ALLSTATE NEW JERSEY INSURANCE COMPANY et al v. SUMMIT PHARMACY, INC. et al
Filing
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MEMORANDUM OPINION. Signed by Chief Judge Jerome B. Simandle on 12/19/2013. (dmr)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
ALLSTATE NEW JERSEY INSURANCE
COMPANY, et al.,
Plaintiffs,
Civil Action
No. 13-5809 (JBS/KMW)
v.
SUMMIT PHARMACY, INC., et al.,
Defendants.
MEMORANDUM OPINION
SIMANDLE, Chief Judge:
This matter comes before the Court on Plaintiffs’ motion to
remand to New Jersey Superior Court [Docket Item 3], which the
Court will deny. The Court finds as follows:
1.
On August 8, 2013, Plaintiffs Allstate New Jersey
Insurance Company, Allstate Indemnity Company, Allstate Property
and Casualty Insurance Company, Allstate New Jersey Property and
Casualty Insurance Company, and Allstate Insurance Company
(collectively “Allstate”) filed a complaint in New Jersey
Superior Court against 31 named Defendants: Summit Pharmacy,
Inc.; Jonathan Morton, CEO; Joel Morton, DO; Laurie Meade,
COO/president; Apral Jones, pharmacist; Sherri Oxford,
pharmacist; Cang Nguyen, pharmacist; Lonny Allis, pharmacist;
Mauricio Fabiano, pharmacist; Stephen Persons, pharmacist; Matt
Peters, pharmacist; Tien Lai, pharmacist; Jessica Lee; Melissa
Fuentes FLAA; William Crane; Jill M. Salajka; Kimberly Bastian;
Janine Centenzo; Mataleigh Walling; Libby Fuentes; Ashley Levin;
Meliza Miranda; South Jersey Health and Wellness, LLC; Daniel
DePrince, III, DO; Anthony C. Carabasi, DC; Michael Edenzon, DC;
Ty Countess; Neurology Pain Associates PC; Neurological Trauma
Associates; Russell Abrams, MD; and Keith Preis, MD.1
2.
Plaintiffs asserted claims under the federal Racketeer
Influenced and Corrupt Organizations (“RICO”) Act, the New
Jersey RICO statute, and the New Jersey Insurance Fraud
Prevention Act. Plaintiffs sought declaratory judgment and
disgorgement of funds for an alleged conspiracy to unlawfully
provide prescription services to customers receiving personal
injury protection (“PIP”) benefits from Allstate. Plaintiffs
allege that Defendants “denied Allstate insureds the right to
have their prescriptions filled by a pharmacy of the insureds’
choice by using pressure, inducement, and subterfuge . . .” to
steer them to Defendant Summit Pharmacy. (Compl. ¶ 56.)
Plaintiffs also allege that “Defendant Summit provided
prescription services to patients of Defendant medical providers
in violation of New Jersey and Arizona registration, licensing
and medical record requirements.” (Compl. ¶ 117.) Plaintiffs
sought to recover more than $2,296,074.84. (Compl. ¶ 56.)
3.
On August 22, 2013, Plaintiffs filed an Amended
Complaint, which included one new Plaintiff, Encompass Insurance
1
Plaintiffs also named fictitious Defendants.
2
Company, and six new Defendants, Summit Testing, Inc.; James
Scullin, Board of Director; Charles McWade, Board of Director;
Luke O’Brien, Board of Director; Charles G. Avetian, DO; and
Leslie Davis, PA.2
4.
On September 27, 2013, eight Defendants filed a notice
of removal [Docket Item 1]. The eight Defendants were South
Jersey Health and Wellness, LLC; Daniel DePrince, III, DO;
Anthony C. Carabasi, DC; Michael Edenzon, DC; Neurology Pain
Associates, PC; Neurological Trauma Associates; Russell Abrams,
MD; and Keith Preis, MD. These eight Defendants asserted that
this Court had both original and diversity jurisdiction under 28
U.S.C. §§ 1331 and 1332.
5.
On October 25, 2013, Plaintiffs filed a motion to
remand [Docket Item 3] arguing that the notice of removal did
not include all the named Defendants and did not indicate that
all named Defendants consented to removal, thus violating the
unanimity rule. Plaintiffs also argued that the notice of
removal was not timely because it was filed more than 30 days
after service of process in the state court action. Plaintiffs
2
The initial Complaint referenced Mauricio Fabiano and in the
Amended Complaint referenced Mauricio Franco. The initial
Complaint also referenced Ty Countess and the Amended Complaint
referenced Robert Ty Countess. The Court assumes Plaintiffs were
referencing the same individuals.
3
demanded costs and expenses as a result of the eight Defendants’
defective removal.
6.
On October 29, 2013, Defendants Summit Pharmacy, Inc.;
Summit Testing, Inc.; Jonathan Morton, CEO; Joel Morton, DO;
Laurie Meade, COO/President; James Scullin, Board of Director;
Charles McWade Board of Director; Luke O’Brien, Board of
Director; Apral Jones, Pharmacist; Sherri Oxford, Pharmacist;
Cang Nguyen, Pharmacist; Lonny Allis, Pharmacist; Mauricio
Fabiano, Pharmacist; Stephen Persons, Pharmacist; Matt Peters,
Pharmacist; Tien Lai, Pharmacist; Jessica Lee; Melisa Fuentes
Flaa; William Crane; Jill M. Salajka; Kimberly Bastian; Janine
Centanzo; Nataleigh Walling; Libby Fuentes; Ashley Levin; and
Meliza Miranda filed a notice consenting to and joining the
removal petition. [Docket Item 4.]
7.
Also on October 29, 2013, an amended stipulation
[Docket Item 7] was filed showing that Defendant Robert Ty
Countess also consented to removal.
8.
On October 30, 2013, Plaintiffs filed a reply [Docket
Item 8] arguing that the subsequent filing of the untimely
notices of consent did not satisfy the unanimity rule and that
the notice of removal was still untimely.
9.
On October 3, 2013, Plaintiffs filed a second amended
complaint in the state court action and added seventeen named
4
Defendants: Jeff Schwartz, pharmacist; Nick Centanzo; Eva Jee;
Christopher Virginia; Jessica Starkovich; Phanida Phivilay;
Advanced Spine and Pain, LLC; Young J. Lee, MD; Milind D.
Patharkar, MD; R. Todd Rinnier, DO; Eileen Manabat, MD; Adaku U.
Nwachuku, DO; Chioma Ezeadichie, DO; Tracey Hessert, NP; Kyriaki
Sandy Revenidis, APN; Maraynn Mascl, APN; and Ijeoma Menkltl,
ANP-BC (“new Defendants”). Plaintiffs asserted, inter alia,
their federal RICO claim against the new Defendants.
10.
On November 1, 2013, a second notice of removal
[Docket Item 9] was filed by Defendants Summit Pharmacy,
Summit Testing, and various Summit employees (collectively
“Summit Defendants”): Jonathan Morton, CEO; Joel Morton, D.O.;
Laurie Meade, COO/President; James Scullin, Board of Director;
Charles McWade, Board of Director; Luke O’Brien, Board of
Director; Apral Jones, Pharmacist; Sherri Oxford, Pharmacist;
Cang Nguyen, Pharmacist; Lonny Allis, Pharmacist; Mauricio
Franco, Pharmacist; Stephen Persons, Pharmacist; Matt Peters,
Pharmacist; Tien Lai, Pharmacist; Jeff Schwartz, Pharmacist;
Jessica Lee; Melisa Fuentes Flaa; William Crane; Jill M.
Salajka; Kimberly Bastian; Janine Centanzo; Nataleigh Walling;
Libby Fuentes; Ashley Levin; Meliza Miranda; Nick Centanzo; Eva
Jee; Christopher Virginia; Jesica Starkovich; and
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Phanida Phivilay. Some of these Defendants were named for the
first time in Plaintiffs’ second amended complaint.
11.
The second notice of removal included written consent
to removal from all other Defendants [Docket Item 9-7].
12.
Defendants argued that even if the first notice of
removal was defective or untimely, they “may still remove this
case . . . by virtue of Plaintiffs’ filing of the Second Amended
Complaint and the naming of additional Defendants therein.”
(Def. 2nd Notice Removal ¶ 17.) Essentially, Defendants asserted
that the second amended complaint setting forth federal claims
against the new defendants triggered a new thirty-day period for
removal for the new defendants.
13.
On November 6, 2013, Plaintiffs filed opposition to
the second notice of removal. [Docket Item 10.] Plaintiffs again
challenged the timeliness of the first notice of removal.
14.
Plaintiffs also emphasized that “most of the Summit
employees” were served before the Second Amended Complaint was
filed and that “[f]rom the time that Summit counsel first
advised Plaintiffs’ counsel in late August, 2013 that he
represented defendant Summit and the Summit individual
defendants until October 29, 2013, Summit’s counsel took no
steps to remove the State Court Action to Federal Court.” [Id.
at 3.] Plaintiffs argued that, prior to filing the second notice
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of removal, “counsel for the Summit defendants gave
[Plaintiffs’] counsel every indication that the case would
proceed in State Court, including executing a Stipulation
Agreement to Extend the Time for filing their Answer in State
Court.” [Docket Item 10 at 2.] Plaintiffs argued that, absent
this stipulation, they would have sought default judgment in
state court.
15.
Plaintiffs alleged that there may be a conflict of
interest between the Summit Pharmacy and its employees, thus
casting doubts regarding their shared representation. Plaintiffs
argued that doubts regarding the propriety of removal
necessitated a remand.
16.
On November 17, 2013, the Summit Defendants filed
opposition [Docket Item 11] to Plaintiff’s motion to remand and
responded to the arguments that Plaintiffs raised in their
opposition to the second notice of removal. The Summit
Defendants asserted that the right to removal is personal to
each Defendant.
17.
On December 12, 2013, the Summit Defendants filed a
motion for leave to file an out of time opposition to
Plaintiffs’ motion for remand. [Docket Item 13.] They attached
another opposition brief arguing that the second notice of
removal was proper.
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18.
The Court will now turn to its analysis. Plaintiffs’
motion to remand will be denied because it is moot. The motion
to remand responded to the first notice of removal, which was
superseded by the second amended complaint and the second notice
of removal.
19.
The Court will nonetheless address the arguments that
Plaintiffs propounded in their opposition to the second notice
of removal.
20.
“[A]ny civil action brought in a State court of which
the district courts of the United States have original
jurisdiction may be removed . . . .” 28 U.S.C. § 1441(a). The
notice of removal “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.” 28 U.S.C. §
1446(b)(1). “[A]ll defendants who have been properly joined and
served must join in or consent to the removal of the action” and
“[e]ach defendant shall have 30 days after receipt by or service
on that defendant of the initial pleading or summons . . . to
file the notice of removal.” 28 U.S.C. § 1446(b)(2)(A-B).
“Removal statutes are to be strictly construed, with all doubts
to be resolved in favor of remand.” Brown v. Jevic, 575 F.3d
322, 326 (3d Cir. 2009).
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21.
This action is removable because the Court has
original jurisdiction under 28 U.S.C. § 1331 based on
Plaintiffs’ federal RICO claims under 18 U.S.C. § 1961, et seq.
22.
Even if the first notice of removal was defective and
untimely, the second notice of removal was not. The second
notice of removal was timely because the second amended
complaint was filed on October 3, 2013 and the second notice of
removal was filed within thirty days, on November 1, 2013.3 The
new Defendants in the second amended complaint had a right to
removal because “each defendant individually has thirty days to
file a notice of removal beginning when that particular
defendant is served.” Delalla v. Hanover Ins., 660 F.3d 180, 185
(3d Cir. 2011).
23.
Sharing counsel with previously-served Defendants does
not obviate the new Defendants’ right to removal. See Orlick v.
J.D. Carton & Son, Inc., 144 F. Supp. 2d 337, 343 n.6 (D.N.J.
2001) (“The fact that the same counsel . . . represents both
Defendants should not affect the timeliness of Defendant
Allied's notice of removal . . . the knowledge of counsel should
3
Plaintiffs allege that the Second Amended Complaint was served
on October 2, 2013, when Plaintiffs sent it to counsel for
Summit Pharmacy and its employees. The Summit Defendants dispute
that their attorney’s receipt of the Second Amended Complaint
constituted service. This dispute is immaterial because the
second notice of removal was filed on November 1, 2013, which is
within the thirty-day window for removal, even if the thirty
days are counted from October 2, 2013.
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not, as a matter of law, prejudice the later-served defendant .
. .”). The right to removal is specific to each defendant, not
each attorney.
24.
In addition, any delays in the state court action
prior to the filing of the second amended complaint do not
preclude the new Defendants’ right to removal.
25.
Plaintiffs have alleged a conflict of interest between
Summit Pharmacy and its employees, which may implicate the
propriety of shared representation. Even if there were a
conflict of interest, it would not obviate the new Defendants’
right to removal. Moreover, Plaintiffs have not substantiated
this allegation. The Court does not eschew ethical obligations
and rules, but unsubstantiated allegations cannot preclude the
new Defendants’ substantive right to removal.
26.
The Court will also deny the Summit Defendants’ motion
to file out of time opposition [Docket Item 13]. Plaintiff’s
motion to remand was returnable on November 18, 2013 and
opposition was due by November 4, 2013. The Summit Defendants
filed a late opposition brief on November 17, 2013 without leave
of Court. They now seek permission to file another late brief,
which raises many arguments already raised in their previous
opposition. The Court will not permit a second, late opposition
brief. Moreover, counsel’s recounting in this motion of a
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conversation with Chambers does not reflect the Court’s
recollection of that conversation.4 To avoid such confusion in
the future, counsel shall refrain from calling Chambers.
27.
Plaintiff’s motion to remand and the Summit
Defendants’ motion for leave to file an out of time opposition
are both denied. The Court finds the second removal was both
timely and proper. The accompanying Order will be entered.
December 19, 2013
Date
s/ Jerome B. Simandle
JEROME B. SIMANDLE
Chief U.S. District Judge
4
Counsel for the Summit Defendants assert that my law clerk
informed them that the Court’s adjudication of the pending
motion to remand was stayed. That is not true. Counsel asked my
law clerk whether the Court planned to adjudicate the motion,
and she responded that the Court adjudicates every pending
motion on its docket. Counsel also told my law clerk that the
motion had never been set for a motion day and thus there had
been no opposition deadline. She informed counsel that the
motion has been set for November 18, 2013, thus making
opposition due November 4, 2013. Counsel asked my clerk whether
it could file late opposition. She informed counsel that the
Court requires counsel requesting extensions to first seek
opposing counsel’s consent and then to file a letter request on
the docket.
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