Casey et al v. Denton et al
ORDER denying 18 Motion to Remand to State Court. Per the Order at 43 , the parties are to proceed on the schedule for filing motions for leave to amend the complaint, answers, or other responsive pleadings given in 41 Joint Motion to Vacate Deadlines and Scheduling Conference Pending the Court's Adjudication of Plaintiffs' Motion to Remand. Signed by Judge David R. Herndon on 8/11/2017. (ceh)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
EAST ST. LOUIS DIVISION
JESSICA CASEY, et al.,
ROGER DENTON, et al.,
CASE NO: 3:17-cv-00521
ORDER ON MOTION TO REMAND
On May 16, 2017, the defendants Michael S. Burg (“Burg”) and Burg,
Simpson, Eldredge, Hersh & Jardine, P.C. (“Burg Simpson”) removed this action
to the United States District Court for the Southern District of Illinois from the
Twentieth Judicial Circuit, St. Clair County, Illinois. See Casey v. Denton, Case
No. 2017 L 250 (Cir.Ct.St.ClarCty, IL). The original action was filed as a putative
class action for one count of legal malpractice by plaintiffs Jessica Casey, Melody
Edwards, and Debbie Foster (“plaintiffs”) against numerous defendants stemming
from actions involving the multidistrict litigation, In re Yasmin and YAZ
(Drospirenone) Marketing, Sales Practices and Products Liability Litigation, MDL
2100, No. 3:09-md-02100-DRH-CJP (“MDL” or “Yaz MDL”).
defendants are Lead and/or Liaison counsel (and their respective law firms)
appointed by this Court to help aid in the efficient running of the MDL (Roger
Denton as Liaison Counsel, and Michael S. Burg, Michael A. London, and Mark R.
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Niemeyer as Co-Lead Counsel) and plaintiffs’ individually retained attorneys in the
underlying action (Daniel P. Massey, David M. Peterson, and Gregory McEwen,
respectively) and their individual law firms. The Yaz MDL consolidated personal
injury lawsuits relating to various plaintiffs’ use of Bayer Corporationmanufactured oral birth control, including YAZ, Yasmin, and the generic
equivalent, Gianvi. According to the MDL plaintiffs, these contraceptives caused
their varying injuries as a result of thrombotic events triggered by the components
used to make the drugs.
In their Complaint, plaintiffs allege claims of legal malpractice under
Illinois common law that concern the duties imposed on Lead and/or Liaison
counsel in a federal multi-district litigation. Specifically, plaintiffs bring suit due
to the purported failure of the Lead/Liaison counsel and individually retained
counsel to respond to a December 17, 2015 motion to dismiss (“MTD”) filed by
Bayer, which led to plaintiffs’ and the putative class’ dismissals with prejudice.
See Case Management Order No. 79 (“CMO 79”), 3:09-md-02100-DRH-CJP, D.E.
3789 and Order Granting with Prejudice Dismissal Pursuant to CMO 79, at e.g.,
Casey v. Bayer Healthcare Pharmaceuticals, Inc. et al., 3:14-cv-10387-DRH-PMF,
D.E. 7 (which will both be explored in more detail below). According to plaintiffs,
Lead/Liaison counsel held duties of trust, confidence, and loyalty to the putative
class members, and that those duties were breached by failing to respond to the
Compl. ¶¶ 57, 69-75.
Consequently, the putative class is defined as
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“All individuals who were prescribed, obtained and consumed Bayermanufactured Yaz and/or its generic, Bayer-manufactured
counterparts from January 1, 1999 up to and including the present
and whose cases against Bayer were dismissed with prejudice in the
U.S. District Court by its order of January 7, 2016 (docketed
January 11, 2016) for failure to comply with that Court’s standing
Case Management Order No. 79 . . .”
Compl. ¶ 26.
Defendants Burg and Burg Simpson removed this action under 28 USC §
1331, arguing that this Court has original jurisdiction because it is a “civil action
arising under the Constitution, laws, or treaties of the United States.” Id. These
defendants claim that plaintiffs’ allegations “call on the Court to reach
determinations regarding the nature of, and the extent of, the duties of lead and
liaison counsel in federal multidistrict litigation, appointed by a federal court,
pursuant to federal statute” and that the suit will require “interpretation of how
those duties were exercised pursuant to orders of this Court.” Notice of Removal,
D.E. 1, ¶ 7.
The Burg defendants also allege the Court has supplemental
jurisdiction over the malpractice claims against the individually retained attorneys
pursuant to 28 U.S.C. § 1367(a).
Plaintiffs object to the removal and moved to remand the action on June 9,
2017. Plaintiffs argue that the Class Action Fairness Act (“CAFA”) governs here
and that removal was improper because the “mass action filed by the Plaintiffs . . .
fails to meet jurisdictional requirements of more than 100 Plaintiffs as required
by the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d).”
Remand, D.E. 18, p. 2. The Court does not find plaintiffs’ arguments regarding
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CAFA persuasive, and for the following reasons, denies plaintiffs’ motion to
Federal courts are courts of limited jurisdiction, possessing only that power
authorized by the Constitution and statute. Gunn v. Minton, 133 S. Ct. 1059,
1064 (2013). A case cannot remain in federal court if the court cannot properly
exercise subject matter jurisdiction over the suit in question. Here, the statutes in
question that create federal jurisdiction are 28 U.S.C. § 1331, original or “arising
under” jurisdiction, and 28 U.S.C. § 1332(d), jurisdiction arising under CAFA.
Original jurisdiction, which defendants promote, may be found in two ways. One,
in all civil actions “arising under the Constitution, laws, or treaties of the United
States,” 28 U.S.C. § 1331, meaning that a federal law created the cause of action
presented in a complaint. See e.g. Rutledge v. Wal-Mart Stores, Inc., No. 06-4065
DRH, 2007 WL 685939, at *1 (S.D. Ill. Mar. 6, 2007) (Herndon, J). Or two, when
federal law does not actually create the cause of action presented in a complaint,
“a court must carefully consider whether the federal issue presented is
nonetheless substantial and not ‘collateral, peripheral or remote.’” Id. at *2,
quoting Merrel Dow Pharmaceuticals, Inc. v. Thompson, 478 U.S. 807 (1986).
Under this latter option, federal jurisdiction over a state law claim will lie “if a
federal issue is: 1. Necessarily raised; 2. Actually disputed; 3. Substantial; and 4.
Capable of resolution in federal court without disrupting the federal-state court
balance approved by Congress.” Gunn, 133 S. Ct. at 1065.
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Under plaintiffs’ theory of removal, CAFA is the only mechanism to remove
class or mass actions. Per the requirements of 28 U.S.C. § 1332(d)(2), the parties
must have minimal diversity and the claims must exceed the sum or value of
And, as plaintiffs highlight, per 28 U.S.C. § 1332(d)(11)(B)(i), a
mass action must contain the claims of 100 or more persons. Plaintiffs argue
then, that “the unavoidable defect in Burg’s theory of removal based upon CAFA
jurisdiction in this case is that the case contains only forty-four (44) Plaintiffs,
well short of the 100 plaintiffs required for the exercise of jurisdiction over
questions of fact and law in a mass action.” Motion to Remand, D.E. 18, p. 8.
Plaintiffs miss the mark arguing CAFA jurisdiction, as the Notice of
Removal filed by defendants does not even mention this statute. Section 1331,
original jurisdiction, and section 1332, CAFA jurisdiction, are two alternative
bases for removal. The Court agrees with defendants that is not true that “an
inability to meet CAFA’s prerequisites deprives the Court of jurisdiction for any
reason[.]” Opp. to Mtn. to Remand, D.E. 44, p. 8. See e.g., Stell v. Gibco Motor
Express, LLC, No. 3:15-CV-1105-DRH-DGW, 2016 WL 2620178, at *2 (S.D. Ill.
May 9, 2016) (Herndon, J), (“[T]he Court cannot conclude that CAFA is now the
exclusive means for establishing subject matter jurisdiction over class actions”),
and Blevins v. Aksut, 849 F.3d 1016, 1020 (11th Cir. 2017), (”Thus, when the
requirements of federal-question jurisdiction are met, district courts may exercise
jurisdiction over class actions[.]”)
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Because alternative bases for removal exist, plaintiffs are wrong to argue
solely CAFA jurisdiction and ignore defendants’ stated basis for removal, federal
question jurisdiction. See Schillinger v. Union Pac. Corp., No. 05-CV-0437-MJR,
2005 WL 6111635, at *1 (S.D. Ill. July 25, 2005) (Reagan, J) (implicitly
confirming that multiple paths exist to removal by Court’s review of notice of
removal containing alternate methods of removal and rejecting federal question
jurisdiction for reasons other than that class actions must fall under the purview
of CAFA). Thus, the Court will proceed to analyze the Burg defendants’ stated
basis for removal, original jurisdiction.
As stated above, when the cause of action does not directly arise from federal
law, a court must carefully consider whether the state law claims “implicate
significant federal issues” for federal jurisdiction to lie.
Grable & Sons Metal
Prod., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308, 312 (2005). To be significant,
the federal issue must be essential to the plaintiffs’ cause of action, U.S. Express
Lines Ltd. v. Higgins, 281 F.3d 383, 389 (3d Cir. 2002), and more importantly, be
significant “to the federal system as a whole.” Gunn, 133 S. Ct. at 1066. Thus,
federal jurisdiction is proper over a state law claim only when the federal issue is:
1. Necessarily raised; 2. Actually disputed; 3. Substantial; and 4. Capable of
resolution in federal court without disrupting the federal-state court balance
approved by Congress.” Id. at 1065. The Court will analyze each element in turn.
a. The Claims Presented by Plaintiffs Necessarily Raise a Federal Issue
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Here, plaintiffs allege claims of legal malpractice under Illinois common
law against the Lead/Liaison counsel appointed in the Yaz MDL and against their
individually retained attorneys hired to represent plaintiffs in the MDL. Some
further background is needed to fully understand the crux of plaintiffs’
The Yaz MDL, underlying the present lawsuit, consolidated over 10,000
personal injury claims related to the taking of Bayer-manufactured oral
contraceptives containing drospirenone.
Those claims were centralized to the
United States District Court for the Southern District of Illinois in October 2009.
To aid in the handling and efficiency of this massive litigation, the Court issued
Order No. 2, which appointed plaintiff leadership positions. See Order No. 2,
3:09-md-02100-DRH-CJP, D.E. 180. Among these positions and at the heart of
this matter, three attorneys were named Co-Lead Counsel, Mr. Burg, Mr. London,
and Mr. Niemeyer. Id. at 1. Additionally, Mr. Denton was appointed as Liaison
The function of the Lead/Liaison counsel was to help delegate
responsibilities and to aid in streamlining work product. Lead/Liaison counsel
was tasked with numerous duties to progress the MDL, the key one here
regarding motion practice. Under the “Miscellaneous” heading of Order No. 2, the
Court ordered that Lead/Liaison counsel “oppose when necessary any motions
submitted by defendants or other parties which involve matters within the sphere
of the responsibilities of [Lead\Liaison counsel].”
Id. at 5.
Examples of the
discrete responsibilities given to Lead/Liaison counsel include such tasks as
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serving as “the recipient for all Court orders on behalf of all of the plaintiffs,” to
“coordinate the establishment of a document depository,” and “to prepare
agendas for court conferences[.]” Id. at 2-3.
The responsibilities and duties assigned to the Lead/Liaison counsel are
important due to plaintiffs’ factual allegations claiming legal malpractice. Namely,
that Lead/Liaison counsel breached the duties imposed on them by this Court
when they failed to respond to a motion to dismiss filed by Bayer for certain
plaintiffs’ failure to comply with CMO 79.
Per plaintiffs’ complaint, each
individual defendant, “owed a duty to the Plaintiffs . . . to file a responsive
pleading to Bayer’s motion to dismiss[.]” Compl. at ¶ 79. The Court agrees with
defendants that, whether Lead/Liaison counsel owed plaintiffs a duty turns on a
federal question essential to the resolution of plaintiffs’ claims - that question
being, in an MDL context created under federal statute 28 U.S.C. § 1407, what is
the fiduciary relationship or the attorney/client relationship, between MDL
leadership and the individual plaintiffs within the litigation? Put another way, in a
federal MDL, what duties do leadership counsel owe individual plaintiffs?
Not only does the determination of MDL leadership counsel’s duties require
the Court to resolve an issue of federal law to adjudicate the present plaintiffs’
legal malpractice claims, but the Court’s resolution of this issue necessarily
implicates the federal system as a whole. (See Sec. III(c) infra). Thus, plaintiffs’
claims necessarily raise a federal issue.
b. The federal issue is actually disputed
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The Court will not go into great detail addressing element (b) as whether
Lead/Liaison counsel owed duties to the individual plaintiffs to respond to Bayer’s
MTD is at the crux of the legal malpractice claims, and therefore, actually
c. The federal issue implicated by plaintiffs’ claims is substantial
The federal issue of what comprises the fiduciary relationship between
Lead/Liaison counsel and the individual plaintiffs in the underlying litigation is
the predominate issue of this case.
What’s more, this issue is of substantial
importance “to the federal system as a whole.” Gunn, 133 S. Ct. at 1066.
national uniform decision on the make-up of the questioned relationship is
advantageous to the entire federal system as the answer to that question will set
precedent “once and for all” and can thereafter govern numerous multi-district
litigation cases. Empire Healthchoice Assur., Inc. v. McVeigh, 547 U.S. 677, 700
The matter of what fiduciary duties MDL leadership counsel owes the
individual plaintiffs in the multi-district litigation is a substantial federal issue
prevailing over the case at hand.
Without going into weighty detail, the Court
agrees with defendants that the implications of plaintiffs’ allegations can have farreaching effects on the tools federal courts have to manage complex litigation. For
example, rulings on the interplay between Lead/Liaison counsel’s responsibilities
towards individual plaintiff members and the responsibilities of individual
attorneys retained to represent each individual plaintiff, presents an important
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distinction and concept ripe to set the path for future litigation. Therefore, the
allegations made by plaintiffs present a substantial federal issue, significant to the
federal system as a whole, one that will benefit from “the experience, solicitude,
and hope of uniformity that” the federal forum offers.
Grable & Sons Metal
Prods., Inc., 545 U.S. at 212.
The federal issue of what duties are bestowed on MDL leadership counsel
in relation to individual plaintiffs is distinguishable from the issue analyzed in
Gunn, relied on by plaintiffs in support of their motion to remand. See generally,
Reply Memorandum, D.E. 45.
In Gunn, the U.S. Supreme Court held that
plaintiff’s legal malpractice claim did not arise under federal patent law. 133 S.
Ct. at 1065. Plaintiffs run with that statement and claim that the Gunn decision
stands for the proposition that no malpractice claim can create a substantial
federal issue, D.E. 45 at p. 3, because malpractice claims will never portend any
“forward-looking” consequences that can affect outside or future litigation.
review of Gunn however, reveals that the Supreme Court was analyzing only those
legal malpractice claims stemming from patent law. The Court made no sweeping
statement about malpractice claims launched from other areas of law.
In Gunn, the Supreme Court explained that the disputed patent issues were
“unlikely to have the sort of significance for the federal system necessary to
establish jurisdiction.” 133 S. Ct. at 1065. For the reasons explained above and
below, that is not true for the MDL leadership fiduciary question presented to this
Court. Here, addressing the fiduciary relationship between the litigants does not
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just solve the interests of the parties themselves, but has a much broader
significance on the federal system, as resolution of the issue will impact future
cases born from 28 US.C. § 1407. See e.g. Bender v. Jordan, 625 F.3d 1128,
1130 (D.C. Cir. 2010). The federal issue is not one that is bound by case specific
facts, where resolution will have no bearing on solving the malpractice claims.
Instead, the Court’s ruling on the federal issue of the duties held by Lead/Liaison
counsel will certainly have “forward-looking” consequences extended beyond the
current litigation and applicable to future MDL cases. Gunn. 133 S. Ct. at 1068.
Hence, this case is distinguishable from Gunn.
Finally, the question of what fiduciary duties plaintiff leadership counsel
owes to individual plaintiffs has been rarely litigated, if at all. (The closest case
this Court found on the present issue is Mitchell v. Smalley, No. 4:12-CV-00300HLM, 2014 WL 1248002 (N.D. Ga. Feb. 6, 2014) (Murphy, J). There, plaintiffs
brought legal malpractice claims against defendant leadership counsel of an MDL,
thus making it immediately distinguishable.
Ergo, the Smalley case provides
minimal assistance but even so, reviewing the case finds that a Georgia federal
court found no instance of malpractice by MDL leadership counsel due in part to
plaintiffs’ failure to follow the Standing Order. Id. at *6.) Clear guidance from the
federal courts is of obvious value here, to create consistent precedent moving
forward in an area of law not fully fleshed out by case law.
d. Federal jurisdiction over this cause of action would not disrupt the
federal-state court balance
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As discussed above, this case appears to be one of first impression.
Accepting jurisdiction will therefore upset few, if any, pending state court cases.
Plus, state courts, such as Illinois, do not have any interest in how federal courts
organize and manage multi-district litigations, including duties bestowed on any
agents of the MDL. Thus, this factor also leans in favor of accepting jurisdiction.
e. Supplemental Jurisdiction
Because the Court has original jurisdiction over the claims against
Lead/Liaison counsel, it may also exercise supplemental jurisdiction over certain
claims arising from the same case or controversy. This power comes from 28
U.S.C. § 13679(a) which states that “in any civil action of which the district courts
have original jurisdiction, the district courts shall have supplemental jurisdiction
over all other claims that are so related to claims in the action within such
original jurisdiction that they form part of the same case or controversy[.]” Here,
the malpractice allegations against both sets of defendants stem from the same
underlying controversy – the dismissal of the plaintiffs from the Yaz MDL due to a
failure to respond to Bayer’s motion to dismiss.
Thus, all malpractice claims
asserted by plaintiffs are properly before this federal forum.
This Court therefore finds that original jurisdiction exists over the federal
question of what fiduciary relationship exists between MDL leadership counsel
and individual plaintiffs in the MDL lawsuit.
That federal issue is necessarily
raised by the complaint, actually disputed by the parties, substantial to the
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lawsuit, is capable of resolution in federal court without disrupting the federalstate court balance approved by Congress. Because federal question jurisdiction
is found, supplemental jurisdiction is also proper over the malpractice claims
against the plaintiffs’ individually retained attorneys due to the allegations arising
from the same case or controversy. Thus, the motion to remand is denied.
It is so ORDERED.
Dated this 11th day of August, 2017.
by Judge David R.
UNITED STATES DISTRICT JUDGE
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