Joyce Wearstler v. DePuy Orthopaedics Inc et al

Filing 5

MINUTES OF IN CHAMBERS - COURT ORDER by Judge Percy Anderson: Since Defendants have failed to meet their heavy burden of showing that Dr. Schmalzried was fraudulently joined, this action may not be removed because defendant is a citizen of the State in which the action is brought. Neither the "four corners" of the Complaint nor the Notice of Removal contain sufficient allegations concerning Section 1332's requirements. Therefore, Defendants have not met their burden to establish t his Court's jurisdiction.Accordingly, the Court remands this action to the Los Angeles County Superior Court, Case No. BC505564, for lack of federal subject matter jurisdiction. ( Case Terminated. Made JS-6 ) Court Reporter: Not Reported. (Attachments: # 1 CV-103 Remand Transmittal Letter) (gk)

JS-6

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 13-3304 PA (AJWx)

Title

Joyce Wearstler v. DePuy Orthopaedics, Inc., et al.

Present: The
Honorable

Date

May 10, 2013

PERCY ANDERSON, UNITED STATES DISTRICT JUDGE

Paul Songco

Not Reported

N/A

Deputy Clerk

Court Reporter

Tape No.

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants:

None

None

Proceedings:

IN CHAMBERS - COURT ORDER

Before the Court is a Notice of Removal filed by defendants DePuy Orthopaedics, Inc.; Johnson
& Johnson (erroneously sued as Johnson & Johnson, Inc.); and Johnson & Johnson Services, Inc.
(“Defendants”). Defendants assert that this Court has jurisdiction over the action brought against them
by plaintiff Joyce Wearstler (“Plaintiff”) based on the Court’s diversity jurisdiction. See 28 U.S.C. §
1332.
Federal courts are courts of limited jurisdiction, having subject matter jurisdiction only over
matters authorized by the Constitution and Congress. See, e.g., Kokkonen v. Guardian Life Ins. Co.,
511 U.S. 375, 377, 114 S. Ct. 1673, 1675, 128 L. Ed. 2d 391 (1994). A suit filed in state court may be
removed to federal court if the federal court would have had original jurisdiction over the suit. 28
U.S.C. § 1441(a). A removed action must be remanded to state court if the federal court lacks subject
matter jurisdiction. 28 U.S.C. § 1447(c). “The burden of establishing federal jurisdiction is on the party
seeking removal, and the removal statute is strictly construed against removal jurisdiction.” Prize Frize,
Inc. v. Matrix (U.S.) Inc., 167 F.3d 1261, 1265 (9th Cir. 1999). “Federal jurisdiction must be rejected if
there is any doubt as to the right of removal in the first instance.” Gaus v. Miles, Inc., 980 F.2d 564,
566 (9th Cir. 1992).
In attempting to invoke this Court’s diversity jurisdiction, Defendants must prove that there is
complete diversity of citizenship between the parties and that the amount in controversy exceeds
$75,000. 28 U.S.C. § 1332. To establish citizenship for diversity purposes, a natural person must be a
citizen of the United States and be domiciled in a particular state. Kantor v. Wellesley Galleries, Ltd.,
704 F.2d 1088, 1090 (9th Cir. 1983). Persons are domiciled in the places they reside with the intent to
remain or to which they intend to return. See Kanter v. Warner-Lambert Co., 265 F.3d 853, 857 (9th
Cir. 2001). “A person residing in a given state is not necessarily domiciled there, and thus is not
necessarily a citizen of that state.” Id. For the purposes of diversity jurisdiction, a corporation is a
citizen of any state where it is incorporated and of the state where it has its principal place of business.
28 U.S.C. § 1332(c); see also Indus. Tectonics, Inc. v. Aero Alloy, 912 F.2d 1090, 1092 (9th Cir. 1990);
“[A] professional corporation is to be treated like other corporations for purposes of determining the
presence or absence of diversity jurisdiction.” Cote v. Wadel, 796 F.2d 981, 983 (7th Cir. 1986).
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JS-6

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 13-3304 PA (AJWx)

Date

Title

May 10, 2013

Joyce Wearstler v. DePuy Orthopaedics, Inc., et al.

For purposes of diversity, Plaintiff is a citizen of Maryland; DePuy Orthopaedics, Inc. is a citizen
of Indiana; Johnson & Johnson, and Johnson & Johnson Services, Inc. are citizens of New Jersey; and
non-removing defendant Thomas P. Schmalzried, M.D., a Professional Corporation (“Dr. Schmalzried”)
is a citizen of California.
Since Dr. Schmalzried is a citizen of California, removal is prohibited. Where the complete
diversity requirement is met, removal is not permitted where one of the defendants is a “citizen of the
State in which such action is brought.” 28 U.S.C. § 1441(b). Although Defendants acknowledge in
their Notice of Removal that Dr. Schmalzried is a citizen of California, they maintain that his citizenship
should be ignored because he has been fraudulently joined. If a plaintiff “fails to state a cause of action
against a resident defendant, and the failure is obvious according to the settled rules of the state, the
joinder of the resident defendant is fraudulent.” McCabe v. Gen. Foods Corp., 811 F.2d 1336, 1339 (9th
Cir. 1987). If the Court finds that the joinder of a non-diverse defendant is fraudulent, that defendant’s
presence in the lawsuit is ignored for the purposes of determining diversity. See, e.g., Morris v. Princess
Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir. 2001).
“There is a presumption against finding fraudulent joinder, and defendants who assert that
plaintiff has fraudulently joined a party carry a heavy burden of persuasion.” Plute v. Roadway Package
Sys., Inc., 141 F. Supp. 2d 1005, 1008 (N.D. Cal. 2001). A claim of fraudulent joinder should be denied
if there is any possibility that the plaintiff may prevail on the cause of action against the in-state
defendant. See id. at 1008, 1012. “The standard is not whether plaintiffs will actually or even probably
prevail on the merits, but whether there is a possibility that they may do so.” Lieberman v. Meshkin,
Mazandarani, 1996 WL 732506, at *3 (N.D. Cal. Dec. 11, 1996). “In determining whether a defendant
was joined fraudulently, the court must resolve ‘all disputed questions of fact and all ambiguities in the
controlling state law in favor of the non-removing party.’” Plute, 141 F. Supp. 2d at 1008 (quoting
Dodson v. Spiliada Maritime Corp., 951 F.2d 40, 42–43 (5th Cir. 1992)). A court should remand a case
“unless the defendant shows that the plaintiff ‘would not be afforded leave to amend his complaint to
cure [the] purported deficiency.’” Padilla v. AT&T Corp., 697 F. Supp. 2d 1156, 1159 (C.D. Cal. 2009)
(quoting Burris v. AT&T Wireless, Inc., 2006 WL 2038040, at *2 (N.D. Cal. July 19, 2006)).
Defendants contend that Dr. Schmalzried could not be found liable under Maryland law1/
because the strict liability and negligence claims against him will fail because he is not the manufacturer
or seller of the product at issue and the asserted claims are preempted when brought against nonmanufacturers of an FDA-approved product.

1/

Defendants’ Notice of Removal asserts that under California’s choice-of-law rules,
plaintiff’s claims are governed by the laws of the state where Ms. Wearstler received her hip implant
and allegedly suffered injury as a result. See Paulo v. Bepex Corp., 792 F.2d 894, 896 (9th Cir. 1986).
Defendants assume Ms. Wearstler received her hip implant in her home state of Maryland absent any
allegations to the contrary.
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JS-6

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.

CV 13-3304 PA (AJWx)

Date

Title

May 10, 2013

Joyce Wearstler v. DePuy Orthopaedics, Inc., et al.

The Court finds that Defendants have not met the “heavy burden of persuasion” that there is no
possibility that Plaintiffs may prevail on any of their claims against Dr. Schmalzried. Plaintiff’s
Complaint alleges that Defendants, including Dr. Schmalzried, supplied false information that the
implant was safe and posed no unacceptably high rate of failure, and that Plaintiff justifiably relied on
this material information to her detriment. Thus, neither the Complaint nor the evidence submitted in
support of the Notice of Removal forecloses the possibility of Plaintiff succeeding, at a minimum, on
her negligence claim. Nor have Defendants satisfied their burden to establish that Plaintiff would not be
granted leave to amend to cure any purported deficiency.
Since Defendants have failed to meet their heavy burden of showing that Dr. Schmalzried was
fraudulently joined, this action may not be removed because defendant is a citizen of the State in which
the action is brought. Neither the “four corners” of the Complaint nor the Notice of Removal contain
sufficient allegations concerning § 1332’s requirements. Therefore, Defendants have not met their
burden to establish this Court’s jurisdiction. See Harris v. Bankers Life & Cas. Co., 425 F.3d 689, 694
(9th Cir. 2005). Accordingly, the Court remands this action to the Los Angeles County Superior Court,
Case No. BC505564, for lack of federal subject matter jurisdiction. See 28 U.S.C. § 1447(c).
IT IS SO ORDERED.

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