Jones et al v. Abbott Laboratories et al

Filing 25

MEMORANDUM OPINION AND ORDER : Plaintiff's motion to remand is GRANTED. Plaintiff's request for attorney's fees and costs is DENIED. IT IS FURTHER ORDERED that Plaintiff's motion for leave to respond to Defendants' surreply 23 is DENIED AS MOOT. Signed by Chief Judge Joseph H. McKinley, Jr on 1/5/12. cc:counsel, Jefferson Circuit Court (JBM)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
LOUISVILLE DIVISION
CIVIL ACTION NO. 3:11CV-00431-JHM
RODNEY JONES and AMBER JONES,
Individually and as next friends and parents
of minor children RDJ and JLAJ

PLAINTIFFS

v.
ABBOTT LABORATORIES, et al.

DEFENDANTS

MEMORANDUM OPINION AND ORDER
This matter is before the Court on Plaintiffs’ motion to remand pursuant to 28 U.S.C. §
1447(c) [DN 11] and Plaintiffs’ motion for leave to respond to Defendants’ surreply [DN 23]. Fully
briefed, the matter is ripe for decision.
I. BACKGROUND
On July 5, 2011, Plaintiffs filed a complaint this action in the Jefferson Circuit Court.
Plaintiffs allege that they purchased Similac Brand Powder Infant Formula manufactured and
distributed by Defendant Abbott Laboratories and sold by Defendant Kroger which contained a
small common beetle or beetle larvae. Plaintiffs assert claims against all Defendants for negligence.
Plaintiffs assert claims for violations of the Kentucky Consumer Protection Act, violations of the
Kentucky Food, Drug and Cosmetic Act, and breach of implied warranties of merchantability and
fitness for a particular purpose against only Abbott and Kroger. Plaintiffs also assert claims for
strict liability and common-law battery against Abbott. On August 3, 2011, Defendants removed this
action from the Jefferson Circuit Court to this Court on the theory that Plaintiffs had fraudulently
joined Defendant Candice Blackburn, the manager of the store, in an effort to defeat federal
jurisdiction. Plaintiffs now ask the Court to remand and award them attorney’s fees and costs.

II. STANDARD
At issue in this motion is whether Defendant Candice Blackburn was fraudulently joined.
“‘Fraudulent joinder occurs when the non-removing party joins a party against whom there is no
colorable cause of action.’” Walker v. Philip Morris USA, Inc., 2011 WL 5119441, *4 (6th Cir. Oct.
31, 2011)(quoting Saginaw Hous. Comm’n v. Bannum, Inc., 576 F.3d 620, 624 (6th Cir. 2009)).
“The non-moving party’s motive for joining the non-diverse party to the lawsuit is ‘immaterial to
our determination regarding fraudulent joinder.’” Id. (quoting Jerome–Duncan, Inc. v. Auto-By-Tel,
L.L.C., 176 F.3d 904, 907 (6th Cir. 1999)). The burden is on the Defendants to show fraudulent
joinder, and as with any dispute over removal all doubts are resolved in favor of remand. Brierly
v. Alusuisse Flexible Packaging, Inc., 184 F.3d 527, 534 (6th Cir.1999); Alexander v. Elec. Data
Sys. Corp., 13 F.3d 940, 949 (6th Cir.1994).
“To prove fraudulent joinder, the removing party must present sufficient evidence that a
plaintiff could not have established a cause of action against non-diverse defendants under state
law.” Coyne v. Am. Tobacco Co., 183 F.3d 488, 493 (6th Cir.1999). “Therefore the question is
whether there is arguably a reasonable basis for predicting that the state law might impose liability
on the facts involved.” Probus v. Charter Communications, LLC, 234 Fed. Appx. 404, 407 (6th Cir.
2007). See also Walker v. Phillip Morris, USA, Inc., 2011 WL 5119411, *4 (6th Cir. Oct. 31, 2011).
In making this determination, the Sixth Circuit recognizes that the district court may “pierce
the pleadings and conduct a summary inquiry” to determine whether the a plaintiff’s complaint has
misstated or omitted “discrete and undisputed facts” that would determine the propriety of joinder.
Walker, 2011 WL 5119411, *6.
However, this standard of review is not as broad as suggested by Defendants. In adopting
the approach articulated by the Fifth Circuit, the Sixth Circuit in Walker stated in relevant part:

[A]lthough the fraudulent joinder and Rule 12(b)(6) standards appear similar, the
scope of the inquiry is different. For Rule 12(b)(6) motions, a district court may only
consider the allegations in the complaint and any attachments. For fraudulent
joinder, the district court may . . . “pierce the pleadings” and consider summary
judgment-type evidence in the record, but must also take into account all
unchallenged factual allegations, including those alleged in the complaint, in the
light most favorable to the plaintiff. Any contested issues of fact and any ambiguities
of state law must be resolved in [the plaintiff’s] favor. The burden of persuasion on
those who claim fraudulent joinder is a heavy one.
Id. (quoting Travis v. Irby, 326 F.3d 644, 648–49)). Therefore, “even if the district court ‘pierces
the pleadings’ to consider summary-judgment-type evidence (such as depositions, affidavits, etc.),
the proper standard for evaluating that evidence remains akin to that of a Rule 12(b)(6) motion to
dismiss, and is arguably even more deferential.” Id. at *7. Additionally, “any contested issues of
fact must be construed in the plaintiff’s favor.” Id.
III. DISCUSSION
Plaintiffs argue that the instant case should be remanded with costs and fees because
Defendants have failed to prove the fraudulent joinder of Candice Blackburn, the non-diverse
forum-defendant. Defendants, on the other hand, contend that removal was proper because
Blackburn was fraudulently joined, i.e., they claim that there is absolutely no reasonable basis for
predicting that liability might be imposed against Blackburn on Plaintiff’s claims of negligence
because of Kentucky’s Middleman Statute and because Plaintiff was not involved in the sale of the
product at all.
KRS § 411.340 provides:
In any product liability action, if the manufacturer is identified and subject to the
jurisdiction of the court, a wholesaler, distributor, or retailer who distributes or sells
a product, upon his showing by a preponderance of the evidence that said product
was sold by him in its original manufactured condition or package, or in the same
condition such product was in when received by said wholesaler, distributor or
retailer, shall not be liable to the plaintiff for damages arising solely from the
distribution or sale of such product, unless such wholesaler distributor or retailer,
breached an express warranty or knew or should have known at the time of

distribution or sale of such product that the product was in a defective condition,
unreasonably dangerous to the user or consumer.
KRS § 411.340.
This statute is intended to shield retailers from both liability and lawsuits. Weixler v. Paris
Co., 2003 WL 105503, *1 (W.D. Ky. Jan. 2, 2003). The rationale underlying the statute is that
“‘retailers are unaware of design and manufacturing considerations and it is therefore unfair to hold
them responsible for the mere sale of a defective product where the manufacturer is also before the
Court.’” Mason v. Excel Industries, Inc., 2011 WL 847449, *2 (W.D. Ky. Mar. 9, 2011)(quoting
Weixler, 2003 WL 105503, *1). As noted above, “the statute makes clear that its protective shield
is inapplicable in two instances: (1) where the wholesaler, distributor or retailer breached an express
warranty, or (2) where the wholesaler, distributor or retailer knew or should have known at the time
of distribution or sale that the product was in a defective condition and unreasonably dangerous.”
Salisbury v. Purdue Pharma, L.P., 166 F. Supp. 2d 546, 551 (E.D. Ky. 2001).
In the present case, Abbott, the manufacturer of Similac products is a party to this case and
is subject to the jurisdiction of the Court; Blackburn is the manager of the retailer; and Similac
products were sold to Plaintiffs in their original condition. Furthermore, Plaintiffs do not allege that
Blackburn made or breached any express warranty regarding the product. Therefore, in order to
defeat the application of the Kentucky Middleman Statute, the Plaintiffs are required to prove that
Blackburn knew or should have known at the time of distribution or sale of the Similac products that
the product was in a defective condition, unreasonably dangerous to the user or consumer. KRS §
411.340.
Defendants argue that Plaintiffs fail to meet this standard. However, the appropriate inquiry
in this case is not whether Plaintiffs will ultimately lose on the merits; rather, it is simply whether
Plaintiffs have “at least a colorable cause of action against [Blackburn] in the [Kentucky] state

courts.” Probus, 234 Fed. Appx. at 408 (6th Cir. 2007)(quoting Jerome-Duncan, 176 F.3d at 907.).
See also Sprowls v. Oakwood Mobile Homes, Inc., 119 F. Supp. 2d 694, 697 (W.D. Ky. 2000).
Here, Plaintiffs allege that Abbott Laboratories manufactured Similac-brand infant formula
that was defective; that Abbott recalled that product line; that after the recall, Plaintiffs purchased
the allegedly defective product at a store owned and operated by Kroger; that Candice Blackburn,
the manager of the store, participated in the sale of the product by overriding a cash register block
on the product; that at no time during the purchase of the product was there any indication that any
form of Similac was the subject of the recall, either through signs or statement of Blackburn; that
Plaintiff, Amber Jones, specifically asked Blackburn about the lack of Similac on the shelves at
Kroger; that Blackburn never advised her about the recall of some Similac products; that the
Defendants (including Blackburn) “knew or should have known that use of Similac Brand Powder
Infant Formula could cause serious medical issues and effects on its targeted consumers – very
young children;” and that Plaintiffs suffered damages as a result of purchasing and/or consuming
that product. Essentially, Plaintiffs claim that Blackburn was negligent in failing to remove products
that she knew to be unsafe from the shelves, not communicating the dangers of the product to
Plaintiffs, and also participating in the sale of the product by overriding the merchandise block on
the products in question. These allegations state, at a minimum, a negligence claim against
Blackburn.
Even considering the additional evidence submitted by the parties, the Court concludes that
Plaintiffs’ allegations state a colorable cause of action in negligence against Blackburn and provide
a reasonable basis to predict that a Kentucky court might impose liability on Blackburn. See, e.g.,
Mitchell v. Dow Chemical Co., 2011 WL 2938156, *1-2 (E.D. Ky. July 19, 2011); Hutchen v. WalMart Stores East I,LP, 555 F. Supp. 2d 1013, 1019 (E.D. Mo. 2008). In fact, the additional evidence

submitted by Defendants does not reveal misstated or omitted discrete and undisputed facts that
would determine the propriety of joinder. Instead, when viewed in a light most favorable to the
Plaintiffs and given the current stage of this litigation, the evidence demonstrates that there are
currently genuine issues of material fact with respect to the type of Similac products purchased from
Kroger by Plaintiffs, whether those products were defective, the Similac products and sizes subject
to the recall, the retailer and the manager’s knowledge of the recall, their duty to notify customers
of the recall of certain Similac products, and the manager’s role in overriding the transaction
permitting Plaintiffs to purchase the products in question.
Resolving all contested issues of fact and ambiguities of state law in Plaintiff’s favor, the
Court finds that Defendants have not established that Blackburn was fraudulently joined and
therefore, complete diversity is lacking and remand is proper.
V. CONCLUSION
For the foregoing reasons, IT IS HEREBY ORDERED that Plaintiffs' motion to remand
is GRANTED. Plaintiffs’ request for attorney’s fees and costs is DENIED. IT IS FURTHER
ORDERED that Plaintiffs’ motion for leave to respond to Defendants’ surreply [DN 23] is
DENIED AS MOOT.

cc: counsel of record
Jefferson Circuit Court

January 5, 2012