Sullivan et al v. SmithKline Beecham Corporation

Filing 22

ORDER denying 8 Motion to Remand to State Court; denying 13 Motion to Stay; and denying 18 Motion for Hearing. Signed by Chief Judge David R. Herndon on 9/25/2013. (mtm) Modified on 9/25/2013 per chambers (bkl).

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
This Document Relates to:
Reeves, et al. v. SmithKline Beecham Corporation, 13-cv-675-DRHDGW;
Sullivan, et al. v. SmithKline Beecham Corporation, 13-cv-676DRH-DGW;
Jamison, et al. v. SmithKline Beecham Corporation, 13-cv-677DRH-DGW;
Font, et al. v. SmithKline Beecham Corporation, 13-cv-678-DRHDGW;
Williams, et al. v. SmithKline Beecham Corporation, 13-cv-680DRH-DGW;
Mekal, et al. v. SmithKline Beecham Corporation, 13-cv-683-DRHDGW; and,
Carroll, et al. v. SmithKline Beecham Corporation, 13-cv-685-DRHDGW.
HERNDON, Chief Judge:

MEMORANDUM & ORDER
I.

Introduction

Before the Court are plaintiffs’ motions to remand, defendant’s motions to
stay consideration of motion to remand pending transfer by judicial panel on
multidistrict litigation (JPML) to MDL 1871 (E.D. PA.), and defendant’s motions
for oral argument on plaintiffs’ motions to remand. For the following reasons, the
Court DENIES the motions to stay, DENIES the motions to remand, and also
DENIES the motions for oral argument. Oral argument is not necessary as the
parties’ briefing fully informs this Court of the parties’ arguments.

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II.

Pending Motions

1. Stay
The Court shall first address defendant’s motions to stay consideration of
plaintiffs’ requests for remand. While defendant may disagree, the Court feels
ruling on plaintiffs’ motions to remand is in the interests of judicial efficiency and
expediency in this instance. Plaintiffs correctly acknowledge that this Court’s “first
duty,” in this and every action before it, is “to determine the existence of subjectmatter jurisdiction.” Johnson v. Wattenbarger, 361 F.3d 991, 992 (7th Cir.
2004). Defendant cites plaintiffs’ pending motions to vacate the JPML’s
conditional transfer orders of these actions to MDL No. 1871. The pendency of
plaintiffs’ requests before the JPML does not change the fundamental importance
of this Court’s threshold jurisdictional inquiry. Based on the undersigned’s MDL
experience, this Court fully appreciates the considerations surrounding ruling on
motions of this type prior to consolidation. In this specific instance, the Court
feels the benefits of swiftly ruling on plaintiffs’ motions to remand outweigh the
concerns which may otherwise justify a stay. On this basis, defendant’s motions to
stay are denied.
2. Remand
At the heart of plaintiffs’ motions to remand is their contention that
diversity of citizenship does not exist in the above cases because defendant is a
citizen of Pennsylvania, similarly to numerous plaintiffs in the above actions. See
28 U.S.C. § 1332. Defendant is named in plaintiffs’ complaints as SmithKline
Beecham Corporation d/b/a/ GlaxoSmithKline (“GSK”). As plaintiffs are aware,
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GSK was converted in 2009 into a Delaware corporation and then into
GlaxoSmithKline LLC (“GSK LLC”), a Delaware limited liability company. GSK
LLC’s sole member is GlaxoSmithKline Holdings (Americas), Inc. (“GSK
Holdings”), a holding company incorporated in Delaware.
The relevant inquiry requires determination of GSK LLC’s citizenship for
purposes of the diversity statute. In the Seventh Circuit, and every circuit to have
addressed the issue, an LLC’s citizenship is determined by that of its individual
members. See IP of A West 86th Street 1, LLC v. Morgan Stanley Mortg. Capital
Holdings, LLC, 686 F.3d 361, 363 (7th Cir. 2012); Wise v. Wachovia Sec., LLC,
450 F.3d 265, 267 (7th Cir. 2006); Cosgrove v. Bartolotta, 150 F.3d 729, 731
(7th Cir. 1998). Accordingly, this Court finds plaintiffs’ persistent argument that
GSK LLC’s principal place of business should determine its citizenship
definitively unpersuasive.
As GSK LLC’s sole member, the citizenship of GSK Holdings determines
the outcome of the instant dispute. As a corporation, GSK Holdings’ citizenship is
determined by both its state of incorporation and the state “where it has its
principal place of business.” 28 U.S.C. § 1332(c)(1). In 2010, the Supreme Court
resolved that the “phrase ‘principal place of business’ refers to the place where the
corporation’s high level officers direct, control, and coordinate the corporation’s
activities[;]” “metaphorically called . . . the corporation’s ‘nerve center.’” Hertz
Corp. v. Friend, 559 U.S. 77, 80-81 (2010).
The Third Circuit, within which MDL No. 1871 is situated, recently held
that GSK Holdings’ “nerve center” is Delaware. Thus, as it is a holding company
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incorporated in Delaware, GSK Holdings is a citizen of Delaware. See Johnson v.
SmithKline Beecham Corp., 724 F.3d 337, 352-357 (3d. Cir. 2013). While
plaintiffs argue the Third Circuit wrongly decided Johnson, this Court finds
Johnson’s reasoning persuasive and thus adopts its findings and holdings.
Accordingly, upon review of the parties’ arguments and in light of the persuasive
reasoning of Johnson, which this Court adopts as its own, the Court finds GSK
Holdings is a citizen of Delaware. Therefore, GSK LLC is a citizen of Delaware;
not Pennsylvania. On this basis, plaintiffs’ motions to remand are denied.
III.

Conclusion

On the basis of the above, defendant’s motions to stay are DENIED,
plaintiffs’ motions to remand are DENIED, and defendant’s motions for hearing
are DENIED.
IT IS SO ORDERED.
Signed this 25th day of September, 2013.

Digitally signed by
David R. Herndon
Date: 2013.09.25
13:59:16 -05'00'
Chief Judge
United States District Judge

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