Travis et al v. McKesson Corporation et al

Filing 25

ORDER GRANTING MOTION TO REMAND AND DENYING MOTION TO STAY AND VACATING HEARING by Judge William Alsup [denying 11 Motion to Stay; granting 12 Motion to Remand]. (whasec, COURT STAFF) (Filed on 8/23/2013)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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Plaintiffs,
For the Northern District of California

United States District Court

BRENDA ARMSTRONG, et al.,
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No. C 13-03113 WHA

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v.
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MCKESSON CORPORATION, a
California corporation, SMITHKLINE
BEECHAM CORPORATION d/b/a/
GLAXOSMITHKLINE LLC, a
corporation, and DOES 1–100, inclusive,

ORDER GRANTING MOTION
TO REMAND AND DENYING
MOTION TO STAY AND
VACATING HEARING

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Defendants.
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/

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In this pharmaceutical products-liability action, plaintiffs move to remand to state court
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for lack of federal jurisdiction while defendants move to stay all proceedings pending potential
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transfer to an MDL. For the reasons stated below, plaintiffs’ motion to remand is GRANTED
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and defendants’ motion to stay is DENIED. The hearing on September 12, 2013, is VACATED.
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Plaintiffs filed a complaint in the Superior Court of the State of California for the County
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of San Francisco in June 2013 for alleged injuries from the use of Avandia, a prescription
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pharmaceutical used to treat type-2 diabetes. Among other defendants, plaintiffs filed suit
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against McKesson Corporation, a California-based pharmaceutical distributor. Defendant
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GlaxoSmithKline LLC removed the action to federal court on fraudulent joinder grounds and
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moved to stay this action pending transfer to the Avandia MDL in the United States District
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Court for the Eastern District of Pennsylvania. Plaintiffs then filed a motion to remand, arguing

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that this Court should first consider the merits of its motion before entertaining any stay of these

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proceedings.

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Our court of appeals has not yet addressed whether courts must first decide the merits

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of a motion to remand before determining whether to stay the proceedings. Generally speaking,

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a stay is warranted if this would serve judicial economy. See, e.g., In re Iphone Application

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Litig., No. 10-5878, 2011 WL 2149102, at *2 (N.D. Cal. May 31, 2011) (Judge Lucy Koh).

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In similar actions involving Avandia, courts in this district have granted a stay. Those courts

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found that doing so would promote judicial economy because the MDL judge has addressed
issues of “fraudulent joinder, fraudulent misjoinder of plaintiffs, the forum defendant rule, and

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For the Northern District of California

United States District Court

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questions relating to removal by defendants who have not yet been served.” See, e.g., Poff v.

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McKesson, No. 13-3115, 2013 WL 3949207, at *2 (N.D. Cal. July 30, 2013) (Judge Jeffrey

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White); see also Flores v. McKesson, No. 13-3153 (N.D. Cal. Aug. 2, 2013) (Judge Jon Tigar);

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Alvarez v. McKesson, No. 13-3112 (N.D. Cal. July 24, 2013) (Judge Thelton Henderson).

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Given, however, the circumstances of the instant action, namely that the MDL has already

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remanded similar actions because it found that McKesson had not been fraudulently joined, this

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order finds differently.

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The question of whether a motion to stay, pending transfer to an MDL, should be decided

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before a motion to remand occurs frequently. It is best to rule in the way that most furthers

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judicial economy, unless this would unreasonably prejudice one of the parties. Thus, when a

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jurisdictional issue has not yet arisen before the MDL, a motion to stay has been denied and the

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action remanded to state court because burdening the MDL with a new jurisdictional issue would

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not be in the interest of judicial economy. Marble v. Organon, No. 12-2213, 2012 WL 2237271,

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at *3 (N.D. Cal. June 15, 2012). Where, however, other cases pending before the MDL have

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raised the same jurisdictional issue, a stay was granted because it would be in the interest of

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judicial economy to have all these issues decided together. See, e.g., Addison v. Bristol-Meyers

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Squibb Co., No. 13-2166, 2013 WL 3187859, at *1 (N.D. Cal. June 21, 2013).

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Here, the MDL has already ruled on the jurisdictional issue at stake. Defendant GSK

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removed the action to federal court on July 3, 2013. Plaintiffs’ supplemental briefing shows,

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however, that no defendant had been served on that date. The MDL found that “when no

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defendant has been served, but a forum defendant has been named, the citizenship of the

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forum defendant may not be ignored for purposes of Section 1441(b)” and removal is proper.

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In re Avandia, 624 F. Supp. 2d 396, 411 (E.D. Pa. 2009) (Judge Cynthia Rufe). Under these

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circumstances, judicial economy would not be served by a transfer to the MDL only to have the

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MDL court remand the action back to state court.

and that upon its information and belief, McKesson had also not been served (Dkt. No. 1 at 5).

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For the Northern District of California

GSK concedes that it had not been served with the complaint when it removed the case

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United States District Court

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MDL Judge Cynthia Rufe has already found that in this specific fact pattern, a remand is proper:

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“[b]ecause removal occurred before any Defendant was served, the Court will . . . remand the

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action.” In re Avandia, 624 F. Supp. 2d at 422.

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This order is not persuaded by GSK’s contention that it would suffer prejudice if a stay is

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denied when it removed the action from state court despite the MDL’s ruling that such removal

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is improper. To the contrary, it would cause undue prejudice to plaintiffs to be forced to file and

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argue motions to remand in two different courts before being sent back to square one — state

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court, where this action belongs.

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This order is likewise unpersuaded by GSK’s argument that claims against McKesson are

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preempted by the Supreme Court’s decision in PLIVA, Inc. v. Mensing, 131 S. Ct. 2567 (2011).

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A preemption defense goes to the merits of a plaintiff’s case and cannot overcome the strong

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presumption against removal jurisdiction. Hunter v. Philip Morris USA, 582 F.3d 1039, 1045

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(9th Cir. 2009). GSK also argues that this action is nonetheless removable under Section 1332.

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Not so. The MDL has decided that in actions like this one, McKesson was not fraudulently

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joined. Diversity as required by Section 1332(2)(a) is therefore lacking. The action is also not

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removable under CAFA, because removal of a mass action under CAFA requires that the action

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involves at least 100 plaintiffs. 28 U.S.C. 1332(d)(11)(B)(I). That requirement is not met in the

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present action.
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GSK will not be granted a stay since the MDL has already made clear this action should

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be remanded. GSK’s motion to stay is therefore DENIED and plaintiffs’ motion to remand is

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GRANTED. The September 12 hearing is VACATED. The Clerk shall REMAND the action to

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the Superior Court for the County of San Francisco.

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IT IS SO ORDERED.

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Dated: August 23, 2013.

WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE

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For the Northern District of California

United States District Court

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