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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1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA 8 9 WENDELL RICE, et al., 11 For the Northern District of California United States District Court 10 Plaintiffs, 12 13 14 v. Defendants. / 16 18 ORDER GRANTING MOTION TO REMAND AND VACATING HEARING MCKESSON CORPORATION, et al., 15 17 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. 19 STATEMENT 20 This action is one of many currently pending in California state and federal courts 21 regarding alleged harms to consumers from pharmaceutical products containing propoxyphene. 22 The instant action was originally filed in California state court on November 15, 2011. 23 Defendants removed on the basis of diversity jurisdiction, arguing that the non-diverse plaintiffs 24 and defendants were fraudulently joined. Subsequently, the case was transferred by the 25 Judicial Panel on Multi-District Litigation to MDL No. 2226 pending in the Eastern District of 26 Kentucky. Judge Danny Reeves then remanded this action (among others) back to California 27 Superior Court. 28 1 On October 23, 2012, plaintiffs filed a motion with the California Judicial Counsel to 2 coordinate this action with numerous related actions co-pending in California state court. 3 Plaintiffs’ coordination petition memorandum stated that “[o]ne judge hearing all of the actions 4 for all purposes in a selected site or sites will promote the ends of justice,” and that “[f]ailure to 5 coordinate these actions will result in the disadvantages of duplicate and inconsistent rulings, 6 orders or judgments” (Dkt. No. 66-1 at 8, 10 (emphasis added)). 7 Defendants subsequently removed the action a second time. Plaintiffs now move to 8 remand. Defendants oppose, arguing that the petition to coordinate “for all purposes” rendered 9 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 11 For the Northern District of California United States District Court 10 plaintiffs and/or defendants were fraudulently joined. 12 ANALYSIS 13 A defendant may remove a civil action from state court to federal court if original 14 jurisdiction would have existed at the time the complaint was filed. 28 U.S.C. 1441(a). If the 15 case stated by the initial pleading was not removable, a defendant may remove within 30 days of 16 receipt of an amended pleading, motion, order, or other paper that renders the action removable. 17 28 U.S.C. 1446(b)(2). 18 Under CAFA, removal is proper in “mass action” suits so long as the following 19 requirements are met: (1) the amount in controversy exceeds five million dollars; (2) there is 20 minimal diversity, where at least one plaintiff is diverse from one defendant; (3) the monetary 21 relief claims of 100 or more plaintiffs are proposed to be tried jointly on the grounds that the 22 plaintiffs’ claims involve common questions of law or fact; and, (4) at least one plaintiff’s claim 23 exceeds $75,000. 28 U.S.C. 1332(d); Abrego v. Dow Chem. Co., 443 F.3d 676, 689 (9th Cir. 24 2006). 25 “[R]emoval statutes are strictly construed against removal.” Luther v. Countrywide 26 Homes Loans Servicing, LP, 533 F.3d 1031, 1034 (9th Cir. 2008). “Federal jurisdiction must be 27 rejected if there is any doubt as to the right of removal in the first instance,” such that courts 28 must resolve all doubts as to removability in favor of remand. Gaus v. Miles, Inc., 980 F.2d 564, 2 1 566 (9th Cir. 1992). The burden of establishing that federal jurisdiction exists is on the party 2 seeking removal. Id. at 566–67. 3 District courts have original jurisdiction over all civil actions “where the matter in 4 controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between 5 . . . citizens of different States.” 28 U.S.C. 1332(a). When federal subject-matter jurisdiction is 6 predicated on diversity of citizenship, complete diversity must exist between the opposing 7 parties. Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 373–74 (1978). A non-diverse 8 party named in a complaint can be disregarded for purposes of determining whether diversity 9 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. 11 For the Northern District of California United States District Court 10 1. 12 Defendants contend that the instant action is a “mass action” under CAFA because the 13 monetary claims of 100 or more persons are proposed to be tried jointly. This order disagrees. 14 To begin with, the number of plaintiffs in this action falls far short of 100 persons. Plaintiffs’ 15 petition for coordination before the California Judicial Counsel identifies seven actions including 16 141 individual plaintiffs and, according to defendants, plaintiffs’ counsel have represented in an 17 email that they wish to include more than a 1000 plaintiffs’ claims in their request for 18 coordination. Plaintiffs’ petition for coordination, however, is bereft of any explicit proposal that 19 the claims of these plaintiffs be tried jointly. 20 Defendants attach great weight to the word “proposed” in the statute. They contend that 21 plaintiffs have implicitly proposed a removable mass action in their coordination petition by 22 using the ambiguous language “for all purposes” and by raising the possibility of “inconsistent 23 judgments.” This contention is unpersuasive. Our court of appeals has explained that the “mass 24 action” provisions of CAFA are narrowly drawn and Congress did not intend to “allow courts to 25 override the considered legislative limitations in the ‘mass action’ concept.” Tanoh v. Dow 26 Chem. Co., 561 F.3d 945, 953–954 (9th Cir. 2009). CAFA also expressly exempts claims 27 “consolidated or coordinated solely for pretrial proceedings” from the definition of “mass 28 actions.” Id. at 954 (citing 28 U.S.C. 1332(d)(11)(B)(ii)(IV)). For their part, plaintiffs insist that 3 1 they filed the motion for coordination solely for pretrial purposes. Construing plaintiffs’ petition 2 for coordination as the functional equivalent of an express request for a joint trial would conflict 3 with both the guidance proved by our court of appeals in Tanoh, as well as with the general 4 canon of strict construction of removal statues. 5 Defendants’ reliance on the Seventh Circuit’s reasoning in In re Abbot Labs., Inc., 698 6 F.3d 568 (7th Cir. 2012), is misplaced. Courts in this district are bound by the authority of our 7 own court of appeals. Abbot Labs is also distinguishable on its facts. In Abbot Labs, the 8 plaintiffs’ memorandum requesting consolidation specifically stated they were requesting 9 consolidation “through trial” and “not solely for pretrial proceedings.” Id. at 571. In this action, 11 For the Northern District of California United States District Court 10 the plaintiffs’ petition for coordination contains no such language. In short, defendants’ removal petition was, at best, premature. Plaintiffs will be held to 12 their representation that they do not and will not seek a joint trial and the action shall be 13 REMANDED to state court. “Plaintiffs’ separate state court actions may, of course, become 14 removable at [some] later point if plaintiffs seek to join the claims for trial.” Tanoh, 561 F.3d at 15 956. If, following remand, the coordinating judge and/or plaintiffs propose a joint trial and the 16 action meets CAFA’s other statutory requirements, then defendants may remove the action once 17 again to this district court. 18 2. 19 In a footnote in their opposition, defendants assert that diversity jurisdiction is proper DEFENDANTS FAIL TO ESTABLISH MISJOINDER. 20 because certain plaintiffs and defendants are fraudulently joined. Defendants do not brief their 21 contention that diversity jurisdiction is proper. Instead, they attempt to incorporate by reference 22 arguments from prior submissions. Defendants admit that their misjoinder contentions were 23 rejected by Judge Reeves in the Eastern District of Kentucky the first time they removed this 24 action. See In re Darvocet, Darvon and Propoxyphene Prod. Liab. Lit., No. 2:12-cv-00135- 25 DCR, Dkt. No. 33 (E.D. Ky. Aug. 7, 2012); Freitas v. McKesson Corp., No. 2:12-50-DCR, Dkt. 26 No. 86 (E.D. Ky. July 17, 2012). Defendants also admit that they raise these points by footnote 27 solely to avoid waiver. 28 4 1 Defendants do not challenge Judge Reeves’ holdings or reasoning. Nor do they explain 2 why they should not be estopped from asserting diversity jurisdiction a second time. Given that 3 defendants have failed to brief their contentions, the undersigned sees no reason to question 4 Judge Reeves’ holdings and attempt to manufacture a basis for federal jurisdiction that that 5 defendants themselves fail to articulate. 6 7 CONCLUSION For the reasons mentioned above, the motion to remand is GRANTED. The Clerk shall 8 FORWARD THE FILE 9 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. 11 For the Northern District of California United States District Court 10 to the Superior Court of California, County of San Francisco. The January 12 IT IS SO ORDERED. 13 14 Dated: January 7, 2013. WILLIAM ALSUP UNITED STATES DISTRICT JUDGE 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5

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