Feldman et al v. Rite Aid Hdqtrs Corp. et al

Filing 12

ORDER granting 5 Motion to Remand; finding as moot 3 Motion to Dismiss. A separate order of remand transferring the above styled and numbered case to the Chancery Court of Adams County shall issue this day. Signed by Honorable David C. Bramlette, III on 4/26/2017 (EB)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
WESTERN DIVISION
ARNOLD E. FELDMAN, M.D., SOUTHWEST
MISSISSIPPI ANESTHESIA, P.A., and
SOUTHWEST MISSISSIPPI ANESTHESIA, P.A.
d/b/a THE FELDMAN INSTITUTE
V.

PLAINTIFFS

CIVIL ACTION NO. 5:17-cv-00009-DCB-MTP

RITE AID HDQTRS CORP. D/B/A RITE AID
PHARMACY; WALGREENS PHARMACY; MISSISSIPPI
CVS PHARMACY, LLC D/B/A CVS PHARMACY;
FRED’S OF NATCHEZ, INC. D/B/A FRED’S
PHARMACY

DEFENDANTS

ORDER AND OPINION
This cause is before the Court on plaintiffs

Arnold E.

Feldman, M.D. (“Dr. Feldman”), Southwest Mississippi Anesthesia,
P.A., and Southwest Mississippi Anesthesia, P.A., Inc. d/b/a The
Feldman Institute (collectively “Plaintiffs”)’s Motion to Remand
(docket entry 5).

Having considered the motion and responses,

applicable statutory and case law, and being otherwise fully
informed in the premises, the Court finds as follows:
I. Facts & Procedural History
Plaintiff

Arnold

Feldman,

M.D.,

is

a

board-certified

anesthesiologist with chronic pain management practices located in
both Louisiana and Mississippi. Doc. 1-1, ¶ 9.

Dr. Feldman’s

practice groups include The Feldman Institute and First Choice
Surgery

Center,

LLC

in

Louisiana

and

Southwest

Mississippi

Anesthesia Associates located in Natchez, Mississippi. Id.

1

As of

October 14, 2016, the Louisiana State Board of Medical Examiners
suspended Dr. Feldman’s Louisiana medical license for two years.
Id. at ¶ 14.
decision

to

Following his suspension, Dr. Feldman “made the
continue

to

expand

his

practice

in

Natchez,

Mississippi, given that he still maintains a valid Mississippi
medical license and a valid DEA prescribing license.” Id.
On December 9, 2015, the plaintiffs filed a Complaint in the
Chancery Court of Adams County, Mississippi, alleging that the
defendant pharmacies have refused to honor, and placed undue
restrictions on, Dr. Feldman’s prescriptions despite the fact that
his Mississippi medical license and DEA prescribing license remain
effective. See Doc. 1-1.

The plaintiffs seek an injunction to

prevent the defendant pharmacies from engaging in this practice,
and

a

declaratory

judgment

granting

the

plaintiffs

“specific

performance of their agreements with Defendants” regarding Dr.
Feldman’s prescriptions. Id.
On January 19, 2017, defendant Walgreens Co. (“Walgreens”)
filed a Notice of Removal on the basis of diversity jurisdiction,
claiming that plaintiffs’ claims against the defendant pharmacies
have been fraudulently misjoined.1

Shortly thereafter on February

1, 2017, Plaintiffs filed their Motion to Remand for lack of
subject matter jurisdiction, citing a lack of diversity between

Walgreens also filed a Motion to Dismiss (docket entry 3) shortly after
removal, to which the plaintiffs have provided no response.
1

2

the parties and an amount in controversy below the jurisdictional
minimum.
II. Discussion
Defendant Walgreens, as the removing party, bears the burden
of proving that federal jurisdiction exists and that removal was
proper. Barker v. Hercules Offshore, Inc., 713 F.3d 208, 212 (5th
Cir. 2013).

When considering motions to remand, the removal

statutes are to be strictly construed against removal, and all
ambiguities or doubts are resolved in favor of remand. Wilkinson
v. Jackson, 294 F. Supp. 2d 873, 877 (S.D. Miss. 2003) (citing
Willy v. Coastal Corp., 855 F.2d 1160 (5th Cir. 1988)).
The removal of cases from state to federal court is governed
by 28 U.S.C. § 1441, which provides that “any civil action brought
in a State court of which the district courts of the United States
have original jurisdiction may be removed . . . to the district
court of the United States for the district and division embracing
the place where such action is pending.” 28 U.S.C. § 1441(a).
Federal courts have original diversity jurisdiction over civil
actions between citizens of different states where the amount in
controversy exceeds $75,000, exclusive interest and costs. 28
U.S.C. § 1332(a).

In moving to remand, the plaintiffs contend

that neither of the jurisdictional requirements set forth in 28
U.S.C. § 1332(a) has been met.

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A. Diversity of Citizenship
For the Court to exercise diversity jurisdiction under 28
U.S.C. § 1332(a), complete diversity of citizenship must exist
between the parties. Complete diversity “requires that all persons
on one side of the controversy be citizens of different states
than all persons on the other side.” Vaillancourt v. PNC Bank,
Nat. Ass’n, 771 F.3d 843, 847 (5th Cir. 2014).

It is undisputed

that complete diversity between the parties is lacking, as multiple
plaintiffs

and

Mississippi.2

defendants

are

alleged

to

be

citizens

of

Defendant Walgreens, which is a foreign corporation

with its principal place of business in Illinois, urges the Court
to exercise diversity jurisdiction over the claims stated against
it based on a theory of fraudulent misjoinder.

In its Notice of

Removal and Response to the plaintiffs’ motion, Walgreens asks the
Court to sever and remand Plaintiffs’ claims against the nondiverse defendants while retaining jurisdiction over Plaintiffs’
claims against Walgreens.3

Should the Court choose to sever the

Based on the allegations set forth in the Complaint, Southwest
Mississippi Anesthesia, P.A. and Southwest Mississippi Anesthesia, P.A., Inc.
d/b/a The Feldman Institute (“The Feldman Institute”) appear to be Mississippi
residents for diversity purposes.
Defendants Mississippi CVS Pharmacy, LLC
(“CVS”) and Fred’s of Natchez, Inc. (“Fred’s”) are also alleged to be
Mississippi corporations.
3 The Court acknowledges that defendant Rite Aid HDQTRS Corp. d/b/a Rite
Aid Pharmacy (“Rite Aid”) appears to be a diverse defendant.
Rite Aid is
alleged to be a foreign corporation with its principle place of business in
Pennsylvania. Nonetheless, Rite Aid has not joined in the Notice of Removal,
nor has Walgreens presented any argument in favor of retaining jurisdiction
over the claims asserted against Rite Aid.
2

4

plaintiffs’

claims,

complete

diversity

would

exist

between

Walgreens and the plaintiffs.
The doctrine of fraudulent misjoinder was first adopted by
the Eleventh Circuit in Tapscott v. MS Dealer Serv. Corp., 77 F.3d
1353, 1360 (11th Cir. 1996), abrogated on other grounds, Cohen v.
Office Depot, Inc., 204 F.3d 1069 (11th Cir. 2000), and later
acknowledged by the Fifth Circuit in In re Benjamin Moore & Co.,
318 F.3d 626, 630-631 (5th Cir. 2002) (“fraudulent misjoinder of
plaintiffs is no more permissible than fraudulent misjoinder of
defendants to circumvent diversity jurisdiction”).

Apart from

mentioning the general principle, the Fifth Circuit has provided
scarce guidance as to how the fraudulent misjoinder doctrine should
be applied in our courts.

Nevertheless, “most district courts

within this circuit have taken the position that the Fifth Circuit
has adopted, or at least appears to have adopted, Tapscott.”
Palermo v. Letourneau Tech., Inc., 542 F. Supp. 2d 499, 515 (S.D.
Miss. 2008) (collecting cases).

When considering the standard by

which fraudulent misjoinder should be judged, this Court has
...adopt[ed] the fraudlent joinder-like standard for
purposes of deciding the fraudulent misjoinder issue...
Removal and severance will be allowed only if claims
were improperly joined under state law at the action's
inception. The standard also protects both the right of
a plaintiff to choose his own forum and the right of a
defendant to remove to a federal forum when faced with
misjoinder in the state court. As long as there is a
reasonable possibility that the state court would find
joinder proper, the plaintiff's right to a state forum
prevails, but if there is no reasonable possibility that
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the state court would find joinder proper, the defendant
is entitled to removal and severance. Under this
standard, the lack of a reasonable possibility that the
state court would allow the joinder renders the claims
or parties “fraudulently misjoined.”
Id. at 523-24.

Applying the “fraudulent joinder-like” approach

previously adopted by this Court and others within the Northern
and Southern Districts, the Court considers whether, based on the
unique circumstances at issue, there is a reasonable possibility
that a Mississippi court would find that Plaintiffs’ claims against
Rite Aid, CVS, and Fred’s pharmacies were properly joined with
their claims against Walgreens. See id. at 542 F. Supp. 2d at 52324; Hampton v. Frost, 2015 WL 11233043, *1 (S.D. Miss. Sept. 24,
2015); see also Sweeney v. Sherwin Williams Co., 304 F. Supp. 2d
868, 872 (S.D. Miss. 2004) (“mere misjoinder is insufficient to
raise to the level of fraudulent misjoinder . . . misjoinder must
represent totally unsupported, or ‘egregious’ misjoinder”); Walton
v. Tower Loan of Miss., 338 F. Supp. 2d 691, 697 (N.D. Miss. 2004)
(noting that fraudulent misjoinder is most appropriate in “cases
where it seems clear that the parties were misjoined specifically
to defeat diversity jurisdiction as opposed to cases where such an
inference is less clear”).4

Courts within this circuit have generally found fraudulent misjoinder
in three scenarios: “(1) two or more lawsuits with little or no party overlap
have been combined in the same action . . . (2) numerous plaintiffs have sued
a common defendant and assert claims that have no shared factual element other
than the presence of the common defendant; and (3) a single plaintiff or group
of plaintiffs has joined multiple defendants in the same action and is asserting
claims against each defendant that are both factually and legally unrelated.”
Super Truck Stop 35-55, LLC v. Nissi Insurance Solutions, LLC, 2016 WL 5477725,
4

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Following much discussion among the district courts, the
clear consensus is that Mississippi Rule of Civil Procedure 20,
rather than its federal counterpart, should guide the fraudulent
misjoinder analysis. See Palermo, 542 F. Supp. 2d at 517; Sweeney,
304 F. Supp. 2d at 875; White v. Emerson, 2017 WL 1095063, *1 (S.D.
Miss. Mar. 23, 2017).

The Court’s inquiry under Rule 20 is two-

pronged, examining whether (1) the right to relief arises out of
the same transaction, occurrence, or series of transactions or
occurrences, and (2) a question of law or fact common to all
defendants will arise in the action.
White, 2017 WL 1095063 at *1.

See Miss. R. Civ. P. 20(a);

Both prongs of the analysis must be

satisfied for joinder to be proper. Nsight Technologies, LLC v.
Fed. Ins. Co., 2009 WL 1106868, *3 (S.D. Miss. April 23, 2009).
The Mississippi Supreme Court requires finding a “distinct and
litigable event linking the parties” in order to satisfy the Rule.
Hegwood v. Williamson, 949 So.2d 728, 730 (Miss. 2007).

To

determine whether a distinct and litigable event is present,
Mississippi courts consider
... whether a finding of liability for one plaintiff
essentially establishes a finding for all plaintiffs,
indicating that proof common to all plaintiffs is
significant. The appropriateness of joinder decreases as
the need for additional proof increases. If plaintiffs
allege a single, primary wrongful act, the proof will be
common to all plaintiffs; however, separate proof will
be required where there are several wrongful acts by
several different actors. The need for separate proof is
*7 (N.D. Miss. Sept. 29, 2016) (quoting Tex. Instruments Inc. v. Citigroup
Global Markets, Inc., 266 F.R.D. 143, 149 (N.D. Tex. 2010)).

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lessened only where the different wrongful acts are
similar in type and character and occur close in time
and/or place.
Id. at 730-31 (quoting Ill. Cent. R.R. v. Gregory, 912 So.2d 829,
834-35 (Miss. 2005).

“[I]t is also important to consider whether

the proof presented to the jury would be confusing due to the
multiplicity of facts.” Hegwood, 949 So.2d at 731.
The plaintiffs maintain that both prongs of Rule 20 are
satisfied in the case sub judice, as all claims are premised on
the same equitable theories of relief and arise from a common nexus
of fact.

Yet, Walgreens responds that Plaintiffs’ claims cannot

pass muster under the rule because there is no distinct and
litigable event linking the parties.

According to Walgreens, each

defendant is a separate corporate entity acting independently of
the others, and any decision to fill prescriptions is based on
each pharmacy’s unique policies, which are examined on a case by
case basis.
refusal

to

Thus, Walgreens claims that each defendant’s alleged
fill

Dr.

Feldman’s

prescriptions

must

necessarily

constitute a separate, distinct event.
Applying Rule 20 to the facts of this case, the Court declines
to adopt Walgreens’ fraudulent misjoinder theory.

Plaintiffs have

collectively asserted claims for equitable relief against the
defendant

pharmacies

for

refusing

to

honor

Dr.

Feldman’s

prescriptions in Adams County after his Louisiana medical license
was

suspended.

The

Complaint

does
8

not

distinguish

among

the

defendants, but rather alleges that all of the defendants have
engaged in misconduct which has purportedly contributed to some
common

injury

or

deprivation

of

Plaintiffs’

rights.

The

defendants’ conduct allegedly occurred within the same county,
during the same time period, and involved similar, if not the same,
prescriptions written by Dr. Feldman to his non-resident patients.
While the Court recognizes that each pharmacy functions as a
separate entity

exercising independent business judgment,

the

Court is unwilling to find that the claims against the defendants
are so unrelated as to justify severance in this case.

The

plaintiffs’ claims against the defendant pharmacies are factually
related insofar as they involve prescriptions written by a single
doctor, for a single class of patients, in a single geographic
region, beginning after disciplinary action was taken against Dr.
Feldman in Louisiana.
injunctive

relief

Moreover, the claims for declaratory and

present

questions

of

law

common

to

all

defendants, which will likely require similar and overlapping
proof.

The Court finds that there is a strong probability that a

Mississippi court would consider Plaintiffs’ claims against the
defendants to be properly joined under Rule 20.

Thus, the Court

concludes that Plaintiffs have met the “reasonable possibility”
standard, and Walgreens’ fraudulent misjoinder argument must fail,
as does the defendant’s diversity-based removal under 28 U.S.C. §
1332.
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B. Amount in Controversy
Having found that Walgreens has failed to establish diversity
of citizenship, the Court need not reach the amount in controversy
issue. The Court is without subject matter jurisdiction and shall
therefore grant the plaintiffs’ motion to remand the action to the
Chancery Court of Adams County. Plaintiffs’ request for attorneys’
fees and costs associated with the motion under 28 U.S.C. § 1447(c)
shall be denied, as Walgreens

had

at least some

objectively

reasonable basis for removal.
Accordingly,
IT IS HEREBY ORDERED AND ADJUDGED that the plaintiffs’ Motion
to Remand (docket entry 5) is GRANTED;
IT IS FURTHER ORDERED that defendant Walgreens’ Motion to
Dismiss (docket entry 3) is MOOT.
A separate order of remand transferring the above styled and
numbered cause to the Chancery Court of Adams County shall issue
this day.
SO ORDERED AND ADJUDGED, this the 26th day of April, 2017.

/s/ David Bramlette_________
UNITED STATES DISTRICT JUDGE

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