Rice et al v. McKesson Corporation

Filing 70

ORDER GRANTING REMAND AND VACATING HEARING by Hon. William Alsup granting 58 Motion to Remand.(whalc1, COURT STAFF) (Filed on 1/7/2013)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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WENDELL RICE, et al.,

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For the Northern District of California

United States District Court

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Plaintiffs,

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v.

Defendants.
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ORDER GRANTING MOTION
TO REMAND AND VACATING
HEARING

MCKESSON CORPORATION, et al.,

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No. C 12-05949 WHA

INTRODUCTION
In this pharmaceutical product liability action, plaintiffs move to remand the action back
to state court. For the reasons stated below, the motion is GRANTED.

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STATEMENT

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This action is one of many currently pending in California state and federal courts

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regarding alleged harms to consumers from pharmaceutical products containing propoxyphene.

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The instant action was originally filed in California state court on November 15, 2011.

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Defendants removed on the basis of diversity jurisdiction, arguing that the non-diverse plaintiffs

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and defendants were fraudulently joined. Subsequently, the case was transferred by the

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Judicial Panel on Multi-District Litigation to MDL No. 2226 pending in the Eastern District of

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Kentucky. Judge Danny Reeves then remanded this action (among others) back to California

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Superior Court.

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On October 23, 2012, plaintiffs filed a motion with the California Judicial Counsel to

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coordinate this action with numerous related actions co-pending in California state court.

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Plaintiffs’ coordination petition memorandum stated that “[o]ne judge hearing all of the actions

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for all purposes in a selected site or sites will promote the ends of justice,” and that “[f]ailure to

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coordinate these actions will result in the disadvantages of duplicate and inconsistent rulings,

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orders or judgments” (Dkt. No. 66-1 at 8, 10 (emphasis added)).

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Defendants subsequently removed the action a second time. Plaintiffs now move to

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remand. Defendants oppose, arguing that the petition to coordinate “for all purposes” rendered

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removal proper under the Class Action Fairness Act (“CAFA”). Defendants also contend (again)
in a footnote that removal was proper on the basis of diversity jurisdiction because certain

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For the Northern District of California

United States District Court

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plaintiffs and/or defendants were fraudulently joined.

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ANALYSIS

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A defendant may remove a civil action from state court to federal court if original

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jurisdiction would have existed at the time the complaint was filed. 28 U.S.C. 1441(a). If the

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case stated by the initial pleading was not removable, a defendant may remove within 30 days of

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receipt of an amended pleading, motion, order, or other paper that renders the action removable.

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28 U.S.C. 1446(b)(2).

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Under CAFA, removal is proper in “mass action” suits so long as the following

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requirements are met: (1) the amount in controversy exceeds five million dollars; (2) there is

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minimal diversity, where at least one plaintiff is diverse from one defendant; (3) the monetary

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relief claims of 100 or more plaintiffs are proposed to be tried jointly on the grounds that the

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plaintiffs’ claims involve common questions of law or fact; and, (4) at least one plaintiff’s claim

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exceeds $75,000. 28 U.S.C. 1332(d); Abrego v. Dow Chem. Co., 443 F.3d 676, 689 (9th Cir.

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2006).

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“[R]emoval statutes are strictly construed against removal.” Luther v. Countrywide

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Homes Loans Servicing, LP, 533 F.3d 1031, 1034 (9th Cir. 2008). “Federal jurisdiction must be

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rejected if there is any doubt as to the right of removal in the first instance,” such that courts

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must resolve all doubts as to removability in favor of remand. Gaus v. Miles, Inc., 980 F.2d 564,
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566 (9th Cir. 1992). The burden of establishing that federal jurisdiction exists is on the party

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seeking removal. Id. at 566–67.

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District courts have original jurisdiction over all civil actions “where the matter in

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controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between

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. . . citizens of different States.” 28 U.S.C. 1332(a). When federal subject-matter jurisdiction is

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predicated on diversity of citizenship, complete diversity must exist between the opposing

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parties. Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 373–74 (1978). A non-diverse

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party named in a complaint can be disregarded for purposes of determining whether diversity

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jurisdiction exists if a district court determines that the party’s inclusion in the action is a “sham”
or “fraudulent.” McCabe v. Gen. Foods Corp., 811 F.2d 1336, 1339 (9th Cir. 1987).
REMOVAL UNDER CAFA WAS IMPROPER.

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For the Northern District of California

United States District Court

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1.

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Defendants contend that the instant action is a “mass action” under CAFA because the

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monetary claims of 100 or more persons are proposed to be tried jointly. This order disagrees.

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To begin with, the number of plaintiffs in this action falls far short of 100 persons. Plaintiffs’

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petition for coordination before the California Judicial Counsel identifies seven actions including

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141 individual plaintiffs and, according to defendants, plaintiffs’ counsel have represented in an

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email that they wish to include more than a 1000 plaintiffs’ claims in their request for

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coordination. Plaintiffs’ petition for coordination, however, is bereft of any explicit proposal that

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the claims of these plaintiffs be tried jointly.

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Defendants attach great weight to the word “proposed” in the statute. They contend that

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plaintiffs have implicitly proposed a removable mass action in their coordination petition by

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using the ambiguous language “for all purposes” and by raising the possibility of “inconsistent

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judgments.” This contention is unpersuasive. Our court of appeals has explained that the “mass

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action” provisions of CAFA are narrowly drawn and Congress did not intend to “allow courts to

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override the considered legislative limitations in the ‘mass action’ concept.” Tanoh v. Dow

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Chem. Co., 561 F.3d 945, 953–954 (9th Cir. 2009). CAFA also expressly exempts claims

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“consolidated or coordinated solely for pretrial proceedings” from the definition of “mass

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actions.” Id. at 954 (citing 28 U.S.C. 1332(d)(11)(B)(ii)(IV)). For their part, plaintiffs insist that
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they filed the motion for coordination solely for pretrial purposes. Construing plaintiffs’ petition

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for coordination as the functional equivalent of an express request for a joint trial would conflict

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with both the guidance proved by our court of appeals in Tanoh, as well as with the general

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canon of strict construction of removal statues.

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Defendants’ reliance on the Seventh Circuit’s reasoning in In re Abbot Labs., Inc., 698

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F.3d 568 (7th Cir. 2012), is misplaced. Courts in this district are bound by the authority of our

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own court of appeals. Abbot Labs is also distinguishable on its facts. In Abbot Labs, the

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plaintiffs’ memorandum requesting consolidation specifically stated they were requesting

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consolidation “through trial” and “not solely for pretrial proceedings.” Id. at 571. In this action,

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For the Northern District of California

United States District Court

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the plaintiffs’ petition for coordination contains no such language.
In short, defendants’ removal petition was, at best, premature. Plaintiffs will be held to

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their representation that they do not and will not seek a joint trial and the action shall be

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REMANDED to state court. “Plaintiffs’ separate state court actions may, of course, become

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removable at [some] later point if plaintiffs seek to join the claims for trial.” Tanoh, 561 F.3d at

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956. If, following remand, the coordinating judge and/or plaintiffs propose a joint trial and the

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action meets CAFA’s other statutory requirements, then defendants may remove the action once

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again to this district court.

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2.

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In a footnote in their opposition, defendants assert that diversity jurisdiction is proper

DEFENDANTS FAIL TO ESTABLISH MISJOINDER.

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because certain plaintiffs and defendants are fraudulently joined. Defendants do not brief their

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contention that diversity jurisdiction is proper. Instead, they attempt to incorporate by reference

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arguments from prior submissions. Defendants admit that their misjoinder contentions were

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rejected by Judge Reeves in the Eastern District of Kentucky the first time they removed this

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action. See In re Darvocet, Darvon and Propoxyphene Prod. Liab. Lit., No. 2:12-cv-00135-

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DCR, Dkt. No. 33 (E.D. Ky. Aug. 7, 2012); Freitas v. McKesson Corp., No. 2:12-50-DCR, Dkt.

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No. 86 (E.D. Ky. July 17, 2012). Defendants also admit that they raise these points by footnote

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solely to avoid waiver.

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Defendants do not challenge Judge Reeves’ holdings or reasoning. Nor do they explain

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why they should not be estopped from asserting diversity jurisdiction a second time. Given that

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defendants have failed to brief their contentions, the undersigned sees no reason to question

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Judge Reeves’ holdings and attempt to manufacture a basis for federal jurisdiction that that

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defendants themselves fail to articulate.

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CONCLUSION
For the reasons mentioned above, the motion to remand is GRANTED. The Clerk shall

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FORWARD THE FILE

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10 hearing is VACATED. Plaintiffs’ request for costs and attorney’s fees associated with seeking
remand is DENIED. All other pending motions are DENIED as MOOT.

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For the Northern District of California

United States District Court

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to the Superior Court of California, County of San Francisco. The January

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IT IS SO ORDERED.

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Dated: January 7, 2013.

WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE

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