Matroni et al v. Watson Pharmaceuticals, Inc., a Nevada corporation et al
Filing
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ORDER granting Plaintiff's 9 Motion to Remand to State Court. Signed by Judge Kent J. Dawson on 6/15/11. (Copies have been distributed pursuant to the NEF - ECS, copy of order and docket sheet to 8th Judicial District Court)
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UNITED STATES DISTRICT COURT
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DISTRICT OF NEVADA
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ELAINE JOYCE MATRONI, individually,
as personal representative of the ESTATE
OF COLLEEN FULLER, Deceased, et al.,
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Plaintiffs,
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ORDER
v.
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Case No. 2:10-CV-01589-KJD-PAL
WATSON PHARMACEUTICALS, INC.,
et al.,
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Defendants.
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Currently before the Court is Plaintiff’s Motion to Remand (#9). Defendants Watson
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Laboratories, Inc. (“WLI-Delaware”) and Watson Pharma, Inc. (“WPI-Delaware”) filed a Response
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in Opposition (#14), to which Plaintiff’s filed a Reply (#16).
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I. Procedural History
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This is an action for the wrongful death of Decedent, Colleen Fuller. Plaintiffs allege that her
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death was caused by a defective 50 mcg/hour fentanyl patch. (Pls.’ Compl. ¶¶ 10, 18.) The medical
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examiner determined that the cause of Decedent’s death was “fentanyl toxicity.” (Pls.’ Compl. ¶ 18.)
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Plaintiff Elaine Joyce Matroni, an individual and citizen of Florida, and Plaintiffs Howard Fuller and
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Donnayn Wasano, individuals and citizens of Nevada, brought suit against four Watson
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Pharmaceuticals entities: Watson Pharmaceuticals, Inc., a citizen of Nevada with its principal place
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of business in Corona, CA (“WPI-Nevada”); Watson Laboratories, Inc., a citizen of Nevada (“WLI-
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Nevada”); Watson Laboratories, Inc., a citizen of Delaware (“WLI-Delaware”); and Watson Pharma,
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Inc., a citizen of Delaware (“WPI-Delware”). Plaintiffs filed an action in Nevada state court,
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alleging strict products liability, negligence in design, manufacture, marketing, testing, and sale of
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the fentanyl patches, negligent misrepresentation, and breach of warranty. Plaintiffs allege that
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Defendants designed, marketed, manufactured, sold, and/or supplied the patches that were used by
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Decedent. (Pls.’ Compl. ¶ 20.) Plaintiffs further allege that the patch worn by Decedent was in
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defective condition at the time that it left Defendants’ possession. (Pls.’ Compl. ¶ 20.) Defendant
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WPI-Nevada is the direct or indirect parent company of WLI-Nevada, WPI-Delaware, and WLI-
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Delaware.
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Defendants WPI-Delaware and WLI-Delaware (collectively, “Delaware Defendants”) filed a
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Petition for Removal (#1) on September 16, 2010, on the grounds of diversity jurisdiction. Despite
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apparent lack of diversity, Defendants claim that removal was proper under 28 U.S.C. §§ 1332,
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1441(a), and 1446 because Defendants WPI-Nevada and WLI-Nevada (collectively, “Nevada
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Defendants”) were fraudulently joined solely for the purpose of defeating diversity. Delaware
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Defendants allege that since Nevada Defendants were not involved in the design, manufacture,
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marketing, or distribution of any fentanyl patches, Plaintiffs have no possibility of recovering from
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Nevada Defendants under any of the alleged theories, and thereby failed to state a cause of action
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against Nevada Defendants. On October 15, 2010, Plaintiffs moved to remand the action to state
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court.
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In their Motion to Remand (#9), Plaintiffs argue that removal was improper because this
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Court lacks jurisdiction. Plaintiffs allege that diversity jurisdiction cannot be established because
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Plaintiffs and Nevada Defendants are all Nevada citizens. Plaintiffs contend that Nevada Defendants
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destroy diversity because they were not fraudulently joined, since it is allegedly within the reach of
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the theories of strict liability as a marketer, distributor, or manufacturer of the patch at issue.
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On the face of Plaintiff’s Complaint, this Court lacks jurisdiction based on diversity
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citizenship. Plaintiff’s have undoubtably joined non-diverse defendants (Nevada Defendants) in the
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action, asserting a strict product liability claim. But Delaware Defendants oppose remand, arguing
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that Nevada Defendants were fraudulently joined and their citizenship has no effect on diversity.
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The Court disagrees.
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II. Legal Standard for Motion to Remand
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Defendants may remove a suit from a state court to federal court only if it could have been
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filed there originally. See 28 U.S.C. § 1441(a) (2010); Caterpillar, Inc. v. Williams, 482 U.S. 386,
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392 (1987). Federal district courts have original jurisdiction over cases where the amount in
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controversy exceeds $75,000, and where complete diversity exists between the parties. 28 U.S.C. §
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1332(a). A corporation is deemed to be citizens of both the state that it is incorporated and the state
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where it has its principal place of business. § 1332(c). The citizenship of defendants sued under
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fictitious names is disregarded for purposes of removal. § 1441(a).
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If a defendant has been “fraudulently joined,” that defendant’s citizenship is ignored when
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determining diversity and removability. Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th
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Cir. 2001); see Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1318 (9th Cir. 1998) (“it is a
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commonplace that fraudulently joined defendants will not defeat removal on diversity grounds”). A
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party is fraudulently joined “[i]f a plaintiff fails to state a cause of action against a resident defendant,
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and the failure is obvious according to the well-settled rules of the state.” Morris, 236 F.3d at 1067
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(citations omitted); Knutson v. Allis-Chalmers Corp., 358 F. Supp. 2d 983, 993 (D. Nev. 2005). In
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other words, “a plaintiff need only have one potentially valid claim against a non-diverse defendant”
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to establish that there has been no fraudulent joinder. Id.
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Fraudulent joinder claims are reviewed on a standard similar to or more lenient than the
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12(b)(6) motion. Id. at 996 (citing Sessions v. Chrysler Corp., 517 F.2d 759, 761 (9th Cir. 1975)).
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Although the courts generally look only to a plaintiff’s pleadings to determine whether a cause of
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action is stated, “where fraudulent joinder is an issue, . . . [a] defendant seeking removal is entitled to
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present the facts showing why the joinder is fraudulent.” Id. at 993; Ritchey, 139 F.3d at 1318
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(citations omitted). Thus, the Court may “pierce the pleadings” and consider “summary judgment-
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type evidence presented by the defendant” to make a factual determination. Morris, 236 F.3d at 1068
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(citing Cavallini v. State Farm Mut. Auto Ins. Co., 44 F.3d 256, 263 (5th Cir. 1995)). But “district
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courts must not ‘pre-try’ substantive factual issues in order to answer the discrete threshold question
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of whether the joinder of an in-state defendant is fraudulent.” B., Inc v. Miller Brewing Co., 663
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F.2d 545, 546 (5th Cir. 1981). “There is a presumption against finding fraudulent joinder, and
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defendants who assert that plaintiff has fraudulently joined a party carry a heavy burden of
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persuasion.” Plute v. Roadway Package System, Inc., 141 F.Supp.2d 1005, 1008 (N.D.Cal.2001)
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(citing Nishimoto v. Federman-Bachrach & Assocs., 903 F.2d 709, 712 n. 3 (9th Cir.1990) and
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Emrich v. Touche Ross & Co., 846 F.2d 1190, 1195 (9th Cir.1988).
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III. Analysis
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“The burden of proving a fraudulent joinder is a heavy one. The removing party must prove
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that there is absolutely no possibility that the plaintiff will be able to establish a cause of action
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against the in-state defendant in state court ...” Green v. Amerada Hess Corp., 707 F.2d 201, 205 (5th
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Cir.1983) (citations omitted); see also Dodson v. Spiliada Mar. Corp., 951 F.2d 40, 42 (5th Cir.1992)
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(“We do not decide whether the plaintiff will actually or even probably prevail on the merits, but
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look only for a possibility that he may do so. If that possibility exists, then a good faith assertion of
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such an expectancy in a state court is not a sham ... and is not fraudulent in fact or in law.”) (citations
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and internal quotation marks omitted); Good v. Prudential Ins. Co. of Am., 5 F.Supp.2d 804, 807
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(N.D.Cal.1998) (“[T]he defendant must demonstrate that there is no possibility that the plaintiff will
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be able to establish a cause of action in state court against the alleged sham defendant.”) (citing
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Dodson 951 F.2d at 42). Adherence to this high standard, requires courts to “resolve all issues of
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fact and all ambiguities in the law in favor of the non-removing party when deciding whether
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fraudulent joinder exists in a given case.” Suarez v. American Airlines, Inc., 2009 WL 1657444, 2
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(C.D.Cal. 2009). (citing Dodson, 951 F.2d at 42).
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Under established Nevada law, to prevail on a strict product liability claim the plaintiff must
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prove that the defendant in question manufactured, sold, or distributed the defective product. See
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Allison v. Merck & Co., Inc., 878 P.2d 948, 952 (Nev. 1994). Delaware Defendants claim that
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Plaintiffs have no viable claims against either Nevada Defendant. Specifically, Delaware Defendants
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contend that no strict product liability claim can be proved against Corona-based Defendant WLI-
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Nevada because that entity does not manufacture fentanyl patches. Delaware Defendants instead
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allege that the Watson Laboratories based out of Utah is the subsidiary that actually manufactures
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fentanyl patches.
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However, Plaintiffs present evidence suggesting that WLI-Nevada was in fact involved in the
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manufacturing of the fentanyl patches. Plaintiffs provide the Court with a copy of the “Full
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Prescribing Information” that accompanies every box of 75 mcg/hr fentanyl patches obtained from
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Watson Pharmaceuticals’ website that states the patches are “Manufactured by: Watson Laboratories,
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Inc., Corona, CA 92880 USA.” Dec. of Charles W. Miller in Sup. of Mot. for Remand, Exh. 1.
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Defendant WLI-Nevada is the only Watson Laboratories located in Corona, California. Plaintiffs
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also provide a snapshot from Watson Pharmaceuticals’ website of the packaging of a 50 mcg/hr
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fentanyl patch that includes the text “Watson Laboratories, Inc. Corona, CA 92880 USA.” Dec. of
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Charles W. Miller in Sup. of Mot. for Remand, Exh. 2. Viewed in the light most favorable to
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Plaintiffs, this evidence suggests that WLI-Nevada participates in the manufacturing of fentanyl
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patches. In considering the strong presumption against finding fraudulent joinder, the Court
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concludes that there is a possibility Plaintiffs could recover from non-diverse Defendant WLI-
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Nevada. WLI-Nevada’s citizenship cannot be ignored for purposes of removal and this Court lacks
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jurisdiction based on diversity of citizenship. Since Plaintiffs have one potentially valid claim
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against a non-diverse defendant, the remaining claims and defenses put forth by Plaintiffs and
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Defendants need not be analyzed for purposes of remand.
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IV. Conclusion
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Accordingly, IT IS HEREBY ORDERED that Plaintiff’s Motion to Remand (#9) is
GRANTED.
Dated this 15th day of June, 2011.
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___________________________
Kent J. Dawson
United States District Judge
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