L.B.F.R. et al v. Eli Lilly and Company et al
MEMORANDUM OPINION AND ORDER; (1) The plaintiffs Motion to Remand (MDL Record No. 1806, 55 in case 2-12-CV-52 is GRANTED. (2) The Motions to Dismiss of California Management, LLC (MDL Record No. 1917, (76) in case 2-12-cv-52) and Southwood Pharmaceu ticals, Inc. (MDL Record No. 1954, 79 in case 2-12-cv-52 are DENIED, without prejudice, as moot. (3) This action is REMANDED to the Superior Court of California, Los Angeles County, and STRICKEN from this Courts docket.. Signed by Judge Danny C. Reeves on 7/16/2012. Associated Cases: 2:11-md-02226-DCR, 2:12-cv-00052-DCR(LST)cc: COR, JPMDL, California Superior Court w/Certified copies of docket sheet and order via U.S. Mail, CACD w/certified copies of docket sheet and order via EMail
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
IN RE: DARVOCET, DARVON AND
L.B.F.R., et al. v. Eli Lilly & Co., et al.,
Master File No. 2: 11-md-2226-DCR
MDL Docket No. 2226
Civil Action No. 2: 12-52-DCR
*** *** *** ***
Plaintiffs L.B.F.R. and J.L.L.F., minors suing by and through their guardian Diane Laws,
have filed a motion to remand this case to the Superior Court of California, Los Angeles County.
[MDL Record No. 1806] The plaintiffs, who are California citizens, maintain that their postremoval joinder of two California defendants defeats diversity and deprives the Court of subject
matter jurisdiction. According to Defendant Eli Lilly and Company, however, its co-defendants
were fraudulently joined, and the case may properly remain in federal court. For the reasons
explained below, the motion for remand will be granted.
The plaintiffs filed this lawsuit on December 16, 2011, asserting claims related to their
deceased mother’s ingestion of prescription drugs containing propoxyphene. [Record No. 1, p.
9; see id., p. 10 ¶¶ 2-3]1 The initial complaint named as defendants Eli Lilly and Company
All citations to the record relate to Civil Action No. 2: 12-52 unless otherwise indicated.
(“Lilly”); Watson Pharmaceuticals, Inc. (“Watson”); and “Does 1-100.” [Id., p. 9] Although the
plaintiffs alleged that Watson was a California citizen, Lilly stated in its Notice of Removal that
Watson was in fact a citizen of Nevada and New Jersey. [Id., pp. 4 ¶ 13, 11 ¶ 5] Lilly therefore
removed the case to the United States District Court for the Central District of California on the
basis of diversity jurisdiction. [Id., p. 1]
The case was transferred to this Court as part of the Darvon/Darvocet multidistrict
litigation (MDL) in February 2012. On April 11, 2012, the plaintiffs sought leave to amend the
complaint to omit all claims against Watson, make additional claims against Lilly, and add two
new parties (originally identified as John Doe defendants): Southwood Pharmaceuticals, Inc.
(“Southwood”) and California Pharmacy Management, LLC, n/k/a Industrial Pharmacy
Management LLC (“California Pharmacy”).2 [Record No. 37] The Court granted their motion.
[Record No. 45] The Amended Complaint asserted the following claims against all three
defendants: wrongful death, survival, design defect, breach of express warranty, breach of
implied warranty, negligence, intentional misrepresentation, negligent misrepresentation,
intentional concealment, and negligent failure to warn.3 [Record No. 48, pp. 7-40] As set forth
in the Amended Complaint, California Pharmacy is a California citizen and was “one of the
sellers and distributors of the propoxyphene-containing products ingested by the Decedent
shortly before her death.” [Id., p. 4 ¶ 9; see id. ¶ 8] Citing exhibits attached to the Amended
The plaintiffs voluntarily dismissed, with prejudice, all of their claims against Watson.
[Record No. 41]
The Amended Complaint also included claims of failure to warn and negligence against
Lilly only. [Record No. 48, pp. 13-15, 38-40]
Complaint, the plaintiffs further allege that California Pharmacy “sold and/or distributed the lastdocumented propoxyphene-containing products to Decedent two days before her death.” [Id.,
p. 6 ¶ 16]
With respect to Southwood, the Amended Complaint contains more detailed allegations.
The plaintiffs assert that Southwood, also a California citizen, “was in the business of
manufacturing, marketing, innovating, developing, creating, designing, testing, labeling,
packaging, promoting, distributing and/or selling generic propoxyphene-containing products.”
[Id., p. 3 ¶ 5; see id., p. 4 ¶ 7] They further allege that Southwood held the “approved ANDAs
[Abbreviated New Drug Applications] for prescription pain medications containing
propoxyphene that were generic formulations of Darvon/Darvocet” [id., pp. 3-4 ¶ 6] and that the
company is “[t]he product manufacturer associated with” the National Drug Code number on the
last propoxyphene product purchased by their mother. [Id., p. 6 ¶ 16; see id. ¶ 15]
A week after filing the Amended Complaint, the plaintiffs moved for remand, arguing
that the addition of Southwood and California Pharmacy destroyed diversity and thus divested
the Court of subject matter jurisdiction over this action. [MDL Record No. 1806, p. 4] In
response, Lilly maintains that diversity jurisdiction still exists because Southwood and California
Pharmacy were fraudulently joined. [MDL Record No. 1892]
The Court has previously addressed the doctrine of fraudulent joinder in this MDL. See
Freitas v. McKesson Corp., No. 2: 12-50-DCR, 2012 U.S. Dist. LEXIS 91256, at *9-18 (E.D.
Ky. July 2, 2012). As explained in Freitas, a non-diverse defendant is fraudulently joined, and
its presence does not defeat diversity jurisdiction, “if there is no ‘reasonable basis’ to expect that
the plaintiff’s claims against the non-diverse defendant could succeed under state law.”4 Id. at
*10-11 (quoting Coyne ex rel. Ohio v. Am. Tobacco Co., 183 F.3d 488, 493 (6th Cir. 1999)).
The doctrine operates as an exception to the requirement of complete diversity in cases removed
from state court. Id. at *10.
It does not apply, however, when non-diverse defendants are properly joined after the
case has been removed. Pursuant to 28 U.S.C. § 1447(e), “[i]f after removal the plaintiff seeks
to join additional defendants whose joinder would destroy subject matter jurisdiction, the court
may deny joinder, or permit joinder and remand the action to the State court.” Several circuits
have concluded that this statute means that an after-the-fact challenge to post-removal joinder
of non-diverse defendants is too late. The Fifth Circuit reasoned:
[W]hen a non-diverse defendant is named in an original state court action to
prevent removal, the diverse defendant has no opportunity to contest joinder
before it occurs and must rely upon the fraudulent joinder doctrine. In contrast,
a diverse defendant can argue that a post-removal joinder is improper before the
court grants the plaintiff leave to amend. Thus, once a court permits post-removal
joinder of a non-diverse defendant, the fraudulent joinder doctrine is not thereafter
available, “[t]he court [loses] subject matter jurisdiction,” and remand is required
pursuant to 28 U.S.C. § 1447(e).
Borden v. Allstate Ins. Co., 589 F.3d 168, 171 (5th Cir. 2009) (alterations in original) (citations
omitted) (quoting Cobb v. Delta Exports, Inc., 186 F.3d 675, 677-78 (5th Cir. 1999)). Likewise,
the Fourth Circuit observed that a court faced with the proposed joinder of a jurisdictional spoiler
following removal has just two options under § 1447(e): deny joinder, or permit it and then
Due to a typographical error, the Freitas opinion incorrectly stated that a case “should be
remanded” if fraudulent joinder is found. See 2012 U.S. Dist. LEXIS 91256 at *10.
remand. Mayes v. Rapoport, 198 F.3d 457, 461-62 (4th Cir. 1999). Courts may, however,
consider fraudulent joinder when deciding whether to allow non-diverse defendants to be joined.
Id. at 462-63; see also Schur v. L.A. Weight Loss Ctrs., Inc., 577 F.3d 752, 764 (7th Cir. 2009)
(“[A]lthough the fraudulent joinder doctrine is not directly applicable to the post-removal
context, it can be a relevant factor for determining whether to permit joinder under § 1447(e).”).
In other words, if Lilly believed that the plaintiffs were joining Southwood and California
Pharmacy solely to deprive the Court of diversity jurisdiction, it should have voiced that
objection when they moved for leave to amend.5 Since it did not, § 1447 leaves the Court no
choice but to remand. See Curry v. U.S. Bulk Transp., Inc., 462 F.3d 536, 541 (6th Cir. 2006)
(“Upon the order granting [the plaintiff]’s motion to amend his complaint to identify . . . and
add . . . nondiverse defendants, complete diversity was destroyed, and so remand to state court
was required at that time.”).
Lilly would not have prevailed on its fraudulent-joinder argument in any event. Lilly’s
primary contention is that the claims against Southwood and California Pharmacy cannot
succeed because they are preempted under PLIVA, Inc. v. Mensing, 131 S. Ct. 2567 (2011). [See
MDL Record No. 1892, pp. 4-8] As discussed in Freitas, however, the issue of preemption goes
to the merits of the plaintiffs’ case and may not be considered for purposes of the fraudulentjoinder analysis, which is merely a “‘threshold jurisdictional’” inquiry. 2012 U.S. Dist. LEXIS
91256 at *12 (quoting Boyer v. Snap-On Tools Corp., 913 F.2d 108, 112 (3d Cir. 1990)); see id.
In light of the procedure adopted by the Court to allow amendment of complaints, Lilly’s
actions are completely understandable. However, because the John Doe defendants were originally
identified by the plaintiffs’ original complaint, objection to the joinder of the two defendants that
now defeat diversity would not have been successful even if Lilly had objected to the amendment.
at *13-17. Lilly’s remaining contention — that as a pharmacy, California Pharmacy is shielded
from liability under California law — need not be considered since it would still leave one nondiverse defendant (Southwood) in this case.
Because the parties to this action are no longer completely diverse, the Court lacks
subject matter jurisdiction. Accordingly, it is hereby
ORDERED as follows:
The plaintiffs’ Motion to Remand [MDL Record No. 1806] is GRANTED.
The Motions to Dismiss of California Management, LLC [MDL Record No. 1917]
and Southwood Pharmaceuticals, Inc. [MDL Record No. 1954] are DENIED, without prejudice,
This action is REMANDED to the Superior Court of California, Los Angeles
County, and STRICKEN from this Court’s docket.
This 16th day of July, 2012.
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