Nelson v. Matrixx Initiatives, Inc. et al

Filing 46

ORDER GRANTING LEAVE TO FILE FIRST AMENDED COMPLAINT AND VACATING HEARING by Judge William Alsup [granting 36 Motion to Amend/Correct; Plaintiff is required to E-FILE the amended document]. (whasec, COURT STAFF) (Filed on 3/30/2012)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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MICHAEL NELSON,

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For the Northern District of California

United States District Court

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Plaintiff,

No. C 09-02904 WHA

v.
MATRIXX INITIATIVES, INC., a Delaware
corporation, ZICAM LLC, an Arizona limited
liability company, and DOES 1 through 25,
Defendants.
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INTRODUCTION
In this products-liability action, plaintiff moves for leave to file an amended complaint.
For the reasons stated below, plaintiff’s motion is GRANTED.

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ORDER GRANTING LEAVE
TO FILE FIRST AMENDED
COMPLAINT AND
VACATING HEARING

STATEMENT
Plaintiff, an attorney proceeding pro se, is a California resident. Plaintiff alleges that

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“defendant Matrixx Initiatives, Inc. is a Delaware corporation that conducts business in

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California,” and “defendant Zicam LLC is an Arizona limited liability company . . . that

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conducts business in California” as a wholly-owned subsidiary of defendant Matrixx.

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Defendants are engaged in the development, manufacture, and marketing of over-the-counter

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pharmaceuticals, including Zicam Cold Remedy Nasal Gel Swabs and Zicam Cold Remedy

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Nasal Gel Spray (Compl. ¶¶ 1–3, 8–10).

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In 2006, plaintiff used Zicam Cold Remedy Gel Swabs, and in 2008, he used the Zicam

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Cold Remedy Nasal Gel Spray. In late 2008, plaintiff felt an intense burning in his nostrils,

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after which he lost his sense of smell. Plaintiff has been informed that this is likely a permanent

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condition (id. at ¶¶ 22–29).

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Plaintiff first filed suit in state court in June 2009. The initial complaint alleged claims

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for (1) defective design, (2) defective product manufacture, and (3) negligence. The action was

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removed to this district the same month, and then transferred to multidistrict litigation in Arizona

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in November 2009. In March 2010, an MDL scheduling order issued, requiring that any

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amendments to the pleadings be filed by April 15, 2010 (Hudson Decl. Exh. B). In November
2011, the suit was transferred back to this district. A case management order issued in

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For the Northern District of California

United States District Court

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December 2011, giving plaintiff until February 29, 2012, to seek leave to add any new pleading

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amendments (Dkt. No. 29). Plaintiff filed the instant motion on February 21.

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Plaintiff’s amended complaint removes defendants Does and refers to the two Zicam

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products by the single term Zicam Cold Remedy Nasal Gel. Plaintiff also adds claims for

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(1) failure to warn, (2) intentional misrepresentation, (3) false promise, and (4) concealment.

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With these new claims, plaintiff now seeks punitive and treble damages.

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ANALYSIS

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Under FRCP 15(a)(2), leave to amend should be given when justice so requires.

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The underlying purpose of Rule 15 is to facilitate decisions on the merits, rather than on

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the pleadings or technicalities. United States v. Webb, 655 F.2d 977, 979 (9th Cir. 1981).

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This policy “should be applied with extreme liberality.” Ibid. In the absence of an apparent

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reason, such as undue delay, bad faith, undue prejudice, or futility of amendment, leave should

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be “freely given.” Foman v. Davis, 371 U.S. 178, 182 (1962).

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Plaintiff has filed a motion for leave to amend, along with a proposed amended

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complaint, within the time allowed by the case management order. In his amended complaint,

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plaintiff has removed defendants Does, has clarified that he is referring to both Zicam products

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throughout his complaint, and brings four new claims.

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Defendants do not argue that plaintiff has insufficiently pled the new claims.

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They instead argue that plaintiff did not file amendments by the MDL scheduling order deadline,

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even though plaintiff timely filed amendments under the case management order. When a suit

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is transferred from an MDL panel back to a district court, the district court judge has the power

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to vacate or modify rulings made by the panel, although “doing so in the absence of a significant

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change of circumstances would frustrate the purpose of centralized pretrial proceedings.”

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MANUAL FOR COMPLEX LITIGATION FOURTH § 20.133 at 225 (2004). Our court of appeals has

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not spoken on this issue. Defendants raised the issue of the MDL scheduling order in the joint

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case management statement, which was considered before the case management order issued
(Dkt. No. 28 at 6). Despite defendants’ arguments, the case management order held that plaintiff

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For the Northern District of California

United States District Court

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could seek leave to amend the complaint by February 29, 2012. This order finds that the parties

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should adhere to the case management order rather than the MDL scheduling order, even if no

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significant change of circumstances has occurred since the MDL scheduling order deadline.

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The goal of efficiently managing pretrial issues through MDL proceedings should not generally

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be frustrated. Yet in the interests of justice and the strong policy favoring a decision on the

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merits, plaintiff shall be given leave to amend his complaint.

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Granting plaintiff leave to amend his complaint would not be prejudicial.

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First, defendants do not contend that these new claims were foreclosed by the MDL.

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These claims conform to the run of claims in the MDL proceedings, and therefore cause no

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surprise to defendants. Second, the case management order provided ample time for pretrial

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discovery. Third, plaintiff’s amended complaint only builds upon what he already stated in his

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initial complaint. Plaintiff’s original complaint stated that defendants failed to warn plaintiff of

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the products’ side effects and that defendants knew the products were defective but willfully

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disregarded that knowledge (Compl. ¶¶ 18–20, 34–37, 42). In the amended complaint, these

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statements are broken down into separate claims for failure to warn, intentional

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misrepresentation, false promise, and concealment.

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Although defendants have not raised this issue, plaintiff has not sufficiently alleged
defendants’ citizenship for the purpose of diversity jurisdiction. In his first amended complaint,
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plaintiff must allege defendant Matrixx’s state of incorporation and the state where it has its

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principal place of business. 28 U.S.C. 1332(c)(1). Plaintiff must also allege the state(s) of

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which defendant Zicam’s owners/members are citizens. Johnson v. Columbia Properties

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Anchorage, LP, et al., 437 F.3d 894, 899 (9th Cir. 2006).

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CONCLUSION

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For the foregoing reasons, plaintiff’s motion for leave to file a first amended complaint

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is GRANTED. The answer or motion to dismiss is due in TWENTY CALENDAR DAYS.

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The hearing scheduled for April 5, 2012, is VACATED.

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IT IS SO ORDERED.

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For the Northern District of California

United States District Court

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Dated: March 30, 2012.

WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE

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