Agnew et al v. Fresenius Medical Care North America, Inc. et al

Filing 29

MEMORANDUM AND ORDER (see order for details) IT IS HEREBY ORDERED that Defendants' motions to stay [Doc. 2 ] and to sever [Doc. 4 ] are DENIED. IT IS FURTHER ORDERED that Plaintiffs' motion to remand [Doc. 18 ] is GRANTED. IT IS FINALLY ORDERED that the Clerk of Court shall remand this case to the Circuit Court for the Twenty-Second Judicial Circuit (St. Louis City) for the State of Missouri for lack of subject matter jurisdiction. See 28 U.S.C. § 1447(c). Signed by Magistrate Judge Thomas C. Mummert, III on 01/09/2014. (CBL)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
JOHN AGNEW, INDIVIDUALLY
AND ON BEHALF OF THE ESTATE
OF JEWEL AGNEW, et al.,
Plaintiffs,
vs.
FRESENIUS MEDICAL CARE
NORTH AMERICA, INC.,1 et al.,
Defendants.

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Case number 4:13cv2468 TCM

MEMORANDUM AND ORDER
This matter is before the Court on Defendants' motions to stay [Doc. 2] and to sever
[Doc. 4], and on Plaintiffs' motion to remand this case to the Circuit Court for the TwentySecond Judicial Circuit, in the City of St. Louis, ("City Circuit Court") for lack of subject
matter jurisdiction ("motion to remand") [Doc. 18].2 After careful consideration, Defendants'
motion to stay will be denied, Plaintiffs' motion to remand will be granted, and Defendants'
motion to sever will be denied.
Background

1

Defendants report that this Defendant is not a separate legal entity, but a trade name
for Defendant Fresenius Medical Care Holdings, Inc., identifying it as Fresenius Medical
Care Holdings, Inc., d/b/a Fresenius Medical Care North America. (See Answer ¶¶ 76, 78
[Doc. 6].) For purposes of this ruling, the Court will not consider Fresenius Medical Care
North America as a separate legal entity or separate Defendant.
2

The case is before the undersigned United States Magistrate Judge by written consent of
the parties. See 28 U.S.C. § 636(c).

The seventy-four Plaintiffs are individuals from twenty-seven states, including one
from Delaware, one from Massachusetts, two from Missouri, and five from New York. (See
Petition ¶¶ 2-75 [Doc. 15].) Plaintiffs seek monetary relief for injuries or deaths they or their
decedents allegedly sustained as the alleged result of the use of Granuflo® dialysis products
designed, manufactured, tested, promoted, and sold by one or more Defendants. (Id. ¶¶ 85,
86.) Defendants are Fresenius USA, Inc. and Fresenius USA Sales, Inc. ("Sales"),3 which
are organized and have their principal places of business in Massachusetts; Fresenius
Medical Care Holdings, Inc.,4 a New York corporation with its principal place of business
in Massachusetts; and Fresenius USA Manufacturing and Fresenius USA Marketing,
Delaware corporations with their principal places of business in Massachusetts. (See id. ¶¶
76-81.)
In their nine-count petition, which was filed in the City Circuit Court, Plaintiffs allege
that Defendants are liable based on theories of breach of express warranty (Count I), breach
of implied warranty (Count II), negligence (Count III), strict liability failure to warn (Count
IV), strict liability defective design or formulation (Count V), strict liability failure
adequately to test (Count VI), strict liability nonconformance with representations (Count
VII), negligent misrepresentation and/or fraud (Count VIII), and "loss of consortium" (Count
IX).5 (Pet. at 65-74.) Plaintiffs seek an award of damages, costs, and interest. (Id.)

3

Defendants state that Sales was dissolved on March 29, 2010. (Answer ¶ 81.)

4

As noted earlier, Defendants identify this Defendant as Fresenius Medical Care
Holdings, Inc. d/b/a Fresenius Medical Care North America. (See Answer ¶¶ 76, 78.)
5

This Count IX, which is reportedly for loss of consortium, is captioned "only if not
death case" but then contains allegations that decedents "suffered serious bodily injuries
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Discussion
Motion to Stay. Defendants move to stay the proceedings in this case pending "its
likely" transfer to a related MDL case, MDL 2428, In re Fresenius Granuflo/Naturalyte
Dialysate Prods. Liab. Litig.
The available record does not contain any indication that this case has been
conditionally transferred to the MDL 2428 proceeding. Even if this case is conditionally
transferred to the MDL 2428 proceeding, that does not, in and of itself, divest this Court of
its power to rule a motion to remand. "The pendency of a . . . conditional transfer order . .
. does not affect or suspend orders and pretrial proceedings in any pending federal district
court action and does not limit the pretrial jurisdiction of that court." J.P.M.L. Rule of
Procedure 2.1(d).
Because the motion to remand raises issues regarding this Court's subject matter
jurisdiction and the JPML Rules do not prohibit this Court from resolving that motion, the
Court will not stay this action. As another judge of this Court recently stated when denying
defendants' motion to stay in another Granuflo® case,
"[a] putative transferor court need not automatically postpone rulings on
pending motions, or in any way generally suspend proceedings [related to an
MDL proceeding]. . . . "This is especially true where, as here, the pending
motion is one for remand and goes to the Court's subject matter jurisdiction."
This Court is in the best position to determine subject matter jurisdiction, and
waiting for a decision by the JPML before ruling on the motion to remand
"would not promote the efficient administration of justice."

resulting in death" and that Defendants are liable for decedents' "wrongful death," and
includes a footnote explaining that this claim applies to four specified decedents. (Pet. ¶¶
266-69.)
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Spears v. Fresenius Medical Care No. Am., Inc., No. 4:13-CV-855 (CEJ), 2013 WL
2643302, at *1 (E.D. Mo. 2013) (citations omitted; first alteration in original). Jurisdiction
is a threshold matter that should be given priority. See Vermont Agency of Natural
Resources v. U. S. ex. rel. Stevens, 529 U.S. 765, 778 (2000) ("Questions of jurisdiction, of
course, should be given priority -- since if there is no jurisdiction there is no authority to sit
in judgment of anything else"); Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 577 (1999)
("The requirement that jurisdiction be established as a threshold matter . . . is inflexible and
without exception, . . . for jurisdiction is power to declare the law, and without jurisdiction
the court cannot proceed at all in any cause" (internal quotation marks, alterations in original,
and citations omitted)).
While Defendants attempt to distinguish the circumstances surrounding the Spears
case and this proceeding, and cite to numerous decisions from other jurisdictions resolving
requests for stays when remand motions are pending, this Court finds the analysis in Spears
persuasive, and will follow it. Accordingly, Defendants' motion to stay will be denied.
Motion to Remand. Plaintiffs seek remand to the City Circuit Court on the ground all
of Plaintiffs' claims are properly joined and this Court lacks subject matter jurisdiction due
to the absence of complete diversity, citing In Re Prempro Prods. Liab. Litig., 591 F.3d 613
(8th Cir. 2010) ("Prempro") and Spears, supra.6 Defendants oppose remand and removed the

6

Plaintiffs also seek remand on the grounds Defendants' notice of removal was not
timely. Having found remand proper due to the lack of subject matter jurisdiction, the Court
will not address the timeliness issue.
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lawsuit from the City Circuit Court due to this Court's diversity jurisdiction and the fraudulent
misjoinder of non-diverse Plaintiffs.
A federal court is a court of limited jurisdiction. Myers v. Richland Cnty., 429 F.3d
740, 745 (8th Cir. 2005) (citing Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375,
377 (1994)). A defendant may remove a civil action filed in a state court to the proper federal
district court if that court has original jurisdiction of the action. 28 U.S.C. § 1441(a). Here,
Defendants removed Plaintiffs' lawsuit from the City Circuit Court based on this Court's
diversity jurisdiction. District courts have original diversity jurisdiction in all civil actions
between citizens of different states if the amount in controversy exceeds $75,000.00. 28
U.S.C. § 1332(a)(1). If the district court lacks subject matter jurisdiction, then the removed
case must be remanded to state court. 28 U.S.C. § 1447(c). The removing party or parties
bear the burden of establishing federal jurisdiction by a preponderance of the evidence, and
"[a]ll doubts about federal jurisdiction should be resolved in favor of remand to state court."
Prempro, 591 F.3d at 620.
The present dispute focuses on the complete diversity requirement of this Court's
diversity jurisdiction. Complete diversity of citizenship exists "'where no defendant holds
citizenship in the same state where any plaintiff holds citizenship.'" Id. at 619 (quoting
OnePoint Solutions, LLC v. Borchert, 486 F.3d 342, 346 (8th Cir. 2007)). The allegations in
Plaintiffs' petition indicate that complete diversity does not exist here because one Plaintiff
resides in Delaware, one resides in Massachusetts, and five reside in New York, states of
which one or more Defendants are citizens. Nevertheless, Defendants urge this Court has

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diversity jurisdiction over Plaintiffs' removed action based on the fraudulent misjoinder
doctrine.
While acknowledging certain courts' recognition of the fraudulent misjoinder doctrine
as a basis for a district court's subject matter jurisdiction over a removed case, the United
States Court of Appeals for the Eighth Circuit has not yet decided whether that doctrine
supports a district court's diversity jurisdiction upon removal. Id. at 622.
A[nother] exception to the complete diversity rule is the fraudulent
misjoinder doctrine, which one appellate court and several district courts have
adopted. 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.
Id. at 620 (footnotes omitted) (quoting Ronald A. Parsons, Jr., Should the Eighth Circuit
Recognize Procedural Misjoinder?, 53 S.D. L. Rev. 52, 57 (2008)).
In Prempro, supra, women and relatives of deceased women who developed breast
cancer as the alleged result of taking hormone replacement therapy (HRT) drugs
manufactured and marketed by the defendant companies filed three lawsuits seeking monetary
relief from the defendants based on tort, breach of warranty, and statutory theories of liability.
Prempro, 591 F.3d at 616-17. After removal on the grounds of fraudulent misjoinder, the
plaintiffs sought remand "for lack of subject matter jurisdiction, asserting that complete
diversity between the plaintiffs and defendants did not exist." Id. at 618. In relevant part, the
district court denied the motions to remand based on its conclusion that the non-diverse

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plaintiffs were misjoined because "there was no reason for the joinder of the non-diverse
plaintiffs other than to defeat diversity jurisdiction." Id. at 618, 619. The district court found
that the only thing common to all of the plaintiffs was that they took an HRT drug; otherwise,
as the court found, the plaintiffs were residents of different states, the plaintiffs were
prescribed different HRT drugs by different doctors, for different lengths of time, and in
different amounts, and the plaintiffs suffered different injuries. Id. at 618.
In reversing the denial of remand, the Eighth Circuit declined to "either adopt or
reject" the fraudulent misjoinder doctrine, concluding that "even if we adopted the doctrine,
the plaintiffs' alleged misjoinder in this case is not so egregious as to constitute fraudulent
misjoinder." Id. at 622. Noting that Federal Rule of Civil Procedure 20(a)(1) permits
multiple plaintiffs to join in a single action if their claims are asserted "with respect to or
aris[e] out of the same transaction, occurrence, or series of transactions or occurrences" and
"any question of law or fact common to all plaintiffs will arise in the action," the Eighth
Circuit acknowledged this Rule "permit[s] all reasonably related claims for relief by or against
different parties to be tried in a single proceeding," without requiring "[a]bsolute identity of
all events." Id. The Eighth Circuit could not "say that [the plaintiffs'] claims have 'no real
connection' to each other such that they are egregiously misjoined" and concluded that the
defendants had not presented evidence that the "plaintiffs joined their claims to avoid diversity
jurisdiction," that the plaintiffs "acted with bad faith," or that the "plaintiffs' misjoinder
borders on a 'sham'" so as to establish egregious misjoinder of claims. Id. at 623, 624.
Accordingly, the Eighth Circuit held the joinder of claims did "not constitute egregious
misjoinder, complete diversity d[id] not exist and the district court erred in denying [the]
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plaintiffs' motions to remand to state court." Id. at 624 (addressing three consolidated cases,
including one in which fifty-seven women named eleven defendants, one in which one
representative of six female decedents sued six defendants).
In Spears, this Court found that
defendants have not demonstrated that the joinder of a Massachusetts citizen
with the other plaintiffs in this action "borders on a 'sham.'" Prempro, 591
F.3d at 624. . . . [P]laintiffs in this case have filed suit against defendants for
injuries or death caused by the same product and arising out of the same
development, distribution, marketing, and sales practices for that product, and
common issues of law and fact are likely to arise in the litigation.
Defendants argue that each plaintiff's claim will depend upon unique
factual determinations, that numerous different states' laws apply to plaintiffs'
claims, and that plaintiffs' joinder was specifically calculated to defeat federal
jurisdiction. The Court finds these arguments unpersuasive. Plaintiffs' claims
need not arise from the same transaction or occurrence, nor must they share
a common outcome, so long as common questions of law or fact are likely to
arise in the litigation. Prempro, 591 F.3d at 622-23. Finally, "the bad faith
referred to [in Prempro] must be something more than a desire to defeat
federal jurisdiction." Dickerson v. GlaxoSmithKline, LLC, No. 4:10-CV-972
(AGF), 2010 WL 2757339, at *2 (E.D. Mo. July 12, 2010) (citing Iowa Pub.
Serv. Coc. v. Med. bow Coal Co., 556 F.2d 400, 406 (8th Cir. 1997)).
Plaintiffs were not egregiously joined in this suit, and, as such, there is
no complete diversity of citizenship as required by 28 U.S.C. § 1332.
Therefore, this Court lacks subject matter jurisdiction.
Spears, 2013 WL 2643302, at *3.
Finding persuasive the reasoning of the Eighth Circuit's Prempro decision and of this
Court's decision in Spears, the Court finds that remand is warranted here because, even if the
fraudulent misjoinder doctrine applies, it does not support this Court's exercise of jurisdiction
under the circumstances. Defendants urge there is fraudulent misjoinder here because the
numerous Plaintiffs are from different states and received care from different doctors at

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different times and experienced administration of GranuFlo® resulting in different injuries.
Those facts, however, are not sufficient to support remand under the fraudulent misjoinder
doctrine. Similar arguments were rejected by in the Prempro and Spears decisions. As the
Eighth Circuit concluded, "there may be a palpable connection between the plaintiffs' claims
against the manufacturers as they all relate to similar drugs and injuries and the manufacturers'
knowledge of the risks of HRT drugs." Prempro, 591 F.3d at 623. This determination
applies equally here, because Plaintiffs' claims "all relate to [the administration of Granuflo®]
and [similar] injuries and the manufacturers' knowledge of the risks of [the GranuFlo®]."
To the extent Defendants rely on defenses to the merits of certain non-diverse
Plaintiffs' claims in an effort to defeat remand, those arguments are not persuasive because
they do not focus on every New York Plaintiff, leaving at least one, if not more, non-diverse
Plaintiffs in the case even if this Court agreed with Defendants' analysis.
Having carefully considered the record and the parties' arguments; and concluding that
one or more common questions of law and fact, including issues pertaining to the safety of
GranuFlo® and Defendants' knowledge and warnings of the risks of GranuFlo®, are likely
to arise in this lawsuit; and finding that Defendants have not shown egregious misjoinder,
Plaintiffs' motion to remand will be granted.
Motion to Sever. As in Spears, supra, the motion to sever will be denied without
further discussion.
Conclusion
After careful consideration,

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IT IS HEREBY ORDERED that Defendants' motions to stay [Doc. 2] and to sever
[Doc. 4] are DENIED.
IT IS FURTHER ORDERED that Plaintiffs' motion to remand [Doc. 18] is
GRANTED.
IT IS FINALLY ORDERED that the Clerk of Court shall remand this case to the
Circuit Court for the Twenty-Second Judicial Circuit (St. Louis City) for the State of Missouri
for lack of subject matter jurisdiction. See 28 U.S.C. § 1447(c).

/s/ Thomas C. Mummert, III
THOMAS C. MUMMERT, III
UNITED STATES MAGISTRATE JUDGE
Dated this 9th day of January, 2014.

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