Filed 04/12/21 Page 2 of 29
`
`Shortly thereafter, the State of Georgia filed the instant Motion to Remand [Doc.
`
`13] for lack of subject matter jurisdiction. For the reasons that follow, the State of
`
`Georgia’s motion [Doc. 13] is GRANTED.
`
`I.
`
`FACTUAL AND PROCEDURAL BACKGROUND
`
`The Regenerative Medicine Industry:
`
`
`
`This action arises against the backdrop of the regenerative medicine
`
`industry. Generally speaking, regenerative medicine
`
`involves replacing,
`
`engineering, or regenerating human cells, tissues, or organs to establish, restore or
`
`enhance normal cell function. (Complaint, Doc. 1-2 ¶ 9.) This can be accomplished
`
`with cell therapies, therapeutic tissue-engineering products, human cell and tissue
`
`products, and certain combination products involving cells and devices. (Id.)
`
`Regenerative medical products and procedures are regulated by the U.S. Food and
`
`Drug Administration (“FDA”) under the 1938 Food, Drug and Cosmetic Act
`
`(“FDCA”) and the Public Health Service Act (“PHSA”). (Id. ¶ 10.) At present, the
`
`FDA has approved the use of stem cell products only for certain types of stem cells,
`
`“blood-forming” stem cells, and for specific disorders, such as ones that affect the
`
`production of blood. (Id.) Non-approved stem cell products are “investigational”
`
`products that are currently involved in FDA review processes which includes
`
`investigations into the product’s effectiveness and safety, such as through clinical
`
`trials. (Id. ¶ 11.)
`
`
`
`Over the last few years, the FDA, its Commissioner, its Director of the Center
`
`for Biologics Evaluation and Research, and industry physicians, scientists, and
`
`2
`
`

`

`Case 1:20-cv-04946-AT Document 25 Filed 04/12/21 Page 3 of 29
`
`regulatory experts have warned about unproven and unapproved regenerative
`
`medicine products — including stem cell, exosome, or other similar products —
`
`that are “uncontrolled experimental procedures” that cost patients both financially
`
`and physically. (Id. ¶¶ 11-13.) The FDA has issued “consumer alerts” concerning
`
`certain stem cell products, including ones derived from human umbilical cord
`
`blood, Wharton’s Jelly, or amniotic fluid, notifying consumers that none of these
`
`products have been approved to treat any orthopedic condition, neurological
`
`disorder, or cardiovascular or pulmonary disease. (Id. ¶ 12.) These authorities have
`
`also condemned the practice of advertising and offering of unproven stem cell
`
`products, stating that the “aggressive marketing approach” by certain companies,
`
`which claim that their particular stem cell products are safe and effective, is not
`
`supported by the existing scientific literature. (Id. ¶ 13.) Similarly, the Federal
`
`Trade Commission has warned that marketers should not create confusion by
`
`playing “fast and loose” with the facts, as the phrase “stem cell treatment” covers a
`
`broad range of therapies, from promising research to fraud. (Id. ¶ 14.)
`
`Elite’s Business:
`
`During the relevant time period, Defendant Elite operated a medical practice
`
`that advertised and offered regenerative medicine products to Georgia consumers
`
`to treat, cure, and mitigate various diseases and health conditions. (Id. ¶ 4.)
`
`
`
`3
`
`

`

`Case 1:20-cv-04946-AT Document 25 Filed 04/12/21 Page 4 of 29
`
`
`
`(Id. ¶ 34.) Defendant Paulk owned and managed the day-to-day operations of Elite,
`
`had the sole authority to approve all marketing content relating to the regenerative
`
`medicine products offered by Elite, and regularly communicated with the company
`
`that disseminated marketing content on behalf of Elite. (Id. ¶ 5.)
`
`The regenerative medicine products Elite advertised and offered were not
`
`ones it manufactured or produced; rather, Elite purchase these products from
`
`third-party manufactures. (Id. ¶ 17.) These third-party products were processed or
`
`derived from placental tissue and Wharton’s jelly of the umbilical cord. (Id. ¶¶ 18-
`
`21.) The manufactures have identified these products as human cellular and tissue
`
`products (“HCT/P”) that are regulated by the FDA. (Id. ¶ 23.) None of the products
`
`offered by Defendants have been approved by the FDA. (Id. ¶ 27.)
`
`
`
`According to the Complaint, Defendants made false and misleading
`
`representations regarding their products’ safety and effectiveness on their website,
`
`in video-taped “testimonials,” in newspapers, on social media, in brochures, by
`
`email, and at seminars. (Id. ¶¶ 34,40,41,45,50.) For example, as alleged,
`
`4
`
`

`

`Case 1:20-cv-04946-AT Document 25 Filed 04/12/21 Page 5 of 29
`
`Defendants represented, expressly or by implication, that their products were safe
`
`and effective by citing to studies and reports for other, different stem cell therapies
`
`and products. (Id. ¶ 30.) These other stem cell products are derived from different
`
`sources (such as bone marrow), do not contain the same ingredients, and are not
`
`processed or manufactured using the same processes. (Id. ¶ 32.)
`
`In addition, the State alleges that Elite made a series of other
`
`misrepresentations in promoting its products. The Complaint alleges that Elite
`
`advertised as having a staff of medical doctors involved in providing the
`
`regenerative therapies — for example, posting a video with a paid actor purporting
`
`to be a medical doctor — when in reality Elite only employed medical doctors as
`
`independent contractors for the limited purpose of administering injections to
`
`consumers. (Id. ¶¶ 37-38.) Seminars were conducted by chiropractors wearing
`
`white lab coats who introduced themselves as “doctor.” (Id. ¶ 49.) Defendants also
`
`allegedly sent out emails to consumers with success stories from professional
`
`athletes to substantiate their products; however, the stem cell therapies/ products
`
`used by the athletes were different that the ones provided by Elite. (Id. ¶ 46.) As
`
`another example cited in the Complaint, Defendants’ seminar materials included
`
`PowerPoint presentations, indicating that Human Cellular Tissue is not regulated
`
`by the FDA, as shown below. (Id. ¶ 51.)
`
`5
`
`

`

`Case 1:20-cv-04946-AT Document 25 Filed 04/12/21 Page 6 of 29
`
`
`
`The advertising material also represented that Elite’s products were as safe
`
`and effective as alternative treatments, such as surgery. (Id. at 12-13, ¶ 50.) In
`
`advertising this content, the State alleges that Defendants specifically targeted
`
`older and disabled consumers by focusing on diseases and health conditions that
`
`limit certain consumers’ major life activities, such as orthopedic conditions like
`
`osteoarthritis. (Id. ¶¶ 57-58.)
`
`Asserted Causes of Action:
`
`
`
`Based on the above facts, the Attorney General brings the four following
`
`claims under the Georgia Fair Businesses Practice Act (“GFBPA”), in his official
`
`capacity pursuant to O.C.G.A. § 10-1-397. In Count I, the State alleges that
`
`Defendants made false and misleading representations that their regenerative
`
`medicine products treat, cure, or mitigate diseases and health conditions when
`
`6
`
`

`

`Case 1:20-cv-04946-AT Document 25 Filed 04/12/21 Page 7 of 29
`
`these representations are not substantiated by reliable and competent scientific
`
`evidence. (Id. ¶ 60.) Similarly, in Count II, the State alleges that Defendants made
`
`false and misleading representations that their products were comparable or
`
`superior to conventional medical treatments without reliable scientific evidence.
`
`(Id. ¶ 63.) Count III asserts that Defendants misrepresented to consumers that
`
`their products are not regulated by the FDA or that the products do not require
`
`FDA approval. (Id. ¶ 66.) The fourth GFBPA claim asserted is for use of a computer
`
`or computer network to disseminate false and misleading representations about
`
`the regenerative medicine products. (Id. ¶ 69.) According to the State, Defendants’
`
`targeting of vulnerable populations subjects them to additional civil penalties
`
`under the GFBPA, see O.C.G.A. § 10-1-851.
`
`Procedural Background:
`
`
`
`Plaintiff State of Georgia filed this lawsuit in Fulton County State Court on
`
`September 14, 2020. Defendants did not file an answer in state court but removed
`
`this lawsuit to federal court on December 7, 2020. (Doc. 1.) A week later,
`
`Defendants filed a motion to dismiss on December 14, for failure to state a claim.
`
`(Doc. 8.) Now, the State has filed the present Motion to Remand (Doc. 13), to which
`
`Defendants have responded (Doc. 21), and Plaintiff has replied (Doc. 23).
`
`II. LEGAL STANDARD
`
`A defendant may remove to federal court any civil action “arising under the
`
`Constitution, laws, or treaties of the United States.” 28 U.S.C. §§ 1331 (detailing
`
`original/ federal question jurisdiction); 1441(a) (outlining removal); see also,
`
`7
`
`

`

`Case 1:20-cv-04946-AT Document 25 Filed 04/12/21 Page 8 of 29
`
`Kemp v. IBM, 109 F.3d 708, 711 (11th Cir. 1997) (“A defendant may remove a case
`
`to federal court only if the district court would have had jurisdiction over the case
`
`had the case been brought there originally”). “To remove a case as one falling
`
`within federal-question jurisdiction, the federal question ordinarily must appear
`
`on the face of a properly pleaded complaint.” Jefferson County v. Acker, 527 U.S.
`
`423, 430-31 (1999); Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987)
`
`(“[F]ederal jurisdiction exists only when a federal question is presented on the face
`
`of the plaintiff’s properly pleaded complaint. The rule makes the plaintiff the
`
`master of the claim; he or she may avoid federal jurisdiction by exclusive reliance
`
`on state law.”)
`
`A case “aris[es] under” federal law within the meaning of § 1331 if “a well-
`
`pleaded complaint” establishes either that federal law creates the cause of action
`
`or that the plaintiff’s right to relief necessarily depends on resolution of a
`
`substantial question of federal law.” Empire Healthchoice Assurance, Inc. v.
`
`McVeigh, 547 U.S. 677, 689-90 (2006) (quoting Franchise Tax Bd. of Cal. v.
`
`Constr. Laborers Vacation Trust for S. Cal., 463 U.S. 1, 27-28 (1983)); see also
`
`Merrell Dow Pharm., Inc. v. Thompson, 478 U.S. 804, 808 (1986) (noting that
`
`“the vast majority of cases brought under the general federal-question jurisdiction
`
`of the federal courts are those in which federal law creates the cause of action”).
`
`But see, Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308,
`
`312 (2005) (explaining that even if federal law does not create the cause of action,
`
`a case may nonetheless arise under federal law where a state law claim turns on
`
`8
`
`

`

`Case 1:20-cv-04946-AT Document 25 Filed 04/12/21 Page 9 of 29
`
`substantial questions of federal law). In assessing whether a case arises under
`
`federal law, potential defenses involving the Constitution or laws of the United
`
`States are ignored. Beneficial Nat’l Bank v. Anderson, 539 U.S. 1, 6 (2003).
`
`Under rare circumstances, the complete preemption doctrine provides an
`
`“independent corollary” to the well-pleaded complaint rule for determining
`
`whether a federal court has subject matter jurisdiction. See Caterpillar, 482 U.S.
`
`at 393. Where “the pre-emptive force of a [federal] statute is so ‘extraordinary’ that
`
`it ‘converts an ordinary state common-law complaint into one stating a federal
`
`claim for purposes of the well-pleaded complaint rule,’” such a claim “arises under”
`
`federal law and thus provides the court with subject matter jurisdiction. Id.
`
`(quoting Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 65 (1987)).1
`
`“A removing defendant bears the burden of proving proper federal
`
`jurisdiction.” Adventure Outdoors, Inc. v. Bloomberg, 552 F.3d 1290, 1294-95
`
`(11th Cir. 2008) (quoting Leonard v. Enterprise Rent a Car, 279 F.3d 67, 972 (11th
`
`Cir. 2002)). “[T]o meet their burden, the defendants must show that the plaintiffs’
`
`complaint, as it existed at the time of removal, provides an adequate basis for the
`
`exercise of federal jurisdiction.” Id. at 1295. As federal district courts are courts of
`
`limited jurisdiction, in deciding a motion to remand where the plaintiff and
`
`defendant disagree as to jurisdiction, any doubts about the propriety of federal
`
`
`1 The Supreme Court has only recognized complete preemption of state law claims under three
`federal laws: (1) the Labor Management Relations Act, see Avco Corp. v. Aero Lodge No. 735, Int’l
`Ass’n of Machinists and Aerospace Workers, 390 U.S. 557, 560-62 (1968); (2) the Employee
`Retirement Income Security Act, see Metro. Life, 481 U.S. at 65-66; and (3) the National Bank
`Act, see Beneficial, 539 U.S. at 7-11.
`
`9
`
`

`

`Case 1:20-cv-04946-AT Document 25 Filed 04/12/21 Page 10 of 29
`
`jurisdiction should be resolved in favor of remand to state court. Burns v. Windsor
`
`Ins. Co., 31 F.3d 1092, 1095 (1994); Adventure Outdoors, 552 F.3d at 1294.
`
`III. DISCUSSION
`
`Here, the State contends that federal question jurisdiction — the basis for
`
`removal — is lacking because the State’s complaint does not assert any federal
`
`claims and no claims are dependent on an actual, disputed federal question.
`
`(Motion to Remand (“Mot.”) at 2.)2 Defendants’ responsive argument is twofold.
`
`First, Defendants argue that federal question jurisdiction exists because there is a
`
`disputed issue of federal law: namely, whether the FDA regulates regenerative
`
`medicine products. (Def. Resp. at 12.) Second, Defendants contend that there is
`
`federal question jurisdiction because the State’s claims are preempted by the
`
`FDCA. (Id.) The Court addresses these arguments in turn.
`
`A. Whether the State’s claims depend upon resolution of a
`substantial question of federal law
`
`The State’s Complaint asserts four counts, all for violations of the Georgia
`
`Fair Businesses Practices Act (“GFBPA”), a state statute intended to “protect
`
`consumers and legitimate business enterprises from unfair or deceptive practices
`
`in the conduct of any trade or commerce in part or wholly in the state.” O.C.G.A. §
`
`10-1-391(a). Without question, there is no federal cause of action at issue here.3 In
`
`arguing that the State’s claims nevertheless “arise under” federal law, Defendants
`
`
`2 Defendants do not argue that diversity jurisdiction exists here.
`3 As noted above, the Supreme Court reiterated in Merrell, 478 U.S. at 808, that “the vast majority
`of cases brought under the general federal-question jurisdiction of the federal courts are those in
`which federal law creates the cause of action.”
`
`10
`
`

`

`Case 1:20-cv-04946-AT Document 25 Filed 04/12/21 Page 11 of 29
`
`hang their hat on the “longstanding, if less frequently encountered, variety of
`
`federal ‘arising under’ jurisdiction,” that recognizes that “in certain cases[,]
`
`federal-question jurisdiction will lie over state-law claims that implicate significant
`
`federal issues.” Grable, 545 U.S. at 312. This flavor of federal question jurisdiction
`
`applies only to a “special and small category” of cases. Gunn v. Minton, 568 U.S.
`
`251, 258 (2013) (citing Empire Healthchoice, 547 U.S. at 699).
`
`In articulating a standard by which courts should determine whether a case
`
`fits into this “slim category,” the Supreme Court’s past guidance has been
`
`scattered. See, Gunn, 568 U.S. at 258 (“In outlining the contours of this slim
`
`category, we do not paint on a blank canvas. Unfortunately, the canvas looks like
`
`one that Jackson Pollock got to first.”) Thus, to “bring some order to this unruly
`
`doctrine,” the Court in Grable, 545 U.S. at 314, condensed prior cases “into the
`
`following inquiry: Does the ‘state-law claim necessarily raise a stated federal issue,
`
`actually disputed and substantial, which a federal forum may entertain without
`
`disturbing any congressionally approved balance of federal and state judicial
`
`responsibilities.’?” Gunn, 568 U.S. at 258 (quoting Grable, 545 U.S. at 314). The
`
`Court in Gunn reiterated that “federal jurisdiction over a state law claim will lie if
`
`a federal issue is: (1) necessarily raised, (2) actually disputed, (3) substantial, and
`
`(4) capable of resolution in federal court without disrupting the federal-state
`
`balance approved by Congress.” Gunn, 568 U.S. at 258. All of these requirements
`
`must be met to support federal jurisdiction. Id.
`
`11
`
`

`

`Case 1:20-cv-04946-AT Document 25 Filed 04/12/21 Page 12 of 29
`
`Here, the Parties’ dispute surrounds Count III of the Complaint, for “false
`
`and misleading representations regarding regulation of regenerative medicine
`
`products.” (Compl. at 33.) In this claim, the State alleges:
`
`66.
`Defendants misrepresented to consumers that the regenerative
`medicine products they offer, including Surforce, CoreCyte, and
`GeneXStem, are not regulated for use by the FDA and/ or that the
`products are not required to be approved by the FDA.
`
`
`67.
`Defendants’ acts and practices violate O.C.G.A. § 10-1-393(a), the
`FBPA’s general prohibition against unfair and deceptive acts and
`practices; O.C.G.A. § 10-1-393(b)(2) that prohibits causing actual
`confusion or misunderstanding as to the source, sponsorship,
`approval, or certification of goods or services; O.C.G.A. § 10-1-
`393(b)(3) that prohibits causing actual confusion or actual
`misunderstanding as to affiliation, connection, or association with or
`certification by another; and O.C.G.A. § 10-1-393(b)(5), which
`prohibits representing that goods or services have sponsorship,
`approval, characteristics, ingredients, uses, benefits, or qualities that
`they do not have.
`
`
`(Compl. ¶¶ 66-67.) This claim thus gives rise to Defendants’ argument that the
`
`State’s lawsuit implicates the federal question of whether the FDA regulates
`
`regenerative medicine products. (Def. Resp. at 7) (“Here, if the FDA does not
`
`regulate regenerative medicine products, there can be no state law violation based
`
`on marketing stating that the products are not regulated by the FDA. If the FDA
`
`does regulate regenerative medicine products, a set of facts exists in which a state
`
`law claim could stand.”)
`
`In order to prove Count III, that Defendants made false and misleading
`
`representations regarding the regulation or approval of regenerative medicine
`
`12
`
`

`

`Case 1:20-cv-04946-AT Document 25 Filed 04/12/21 Page 13 of 29
`
`products in violation of the GFBPA, the State must establish (1) that a
`
`representation was made, (2) that the representation was likely to mislead
`
`consumers acting reasonably under the circumstance, and (3) that the
`
`representation was material. See FTC v. Tashman, 318 F.3d 1273, 1277 (11th Cir.
`
`2003) (construing the FTCA4). Under the first requirement here, the State must
`
`show that Defendants made the representations asserted in the complaint, i.e., that
`
`the advertisements and related marketing materials in fact stated that Elite’s
`
`products were not regulated by the FDA or did not require FDA approval. In
`
`assessing whether the State has made out this element, the evaluating court will
`
`look to “the advertisement’s overall, net impression rather than the literal truth or
`
`falsity of the words in the advertisement.” F.T.C. v. National Urological Group,
`
`Inc., 645 F. Supp. 2d 1167, 1188-89 (N.D. Ga. 2008) (Pannell, J.), aff’d 356 F.
`
`App’x. 358 (11th Cir. 2009) (noting that the meaning of the advertisement is a fact
`
`
`4 In passing the GFBPA, the General Assembly explained that it intended that the GFBPA “be
`interpreted and construed consistently with interpretations given by the Federal Trade
`Commission in the federal courts pursuant to Section 5(a)(1) of the Federal Trade Commission
`Act (15 U.S.C. Section 45(a)(1)), as from time to time amended.” See O.C.G.A. § 10-1-391(b). See
`also, Zeeman v. Black, 273 S.E.2d 910, 913 (Ga. Ct. App. 1980). The GFBPA may be enforced
`through both governmental and private action, each with its own remedies. Quattroccki v. State,
`850 S.E.2d 432, 436 (Ga. Ct. App. 2020) (detailing the parallel enforcement scheme which
`provides for “damages” as a remedy for private litigations but not as a remedy available to the
`government). However, unlike with a private action, the state enforcement scheme allows the
`Attorney General to take action “whether or not any person has actually been misled.” O.C.G.A. §
`10-1-397(b). See also, Moore-Davis Motors, Inc. v. Joyner, 556 S.E.2d 137, 139 (Ga. Ct. App.
`2001) (“Although the FBPA provides administrative remedies for any violation of the Act, a
`private right of action is only available to a person ‘who suffers injury or damage as a result of a
`violation.’”) Thus, the requirements for the State to show a GFBPA violation are different than in
`the case of a private litigant bringing suit under the GFBPA. See e.g., Tiismann v. Linda Martin
`Homes Corp., 637 S.E.2d 14, 17 (Ga. 2006) (“A private FBPA claim has three elements: a violation
`of the Act, causation, and injury.”).
`
`13
`
`

`

`Case 1:20-cv-04946-AT Document 25 Filed 04/12/21 Page 14 of 29
`
`question that “may be resolved by the terms of the advertisement itself or by
`
`evidence of what consumers interpreted the advertisement to convey”).
`
`Second, the State must demonstrate that the representation was likely to
`
`mislead consumers. It can make this showing under a “falsity theory,” a
`
`“reasonable basis theory,” or both. Id. at 1190; see also, F.T.C. v. Pantron, 33 F.3d
`
`1088, 1096 (9th Cir. 1994); F.T.C. v. Direct Marketing Concepts, Inc., 624 F.3d 1,
`
`n. 6 (1st Cir. 2010); Beardsall v. CVS Pharmacy, Inc., 953 F.3d 969, 977 (7th Cir.
`
`2020); Federal Trade Commission v. Roca Labs, Inc., 345 F.Supp.3d 1375, 1386
`
`(M.D. Fla. 2018). While the “falsity theory” requires that the State show that the
`
`express or implied message conveyed by the ad is false, the “reasonable basis
`
`theory” only requires that the State show that Elite lacked a reasonable basis, or
`
`adequate substantiation, for asserting that the message was true. National
`
`Urological Group, 645 F. Supp. 2d at 1188-89; Pantron, 33 F.3d at 1096. Third,
`
`the State must show that the representation at issue was material, i.e., if it “is the
`
`kind usually relied on by a reasonably prudent person.” National Urological
`
`Group, 645 F. Supp. 2d at 1188-89;(citing FTC v. Windward Marketing, 1997 WL
`
`33642380, at *9 (N.D. Ga. Sept. 30, 1997)).
`
`As noted above, “federal jurisdiction over a state law claim will lie if a federal
`
`issue is: (1) necessarily raised, (2) actually disputed, (3) substantial, and (4)
`
`capable of resolution in federal court without disrupting the federal-state balance
`
`approved by Congress.” Gunn, 568 U.S. at 258 (emphasis added).
`
`
`
`14
`
`

`

`Case 1:20-cv-04946-AT Document 25 Filed 04/12/21 Page 15 of 29
`
`i.
`
`Necessarily raised
`
`Under this framework, the State argues that the resolution of a federal
`
`question is not necessary for it to prove its case because the purported federal
`
`question is only relevant to Count III and, under that claim, the State has pled both
`
`a “falsity theory” and a “reasonable basis theory.” Thus, the issue of whether the
`
`FDA in fact regulates regenerative medicine products does not dictate its right to
`
`relief. (Mot. at 19-20). As the State further explains:
`
`[T]he State may proceed under a reasonable basis theory entirely, in
`which case additional evidence referenced in the complaint may be
`considered without any consideration of the provisions of the FDCA.
`The state court factfinder may contemplate how Defendants could
`claim that their products are not regulated by the FDA and/or that the
`products are not drugs when the FDA issued press releases and
`consumer alters stating otherwise, the manufacturers of the products
`represented otherwise, and the studies and reports represented by
`Defendants to be substantiation for efficacy appear to involve
`products that are regulated by the FDA as drugs. The state court
`factfinder could find that Defendants did not have a reasonable basis
`for making the representation in the power point slide and therefore
`violated Sections 393(a), 393(b)(2), and/or 393(b)(3) of the FBPA,
`without deciding whether the FDA in fact regulated the products
`and/or whether the products were in fact drugs under the FDCA.
`Because a state court factfinder could find liability without deciding
`any issue involving the FDCA, the State’s cause of action does not
`depend necessarily on a question of federal law.
`
`(Id.) (emphasis added). Though acknowledging the State’s above position — that a
`
`resolution of the alleged federal issue is not necessary under the “reasonable basis
`
`theory” — Defendants do not substantively engage with this argument or attempt
`
`to refute it, other than by repeating that “the question of whether the FDA may
`
`15
`
`

`

`Case 1:20-cv-04946-AT Document 25 Filed 04/12/21 Page 16 of 29
`
`regulate regenerative medicine products is dispositive in this case.” (Def. Resp. at
`
`7, 10.)
`
`
`
`In Merrell Dow, supra, the Supreme Court — also addressing a situation
`
`where the plaintiff’s state law claim arose in connection with the FDCA — affirmed
`
`and cited the decision of the Sixth Circuit, which had reasoned that:
`
`Federal question jurisdiction would, thus, exist only if plaintiffs’ right
`to relief depended necessarily on a substantial question of federal law.
`Plaintiffs’ causes of action referred to the FDCA merely as one
`available criterion for determining whether Merrell Dow was
`negligent. Because the jury could find negligence on the part of
`Merrell Dow without finding a violation of the FDCA, the plaintiffs’
`cause of action did not depend necessarily upon a question of federal
`law. Consequently, the causes of action did not arise under federal law
`and, therefore, were improperly removed to federal court.
`
`478 U.S. at 807 (quoting Thompson v. Merrell Dow Pharmaceuticals, Inc., 766
`
`F.2d 1005, 1006 (6th Cir. 1985)). See also, Christianson, 486 U.S. at 810
`
`(addressing § 1338(a) jurisdiction for patent cases5, explaining that “a claim
`
`supported by alternative theories in the complaint may not form the basis for §
`
`1338(a) jurisdiction unless patent law is essential to each of those theories”) (citing
`
`Franchise Tax Board, 463 U.S. at 26); Manning v. Merrill Lynch Pierce Fenner &
`
`Smith, Inc., 772 F.3d 158, 164 (3d Cir. 2014) (concluding that federal jurisdiction
`
`was lacking and remanding to state court, noting that “even if Plaintiffs’ claims
`
`were partially predicated on federal law, federal law would still not be necessarily
`
`
`5 Although Christianson concerned 28 U.S.C. § 1338, dealing with actions “arising under” the
`patent laws, rather than § 1331, the Supreme Court has referenced the “identical language” in the
`two provisions and has applied the “same test” to both. 486 U.S. at 808; see also, Gunn, 568 U.S.
`at 257.
`
`16
`
`

`

`Case 1:20-cv-04946-AT Document 25 Filed 04/12/21 Page 17 of 29
`
`raised” where plaintiff could prevail upon state-law claims without need to prove
`
`or establish a violation of federal law); New Mexico ex rel. Balderas v. Purdue
`
`Pharma L.P., 323 F. Supp. 3d 1242, 1252 (D.N.M. 2018) (finding no federal
`
`jurisdiction, and thus remanding, in suit brought by state Attorney General where
`
`defendants’ liability, if any, did not hinge exclusively on federal law, since state law
`
`provided alternate theories of recovery) (citing Christianson, 486 U.S. at 810)6. As
`
`in these cases, the State’s right to relief does not “depend necessarily” on a question
`
`of federal law since a jury could find liability on the part of Defendants “without
`
`finding a violation of the FDCA.” Merrell Dow, 478 U.S. at 807. That the State will
`
`use the FDA regulations “as evidence” in support of Defendants’ allegedly false or
`
`misleading statements is “not the same thing as raising a substantial” question of
`
`federal law. Russo, 550 F.3d at 1009, supra at n. 6.
`
`Defendants’ argument that the FDA does not regulate their regenerative
`
`medicine products as a defense to Count III does not confer federal jurisdiction
`
`since the Court’s role is to examine only the well-pleaded complaint and “ignore
`
`potential defenses.” Beneficial Nat’l Bank, 539 U.S. at 6 (citing Louisville &
`
`Nashville R. v. Mottley, 211 U.S. 149, 152 (1908)). Consequently, applying the
`
`analysis articulated in Gunn to the present situation, federal jurisdiction cannot lie
`
`
`6 See also Russo v. Ballard Medical Products, 550 F.3d 1004, 1009 (10th Cir. 2008) (Gorsuch, J.)
`(assessing jurisdiction under § 1338(a) in patent case, finding no jurisdiction where state claims
`did not necessarily depend on resolution of substantial question of federal patent law where
`patents were mentioned in the complaint as evidence showing how defendant misappropriated
`designs but fact that patents could be used as evidence in aid of claim is “not the same thing as
`raising a substantial (or really, any) question of federal patent law”).
`
`17
`
`

`

`Case 1:20-cv-04946-AT Document 25 Filed 04/12/21 Page 18 of 29
`
`because the federal issue in question is not “necessarily raised” by the State’s
`
`Complaint. Gunn, 568 U.S. at 258.
`
`ii.
`
`Substantiality
`
`In addition, the Court finds that any federal issues raised in the State’s
`
`complaint are not “substantial” federal questions. The “substantiality inquiry”
`
`looks to “the importance of the issue to the federal system as a whole.” Gunn, 568
`
`U.S. at 260. In assessing the “importance to the federal system,” courts primarily
`
`“focus not on the interests of the litigants themselves, but rather on the broader
`
`significance” of the alleged federal question. Id. at 260-61. (“As our past cases
`
`show, however, it is not enough that the federal issue be significant to the
`
`particular parties in the immediate suit; that will always be true when the state
`
`claim ‘necessarily raise[s]’ a disputed federal issue, as Grable separately requires.”)
`
`For example, in Grable, the Court “emphasized the Government’s ‘strong interest’
`
`in being able to recover delinquent taxes through seizure and sale or property;” in
`
`Smith v. Kansas City Title & Trust Co., the Court focused on the general
`
`importance “of a determination that the Government ‘securities were issued under
`
`an unconstitutional law, and hence of no validity.’”7 Gunn, 568 U.S. at 260-61
`
`
`7 Defendants’ reliance on Kansas City Title & Trust, 255 U.S. 180 (1921), is inapposite. In that
`case, from 1921, the plaintiff brought suit to enjoin a company from issuing bonds under the
`Federal Farm Loan Act by claiming the statute itself was unconstitutional, and thus the crux of
`plaintiff’s case depended on showing a federal constitutional violation. This case does not involve
`a comparable issue of whether the FDCA is unconstitutional and the State’s case, which arises
`entirely under Georgia law, does not depend on its ability to show a violation of federal law.
`
`18
`
`

`

`Case 1:20-cv-04946-AT Document 25 Filed 04/12/21 Page 19 of 29
`
`(citing Grable, 545 U.S. at 310-11; Smith v. Kansas City Title & Trust Co., 255 U.S.
`
`180 (1921)).
`
`In this case, Defendants contend that the “determination of the FDA’s
`
`regulation of regenerative medicine products would have a significant impact on
`
`the manufacturers of those products and their compliance progr