Orrick et al v. Smithkline Beecham Corporation

Filing 72

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that plaintiffs' motion to remand (ECF #31) is GRANTED. IT IS FURTHER ORDERED that defendants' motion for leave to file an amended notice of removal (ECF #16), motion for jurisdictional discovery ( ECF #55), and motion to sever and transfer (ECF #44) are DENIED as moot. IT IS FINALLY ORDERED that the Clerk of the Court shall remand this action to the Circuit Court of the City of St. Louis, Missouri, from which it was removed. Signed by District Judge Stephen N. Limbaugh, Jr on 8/13/2014. (Memorandum and Order forwarded to the Circuit Court of the City of St. Louis)(JMC)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
RHONDA ELIZABETH ORRICK,
as Next Friend of D.E., a minor, et al.,
Plaintiffs,
v.
SMITHKLINE BEECHAM
CORPORATION, d/b/a
GLAXOSMITHKLINE, and
GLAXOSMITHKLINE, LLC,
Defendants.

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Case No. 4:13CV2149 SNLJ

MEMORANDUM AND ORDER
This matter is before the Court on plaintiffs’ motion to remand based on the
presence of a non-diverse plaintiff. The removing defendants oppose remand alleging
plaintiffs fraudulently joined and fraudulently misjoined the non-diverse plaintiff for the
sole purpose of defeating diversity jurisdiction. Also before this Court is defendants’
motion for leave to file an amended notice of removal and motion for jurisdictional
discovery. The motions have been fully briefed, and this matter is ripe for disposition.
For the following reasons, the Court concludes that federal diversity jurisdiction does not
exist, and plaintiffs’ motion to remand must be granted.
I.

Background
Plaintiffs originally filed this cause of action in the Circuit Court of the City of St.

Louis against defendants for claims involving the prescription drug Paxil® (“Paxil”).
Plaintiffs are mothers who filed the action as next friends of their minor children claiming

that their minor children suffered congenital birth defects, disorders, and/or related
illnesses as a result of their own ingestion during pregnancy of Paxil. Plaintiffs allege
that Paxil was researched, developed, tested, manufactured, promoted, marketed, labeled,
and distributed by defendants SmithKline Beecham Corporation d/b/a GlaxoSmithKline,
and GlaxoSmithKline, LLC (“defendants”). Plaintiffs allege that Paxil’s design is
unreasonably dangerous and defective; that defendants knew or should have known that
Paxil use during pregnancy posed an increased risk of congenital birth defects and other
malformations; that defendants failed to adequately warn doctors and the consuming
public of such risks; that defendants failed to properly test, study, and report the adverse
effects of Paxil use during pregnancy on the developing fetus; that defendants marketed
Paxil using false and misleading information with regard to safety and efficacy; and that,
in doing all of the foregoing, defendants acted with evil motive or reckless disregard for
the rights of the plaintiffs and the public. Plaintiffs’ third amended complaint alleges
claims of negligence and negligence per se, negligent pharmaco-vigilance, strict liability
failure to warn, and fraud and seeks actual and punitive damages.
Plaintiffs are citizens of 32 states including Missouri and Delaware. Defendants
are citizens of Delaware. Defendants removed this case to this Court based on diversity
jurisdiction under 28 U.S.C. § 1332. In their notice of removal, defendants allege that the
one plaintiff who is a citizen of Delaware is fraudulently joined and fraudulently
misjoined. Defendants submitted pharmacy records showing the non-diverse plaintiff’s
Paxil prescription was not filled. More than thirty days after they were served,
defendants filed a motion for leave to file an amended notice of removal adding facts and
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argument in support of their fraudulent joinder argument, alleging that the non-diverse
plaintiff’s claim is barred by the applicable statute of limitations.
Plaintiffs filed a motion to remand requesting that this Court remand this matter to
the Circuit Court of the City of St. Louis pursuant to 28 U.S.C. § 1447(c) because the
Court lacks jurisdiction as the non-diverse plaintiff is not fraudulently joined or
fraudulently misjoined. Plaintiffs submitted pharmacy records showing that the nondiverse plaintiff’s Paxil prescription was filled during her pregnancy. The defendants
oppose remand alleging that the non-diverse plaintiff is fraudulently joined as the
allegations in the complaint with regard to her claim fail to state a claim and her claim is
barred by the applicable statute of limitations. Additionally, defendants allege that the
non-diverse plaintiff is fraudulently misjoined because the plaintiffs’ varied claims fail to
satisfy the basic requirements for permissive joinder in that they do not arise out of the
same transaction, occurrence, or series of transactions or occurrences.
II.

Legal Standard – Jurisdiction, Removal, and Remand
The Eighth Circuit has admonished district courts to “be attentive to a satisfaction

of jurisdictional requirements in all cases.” Sanders v. Clemco Industries, 823 F.2d 214,
216 (8th Cir. 1987). “Only state court actions that originally could have been filed in
federal court may be removed to federal court by the defendant.” Caterpillar Inc. v.
Williams, 482 U.S. 386, 392 (1987). 28 U.S.C. § 1332(a) provides that “district courts
shall have original jurisdiction of all civil actions where the matter in controversy . . . is
between citizens of different states.” “Complete diversity of citizenship exists where no
defendant holds citizenship in the same state where any plaintiff holds citizenship.” In re
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Prempro, 591 F.3d at 620 (quoting OnePoint Solutions, LLC v. Borchert, 486 F.3d 342,
346 (8th Cir.2007)). “[I]n a case where there are plural plaintiffs and plural defendants a
federal court does not have diversity jurisdiction unless there is diversity between all
plaintiffs and all defendants.” Iowa Public Service Co. v. Medicine Bow Coal Co., 556
F.2d 400, 403-04 (8th Cir. 1977).
28 U.S.C. § 1441 and § 1446 govern removal of a state court action to federal
court. Pursuant to § 1446(b), “[t]he notice of removal of a civil action or proceeding
shall be filed within 30 days after the receipt by the defendant, through service or
otherwise, of a copy of the initial pleading setting forth the claim for relief upon which
such action or proceeding is based . . . .” A notice of removal may be amended during
the 30 day period during which the removal may be filed. Whitehead v. The Nautilus
Group, Inc., 428 F.Supp.2d 923, 928-29 (W.D. Ark. 2006); Lindsey v. Dillard’s, Inc., 306
F.3d 596, 600 (8th Cir. 2002). However, the notice can only be amended to add specific
facts supporting the originally stated grounds for removal or to clarify the grounds for
removal as stated in the original notice. Id. The amendment cannot add new grounds for
removal once the 30 day period has expired. Id.
“A motion to remand the case on the basis of any defect other than lack of subject
matter jurisdiction must be made within 30 days after the filing of the notice of removal
under section 1446(a).” 28 U.S.C. § 1447(c). The party invoking federal jurisdiction
bears the burden of showing that all prerequisites to jurisdiction are satisfied. Hatridge v.
Aetna Cas. & Sur. Co., 415 F.2d 809, 814 (8th Cir. 1969). “[A]ll doubts about federal

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jurisdiction [are resolved] in favor of remand.” Transit Cas. Co. v. Certain Underwriters
at Lloyd's of London, 119 F.3d 619, 625 (8th Cir. 1997).
III.

Discussion
Plaintiffs move for remand on the grounds that there is not complete diversity

between plaintiffs and defendant. Defendants oppose remand arguing that the plaintiffs
fraudulently joined and fraudulently misjoined the non-diverse plaintiff for the sole
purpose of defeating diversity jurisdiction and her presence should be disregarded in
determining jurisdiction.
A.

Fraudulent Joinder

“Fraudulent joinder occurs when a plaintiff files a frivolous or illegitimate claim
against a non-diverse [party] solely to prevent removal.” In re Prempro Products
Liability Litigation, 591 F.3d 613, 620 (8th Cir. 2010) (citing Filla v. Norfolk S. Ry. Co.,
336 F.3d 806, 809 (8th Cir. 2003)). The removing party alleging fraudulent joinder bears
the burden of proving the alleged fraud. Manning v. Wal-Mart Stores East, Inc., 304
F.Supp.2d 1146, 1148 (E.D. Mo. 2004). To prove fraudulent joinder of a diversitydestroying plaintiff, the defendant seeking removal must prove that the diversitydestroying plaintiff’s claim has “no reasonable basis in fact and law.” Knudson v.
Systems Painters, Inc., 634 F.3d 968, 980 (8th Cir. 2011) (quoting Filla, 336 F.3d at
810). This determination must be made in accordance with the standard set forth in Filla
v. Norfolk Southern Ry. Co. as opposed to the Rule 12(b)(6) dismissal standard.
Knudson, 634 F.3d at 979-80. By requiring proof that the non-diverse party’s claim has
no reasonable basis in law and fact, the court requires more than mere proof that the
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claim should be dismissed pursuant to a Rule 12(b)(6) motion. Id. at 980 (citing Junk,
628 F.3d at 445) (noting that the Rule 12(b)(6) standard is “more demanding” than the
Filla standard)). “In this analysis, we do not focus on the artfulness of the plaintiff's
pleadings.” Id. (citing Wilkinson v. Shackelford, 478 F.3d 957, 964 (8th Cir. 2007)).
Under a fraudulent joinder analysis, the court resolves all facts and ambiguities in
the controlling substantive law in the plaintiffs’ favor and has no responsibility to
definitively settle the ambiguous question of state law. Filla, 336 F.3d at 811. “[T]he
district court’s task is limited to determining whether there is arguably a reasonable basis
for predicting that the state law might impose liability based upon the facts involved.” Id.
“[I]n situations where the sufficiency of the complaint [as to the non-diverse party] is
questionable, ‘the better practice is for the federal court not to decide the doubtful
question in connection with a motion to remand but simply to remand the case and leave
the question for the state courts to decide.’” Id. (quoting Iowa Public Service Co. v.
Medicine Bow Coal Co., 556 F.2d 400, 406 n.6 (8th Cir. 1977).
In the original notice of removal, defendants allege that the non-diverse plaintiff
has no prospect of obtaining a judgment because her pharmacy records show that her
Paxil prescription was not filled. In support of their motion to remand, plaintiffs offer
pharmacy records showing that the non-diverse plaintiff’s prescription for Paxil was
filled during her pregnancy. Defendants concede that these records create an issue of fact
on the question of whether the non-diverse plaintiff ingested Paxil during her pregnancy.
Defendants argue, however, that the pharmacy records do not mean there is a
reasonable basis for the claim and that the complaint “is utterly devoid of the minimum
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facts necessary to state a claim upon which relief can be granted.” Further, defendants
argue that plaintiffs have not “produced facts demonstrating a causal nexus between the
alleged misconduct and the doctor’s decision to prescribe Paxil.” Defendants contend
this omission is fatal to the claim citing to numerous district court cases dismissing
complaints based on the Rule 12(b)(6) dismissal standard. Defendants’ argument and
their reliance upon Rule 12(b)(6) dismissal orders is misplaced. The law is clear that the
Rule 12(b)(6) analysis is not the standard at this juncture. Defendants fail to address the
Filla fraudulent joinder standard, fail to even suggest that the non-diverse plaintiff’s
claim has no reasonable basis in law and fact, and, as a result, fail to satisfy their burden
to establish fraudulent joinder under the applicable standard.
Instead, defendants primarily rely on the argument in their amended notice of
removal that the non-diverse plaintiff is fraudulently joined because the claim is barred
by the statute of limitations. Plaintiffs have opposed the filing of the amended notice of
removal arguing that it is untimely and attempts to assert a new basis for removal. It
appears, however, that plaintiffs are taking a narrow view of the issue. In both the
original notice of removal and the amended notice of removal, the basis for removal is
diversity and defendants allege that the sole non-diverse plaintiff is fraudulently joined
and fraudulently misjoined. This is not a case where removal was originally based on
diversity and then later the removing party attempts to allege jurisdiction based on federal
question. Nor is it a case where the removing defendant alleges jurisdiction based on
federal question and then later attempts to allege jurisdiction based on a different statute
for federal question.
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Assuming defendants are allowed to file their amended notice of removal, the
additional allegations do not establish fraudulent joinder. Defendants make a rather factintensive argument for why the non-diverse plaintiff’s claim fails under the applicable
statute of limitations. Such a defense, however, is not apparent “on the face” of
plaintiffs’ complaint. The argument posited by defendants would require the Court to
delve into the merits of the applicable statute of limitations issue and require the Court to
make factual determinations from disputed facts. This Court will not step from the
threshold jurisdictional issue into a decision on the merits. Filla, 336 F.3d at 811.
Further, this is not necessary as “all doubts . . . should be resolved in favor of remand to
state court.” Prempro, 591 F.3d at 620.
With respect to the statute of limitations arguments, plaintiffs must only show a
“colorable” cause of action to withstand the fraudulent joinder argument, meaning that
they must show that state law might impose liability under the facts alleged. Id. at 810.
Defendants contend that the non-diverse plaintiff had notice of her claim more than two
years before she commenced her lawsuit and, as such, her claim is barred by the
applicable statute of limitations.1 In support of their position, defendants point to various
news and other media reports, the general issuance of “Dear Doctor” letters, a 2005
change in the Paxil labeling, and the date of a medical authorization signed by the nondiverse plaintiff for “possible litigation” in an attempt to show that the non-diverse
plaintiff had notice of her potential claim more than two years before she commenced her

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Defendants maintain that Delaware’s two year statute of limitations for personal injury
actions applies to the non-diverse plaintiff’s claim.
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lawsuit. Plaintiffs contend that even if defendants’ arguments are considered there is a
fact question as to when the non-diverse plaintiff would have been on notice of a
potential claim. Plaintiffs argue defendants have offered at least fifteen potential
triggering dates, one or more of which would be within the statute of limitations.2
Additionally, the complaint alleges that plaintiffs filed this action within the applicable
limitations period of first suspecting that Paxil was the cause of their children’s injuries.
Plaintiffs’ complaint further alleges:
Plaintiffs could not by the exercise of reasonable diligence, have discovered the
wrongful cause of the Paxil-induced injuries at an earlier time because, at the time
of these injuries, the cause was unknown to Plaintiffs. Plaintiffs did not suspect,
nor did Plaintiffs have reason to suspect, the cause of these injuries or the tortious
nature of the conduct causing these injuries until less than the applicable
limitations period prior to the filing of this action. Additionally Plaintiffs were
prevented from discovering this information sooner because [defendants]
misrepresented and continued to misrepresent to the public and the medical
profession that the drug was safe to take during pregnancy, and [defendants] had
fraudulently concealed facts and information that could have led Plaintiffs to
discover a potential cause of action.
This Court finds that the allegations in the complaint, including the allegations
with regard to the applicable limitations period, are sufficient to make a colorable claim
for the non-diverse plaintiff and for this Court to conclude that there is arguably a
reasonable basis for predicting that state law might impose liability. Filla, 336 F.3d at
800. “This conclusion is ‘all that is required to defeat a fraudulent joinder challenge.’”
Junk, 628 F.3d at 447 (quoting Wilkinson, 478 F.3d at 964). Thus, applying the

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Further, there is a contested issue as to the date on which the plaintiffs’ lawsuit would
be considered commenced for purposes of the statute of limitations.
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fraudulent joinder analysis, defendants cannot show that the non-diverse plaintiff lacks a
colorable claim. As a result, complete diversity of citizenship does not exist.
B.

Fraudulent Misjoinder

The “Eighth Circuit has not yet determined whether removal based on diversity of
citizenship can be thwarted where there is fraudulent misjoinder.” Woodside, 2014 WL
169637, at *2 (citing Prempro, 591 F.3d at 620).
Fraudulent misjoinder occurs when a plaintiff sues a diverse defendant in state
court and joins a viable claim involving a nondiverse party, or a resident
defendant, even though the plaintiff has no reasonable procedural basis to join
them in one action because the claims bear no relation to each other. In such cases,
some courts have concluded that diversity is not defeated where the claim that
destroys diversity has “no real connection with the controversy” involving the
claims that would qualify for diversity jurisdiction.
Prempro, 591 F.3d at 620 (quoting Ronald A. Parsons, Jr., Should the Eighth Circuit
Recognize Procedural Misjoinder?, 53 S.D. L.Rev. 52, 57 (2008)). The Prempro Court
declined to adopt or reject the fraudulent misjoinder doctrine because it concluded that
“the plaintiffs’ alleged misjoinder [was] not so egregious as to constitute fraudulent
misjoinder.” Prempro, 591 F.3d at 622. The Prempro case was, like this case, a lawsuit
based on pharmaceutical products liability, and each plaintiff alleged he or she had been
harmed by a type of drug. The plaintiff alleged that the manufacturers had conducted a
national sales and marketing campaign to falsely promote the safety and benefits of the
drugs and understated their risk, so plaintiffs contended that their claims were logically
related because each developed breast cancer as a result of the defendants’ negligence in
designing, manufacturing, testing, advertising, warning, marketing, and selling the drugs.
Id. The Eighth Circuit concluded that plaintiffs’ claims arose from a series of
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transactions involving the drug manufacturers and users, that common questions of law
and fact were likely to arise, and thus there may be a “palpable connection” between the
plaintiffs’ claims. Id. at 623. That was in contrast to the Eleventh Circuit case that first
considered and adopted the fraudulent misjoinder doctrine, in which the plaintiffs were
comprised of two distinct groups with two distinct claims against unrelated defendants.
Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353, 1360 (11th Cir. 1996). There, the
Eleventh Circuit held that the plaintiffs’ joinder of the two groups of unrelated defendants
was “so egregious as to constitute fraudulent joinder.” Id.
Here, plaintiffs are each alleged to have been injured by the same product and
arising from the same development, distribution, marketing, and sales practices for that
product. As a result, common questions of law and fact are likely to arise, and thus there
is at least a “palpable connection.” Defendants argue that plaintiffs have thrown together
any and all plaintiffs with the one plaintiff who can destroy diversity and that this Court
should not permit such tactics. However, as the Eighth Circuit has held, “if the
nondiverse plaintiff is a real party in interest, the fact that his joinder was motivated by a
desire to defeat federal jurisdiction is not material.” Iowa Pub. Serv. Co., 556 F.2d at
404. As in the Prempro case, even if the fraudulent joinder doctrine is applied, it does
not support this Court’s exercise of jurisdiction. As this Court has found in several recent
cases, the joinder of parties alleging injury by the same product and arising from the same
development, distribution, marketing, and sales practices for that product is not
egregious, because common issues of law and fact connect plaintiffs’ claim.” McGee v.
Fresenius Medical Care North America, Inc., 4:14CV967 SNLJ, 2014 WL 2993755, at
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*4 (E.D. Mo. July 3, 2014) (citing Woodside v. Fresenius Medical Care North America,
Inc., 4:13CV2463 CEJ, 2014 WL 169637, at *3 (E.D. Mo. Jan. 15, 2014) (collecting
cases)).
IV.

All Other Pending Motions
There are a number of other pending motions in this case that can be summarily

ruled on in light of the Court’s determination as to plaintiffs’ motion to remand as set
forth and discussed herein. Defendants’ motion for leave to file an amended notice of
removal is denied as moot. Defendants’ requested limited discovery on the statute of
limitations issue for purposes of diversity jurisdiction is denied as moot. Finally, the
Court will deny the request to sever and transfer as moot.
Accordingly,
IT IS HEREBY ORDERED that plaintiffs’ motion to remand (ECF #31) is
GRANTED.
IT IS FURTHER ORDERED that defendants’ motion for leave to file an
amended notice of removal (ECF #16), motion for jurisdictional discovery (ECF #55),
and motion to sever and transfer (ECF #44) are DENIED as moot.
IT IS FINALLY ORDERED that the Clerk of the Court shall remand this action
to the Circuit Court of the City of St. Louis, Missouri, from which it was removed.
Dated 13th this day of August, 2014.

___________________________________
STEPHEN N. LIMBAUGH, JR.
UNITED STATES DISTRICT JUDGE
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