Bragg et al v. Johnson & Johnson et al

Filing 35

MEMORANDUM OPINION AND ORDER (Defendants' Motions to Dismiss, Sever, and Stay, and Plaintiffs' Motion to Remand) the defendants' 2 Motion to Dismiss is GRANTED except as to the one Texas plaintiff, Denise Bragg; the defendants' 3 Motion to Sever is DENIED as moot; and the defendants' 4 Motion to Stay is DENIED as moot, as more fully set forth herein. The plaintiffs' 10 Motion to Remand to State Court is DENIED, as more fully set forth herein. Signed by Judge Joseph R. Goodwin on 8/17/2015. (cc: counsel of record; any unrepresented party) (ts)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
CHARLESTON DIVISION

DENISE BRAGG, et al.,
Plaintiffs,
v.

CIVIL ACTION NO. 2:14-cv-29743

JOHNSON & JOHNSON, et al.,
Defendants.

MEMORANDUM OPINION AND ORDER
(Defendants’ Motions to Dismiss, Sever, and Stay, and Plaintiffs’ Motion to Remand)
Pending before the court are the defendants’ Motion to Dismiss [Docket 2], the defendants’
Motion to Sever [Docket 3], the defendants’ Motion to Stay [Docket 4], and the plaintiffs’ Motion
to Remand to State Court [Docket 10]. For the reasons set forth below, the Motion to Dismiss is
GRANTED except as to the one Texas plaintiff, Denise Bragg; the Motion to Sever is DENIED
as moot; the Motion to Stay is DENIED as moot; and the Motion to Remand to State Court is
DENIED.
I.

Introduction
This case resides in one of seven MDLs assigned to me by the Judicial Panel on

Multidistrict Litigation concerning the use of transvaginal surgical mesh to treat pelvic organ
prolapse (“POP”) and stress urinary incontinence (“SUI”). In the seven MDLs, there are more than
70,000 cases currently pending, approximately 25,000 of which are in the Ethicon, Inc. MDL,
MDL 2327. In this particular case, the plaintiffs were surgically implanted with various mesh

products manufactured by Johnson & Johnson and Ethicon, Inc. (collectively, the “defendants”).
(See First Am. Pet. & Jury Demand (“Petition”) [Docket 1-6] ¶ 15). The plaintiffs claim that as a
result of implantation of these mesh products, they have experienced multiple complications,
including “mesh erosion, mesh contraction, infection, fistula, inflammation, scar tissue, organ
perforation, dyspareunia (pain during sexual intercourse), blood loss, acute and chronic nerve
damage and pain, pudendal nerve damage, pelvic floor damage, chronic pelvic pain, urinary and
fecal incontinence, and prolapse of organs.” (Id. ¶ 35). The plaintiffs allege negligence, design
defect, manufacturing defect, failure to warn, vicarious liability, compensatory damages, loss of
consortium, punitive damages, and fraudulent concealment. (Id. ¶¶ 43–67).
The Petition, initially filed in Texas state court, names fifty plaintiffs. One plaintiff resides
in Texas and received her surgery in Texas. (Id. ¶ 2). The remaining plaintiffs are out-of-state
residents, (id. at Ex. 1), including one plaintiff from New Jersey. (Id. ¶ 3). It is not clear from the
Petition where the remaining plaintiffs received their implantation surgeries. The Petition alleges
the defendants are incorporated in New Jersey and that each “engages in business in Texas but
does not maintain a regular place of business in the state or a designated agent for service of
process.” (Id. ¶¶ 7–8).
On August 21, 2014, the defendants each appeared specially to contest personal jurisdiction
over the claims alleged by the forty-nine out-of-state plaintiffs. (See J&J’s Spec. App. [Docket 114]; Ethicon’s Spec. App. [Docket 1-13]). The defendants preserved those objections to personal
jurisdiction in their respective Answers. (See, e.g., J&J’s Original Answer & Defenses [Docket 115]).
The defendants removed this action to the United States District Court for the Eastern
District of Texas on August 25, 2014, asserting the court “has original subject matter

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jurisdiction . . . pursuant to 28 U.S.C. § 1332(a) because there is complete diversity among all
properly joined and served parties and the amount in controversy exceeds $75,000.00.” (See Notice
of Removal [Docket 1], at 2). On the same day, the defendants moved: (1) to dismiss the claims
of the fifty out-of-state plaintiffs for lack of personal jurisdiction, (Mot. to Dismiss [Docket 2]);
(2) to sever all claims brought by the New Jersey plaintiff, (Mot. to Sever [Docket 3]); and (3) to
stay all proceedings in the Texas federal court, pending a decision to transfer the case into MDL
2327, (Mot. to Stay [Docket 4]). On September 11, 2014, the plaintiffs moved to remand the case
to state court for lack of subject matter jurisdiction. (Mot. for Remand [Docket 10]). Finally, on
December 12, 2014, the case was transferred into MDL 2327 before this court, (see Transfer Order
[Docket 30]), rendering moot the defendants’ Motion to Stay. The pending motions are ripe for
disposition.
II.

Order of Consideration
Under 28 U.S.C. § 1407, this court has authority to rule on pretrial motions in MDL cases.

Here, there are two intertwined jurisdictional issues presented in the defendants’ Motion to
Dismiss and the plaintiffs’ Motion to Remand to State Court. The defendants argue that the outof-state plaintiffs’ claims should be dismissed because, with regard to those claims, a Texas court
cannot exercise personal jurisdiction over the defendants. Dismissing those claims, the defendants
contend, would create complete diversity between the remaining parties, thereby giving the court
subject matter jurisdiction. Accordingly, the defendants urge the court to consider personal
jurisdiction first. The plaintiffs, on the other hand, contend that personal jurisdiction exists for all
claims and that joinder of the claims is proper, including claims brought by the out-of-state
plaintiffs, thus eliminating complete diversity and stripping the court of subject matter jurisdiction.

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The plaintiffs urge the court to resolve the subject-matter-jurisdiction inquiry prior to addressing
personal jurisdiction.
The defendants rely on Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574 (1999), for the
premise that the court may decide issues of personal jurisdiction before considering whether
subject matter jurisdiction exists. Contending the opposite, the plaintiffs rely on Steel Co. v.
Citizens for a Better Environment, 523 U.S. 83 (1998), a case Ruhrgas expressly distinguished.
526 U.S. at 583 (“The Fifth Circuit incorrectly read Steel Co. to teach that subject-matter
jurisdiction must be found to exist, not only before a federal court reaches the merits, but also
before personal jurisdiction is addressed.” (citation omitted)). In Ruhrgas, a unanimous Court
stated:
We hold that in cases removed from state court to federal court, as in cases
originating in federal court, there is no unyielding jurisdictional hierarchy.
Customarily, a federal court first resolves doubts about its jurisdiction over the
subject matter, but there are circumstances in which a district court appropriately
accords priority to a personal jurisdiction inquiry.
Id. at 578. In reaching the conclusion that it was within the lower court’s discretion to address
personal jurisdiction first, the Court reasoned: “the impediment to subject-matter jurisdiction on
which [plaintiff] relies—lack of complete diversity—rests on statutory interpretation, not
constitutional command,” id. at 584, whereas “[defendant] relies on the constitutional safeguard
of due process to stop the court from proceeding to the merits of the case.” Id. (citation omitted).
“Where . . . a district court has before it a straightforward personal jurisdiction issue presenting no
complex question of state law, and the alleged defect in subject-matter jurisdiction raises a difficult
and novel question, the court does not abuse its discretion by turning directly to personal
jurisdiction.” Id. at 588 (footnote omitted); see also Lolavar v. de Santibanes, 430 F.3d 221, 227

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(4th Cir. 2005) (same); Pervasive Software Inc. v. Lexware GmbH & Co., 688 F.3d 214, 232 (5th
Cir. 2012) (same).
Here, the parties’ arguments on subject matter jurisdiction, specifically regarding complete
diversity, are grounded in the relatively recent and untested doctrine of procedural or fraudulent1
misjoinder. “According to the Eleventh Circuit, the federal court should disregard the citizenship
of a fraudulently-joined party . . . when the plaintiff joins co-parties—such that complete diversity
of citizenship between plaintiffs and defendants does not exist—when a factual nexus among the
claims asserted (by or) against those parties is not sufficient to satisfy Federal Civil Rule 20.” 14B
Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 3723 (4th ed. 2009)
(discussing Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353 (11th Cir. 1996), abrogated on other
grounds by Cohen v. Office Depot, Inc., 204 F.3d 1069 (11th Cir. 2000)). Like many of its sister
circuits, the United States Court of Appeals for the Fourth Circuit has not expressly adopted the
doctrine. See Wyatt v. Charleston Area Med. Ctr., Inc., 651 F. Supp. 2d 492, 496 (S.D. W. Va.
2009) (explaining the difference between fraudulent joinder and fraudulent misjoinder and noting
the latter is “relatively new and not clearly defined”); see also In re Benjamin Moore & Co., 318
F.3d 626, 630–31 (5th Cir. 2002) (“[W]ithout detracting from the force of the Tapscott principle
that fraudulent misjoinder of plaintiffs is no more permissible than fraudulent misjoinder of
defendants to circumvent diversity jurisdiction, we do not reach its application in this case.”). In
other words, engaging the parties’ arguments on procedural or fraudulent misjoinder, and in turn
subject matter jurisdiction, may require passage upon unsettled jurisdictional grounds.
By contrast, the personal jurisdiction inquiry here turns on a relatively simple issue:
whether a Texas court may exercise jurisdiction over claims against out-of-state corporate
Many cases refer to the mechanism as “fraudulent misjoinder,” likely because of the influence of the wellestablished doctrine of “fraudulent joinder” on the former’s development.
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defendants based on the defendants’ unrelated contacts with the forum.2 See Evans v. Johnson &
Johnson, No. CIV.A. H-14-2800, 2014 WL 7342404, at *3 (S.D. Tex. Dec. 23, 2014) (examining
materially indistinguishable factual and legal arguments and “determin[ing] that the most efficient
course of action is to consider the motion to dismiss for lack of personal jurisdiction”).
Additionally, as noted below, there is no complex question of state law involved.
Therefore, following Ruhrgas, I FIND the question of personal jurisdiction here to be
straightforward, whereas the issue of subject matter jurisdiction raises difficult and novel questions
of federal procedural law. Consequently, I address personal jurisdiction first. As explained more
fully below, if personal jurisdiction is proper, I will then advance to the fraudulent misjoinder
arguments to decide subject matter jurisdiction. If, however, personal jurisdiction is lacking, then
the out-of-state plaintiffs’ claims must be dismissed, resulting in complete diversity and giving the
court subject matter jurisdiction over the remaining claims: those of the one Texas plaintiff against
the New Jersey defendants.
III.

Personal Jurisdiction
A. Legal Standard
This case has been transferred from the Eastern District of Texas to the Southern District

of West Virginia, MDL 2327. Accordingly, I apply the law of the Fourth Circuit to issues of federal
procedure. See In re Temporomandibular Joint (TMJ) Implants Prods. Liab. Litig., 97 F.3d 1050,
1055 (8th Cir. 1996) (“When analyzing questions of federal law, the transferee court should apply
the law of the circuit in which it is located.” (citation omitted)). The Fourth Circuit has consistently
stated that “[w]hen a district court considers a question of personal jurisdiction . . . , the plaintiff
has the burden of making a prima facie showing in support of its assertion of jurisdiction.”

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The plaintiffs do not argue claims brought by out-of-state plaintiffs are based on specific jurisdiction. (See
Pls.’ Resp. to Defs.’ Mot. to Dismiss [Docket 13]).

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Universal Leather, L.L.C. v. Koro AR, S.A., 773 F.3d 553, 558 (4th Cir. 2014) (citing Consulting
Eng’rs Corp. v. Geometric Ltd., 561 F.3d 273, 276 (4th Cir. 2009)). “In considering whether the
plaintiff has met this burden, the district court ‘must construe all relevant pleading allegations in
the light most favorable to the plaintiff, assume credibility, and draw the most favorable inferences
for the existence of jurisdiction.’” Id. (citing Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989)).
Because a federal court looks to state law when determining whether it may exercise
personal jurisdiction over a litigant, I apply the substantive law of Texas to the issue of personal
jurisdiction. See In re Hydroxycut Mktg. & Sales Practices Litig., 810 F. Supp. 2d 1100, 1106
(S.D. Cal. 2011) (noting “the MDL court applies the law of the transferor forum to determine
personal jurisdiction”); In re Papst Licensing GMBH & Co. KG Litig., 602 F. Supp. 2d 10, 14
(D.D.C. 2009) (same). “[Texas’s] long-arm statute reaches ‘as far as the federal constitutional
requirements for due process will allow.’” Spir Star AG v. Kimich, 310 S.W.3d 868, 872 (Tex.
2010) (quoting Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 806 (Tex. 2002)).
Accordingly, there is no need for further analysis of Texas law, and I consider the “limits imposed
by federal due process.” Daimler AG v. Bauman, 134 S. Ct. 746, 753 (2014) (discussing
application of California’s long-arm statute) (citing Burger King Corp. v. Rudzewicz, 471 U.S.
462, 464 (1985)).
As mentioned above, the due process question here concerns general jurisdiction.
Therefore, I must determine whether the corporate defendants’ contacts with Texas are so
“continuous and systematic” that the defendants may be “fairly regarded as at home” in the state
and thus answerable there for any and all claims. Goodyear Dunlop Tires Operations, S.A. v.
Brown, 131 S. Ct. 2846, 2854 (2011). In a recent case addressing general (or all-purpose)

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jurisdiction, the Supreme Court reiterated the thrust of Goodyear when describing where
corporations are typically “at home”:
[T]he place of incorporation and principal place of business are
paradig[m] . . . bases for general jurisdiction. Those affiliations have the virtue of
being unique—that is, each ordinarily indicates only one place—as well as easily
ascertainable. These bases afford plaintiffs recourse to at least one clear and certain
forum in which a corporate defendant may be sued on any and all claims.
Daimler, 134 S. Ct. at 760 (internal quotation marks and citations omitted). The Court added that
“Goodyear did not hold that a corporation may be subject to general jurisdiction only in a forum
where it is incorporated or has its principal place of business,” Daimler, 134 S. Ct. at 760,
acknowledging corporate defendants can be haled into court outside their home jurisdictions based
on unrelated contacts under the right circumstances.
Specifically, the Court pointed out: “Perkins v. Benguet Consol. Mining Co.[, 342 U.S. 437
(1952),] remains the textbook case of general jurisdiction appropriately exercised over a foreign
corporation that has not consented to suit in the forum.” Daimler, 134 S. Ct. at 755–56 (internal
quotation marks and citation omitted). In Perkins, the “president, who was also the general
manager and principal stockholder of the company,” performed the following activities, among
others, in the forum state: paid employee salaries, maintained an office from which he conducted
company affairs and kept company files, “used and maintained . . . two active bank accounts
carrying substantial balances of company funds,” held directors’ meetings, and supervised
company policy. 342 U.S. at 447–48. Furthermore, “all key business decisions were made in the
[forum] State,” and “[i]n those circumstances, Ohio was the corporation’s principal, if temporary,
place of business so that Ohio jurisdiction was proper even over a cause of action unrelated to the
activities in the State.” Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 780 n.11 (1984)

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(discussing Perkins). With the foregoing principles of general jurisdiction in mind, I turn to the
facts at bar.
B. Discussion
The defendants are both incorporated in New Jersey, and although the defendants
“engage[] in business in Texas,” the plaintiffs concede that neither “maintain[s] a regular place of
business in th[e] state or a designated agent for service of process.” (See Petition ¶¶ 5–6; see also
J&J’s Spec. App. at 4 (asserting New Jersey is principal place of business)). In other words, based
on general jurisdiction, Texas is not a paradigm forum under Goodyear for claims against the two
corporate defendants.
The plaintiffs thus ask the court to recognize an additional basis supporting the exercise of
all-purpose jurisdiction. In suggesting that Perkins provides another “example” of when such
jurisdiction may be appropriate over a corporate defendant whose contacts with the forum are
unrelated to particular claims alleged, the plaintiffs contend the following contacts of the
defendants are so systematic and continuous as to render the defendants at home in Texas: (1) large
sales of products, specifically more sales than in New Jersey; (2) the defendants’ hiring and
training of Texas-based employees, including physicians acting as consultants; (3) marketing of
products; (4) maintenance of company files and equipment; (5) payment of employee salaries; and
(6) maintenance of websites directed to all states, including Texas. (See Pls.’ Resp. to Defs.’ Mot.
to Dismiss [Docket 7], at 2–3).
As an initial matter, Perkins is better understood not as a case in which the Court
recognized an additional basis for general jurisdiction outside the two paradigms, but rather as a
case in which the defendant’s supervisory operations in the forum effectively rendered the forum
the defendant’s principal place of business. See Daimler, 134 S. Ct. at 756 (“We held [in Perkins]

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that the Ohio courts could exercise general jurisdiction over Benguet without offending due
process. That was so, we later noted, because Ohio was the corporation’s principal, if temporary,
place of business.” (emphasis added) (citing Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 780
n.11 (1984) (internal quotation marks omitted))). Accordingly, the plaintiffs’ reliance on Perkins
is misplaced because they cannot plausibly assert Texas is either defendants’ principal place of
business—temporary or permanent—when they concede that neither defendant even maintains a
regular place of business in the state. I will, nonetheless, evaluate the contacts alleged by the
plaintiffs.
Considered in the light most favorable to plaintiffs, no facts alleged here suggest the kind
of corporate activity in Texas that the Supreme Court has found sufficient to confer all-purpose
jurisdiction over a corporate defendant. The plaintiffs have failed to show the alleged injuries of
the out-of-state plaintiffs occurred in Texas, and the argument that the defendants market and sell
large amounts of products in the forum is unavailing for the purposes of general jurisdiction. See
Daimler, 134 U.S. at 762 n.20 (“Nothing in International Shoe and its progeny suggests that a
particular quantum of local activity should give a State authority over a far larger quantum
of . . . activity having no connection to any in-state activity.” (internal quotation marks and citation
omitted)). Likewise, absent some showing of activity typical of corporate headquarters, which the
plaintiffs have not made, the fact that the defendants train and direct employees in the forum fails
to confer general jurisdiction. See id. (“A corporation that operates in many places can scarcely be
deemed at home in all of them. Otherwise, ‘at home’ would be synonymous with ‘doing business’
tests framed before specific jurisdiction evolved in the United States.” (citation omitted)).
Additionally, there is no evidence that either defendant makes any, let alone all, key
business decisions in Texas. See Perkins, 342 U.S. at 448 (describing key business decisions made

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in the forum). Nor has there been a showing that any of the defendants’ executives carry on in
Texas systematic and continuous supervision of company activities. The fact that the defendants’
Texas employees may receive paychecks through direct deposit, (see Pls.’ Resp. to Defs.’ Mot. to
Dismiss [Docket 7], at 3), does not render the defendants “at home” in Texas. Cf. Helicopteros
Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416–17 (1984) (declining to consider where
a check paid by a company is drawn “when determining whether a defendant has sufficient
contacts with a forum State to justify an assertion of jurisdiction”). Relatedly, there is no evidence
that the defendants hold substantial sums of company funds in Texas bank accounts. Finally,
permitting the maintenance of a website accessible in all states to tip the scale in the generaljurisdiction calculus would effectively eviscerate the doctrine: the defendants here and countless
other corporations, large and small, would be subject to all-purpose jurisdiction nationwide. See
GTE New Media Servs. Inc. v. BellSouth Corp., 199 F.3d 1343, 1350 (4th Cir. 2000) (“We do not
believe that the advent of advanced technology, say as with the Internet, should vitiate long-held
and inviolate principles of federal court jurisdiction.”).
In short, neither defendant is incorporated or maintains its principal place of business in
Texas, and I FIND the facts here, construed in the light most favorable to the plaintiffs, do not
meet the high bar for recognizing a new basis for general jurisdiction over corporate defendants.
As the Daimler Court lamented: “Plaintiffs would have us look beyond the exemplar bases
Goodyear identified, and approve the exercise of general jurisdiction in every State in which a
corporation engages in a substantial, continuous, and systematic course of business. That
formulation . . . is unacceptably grasping.” Id. at 761 (internal quotation marks and citation
omitted). Accordingly, I GRANT the defendants’ Motion, and dismiss without prejudice all

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claims brought by the forty-nine non-Texas, out-of-state plaintiffs in this action, which fail for lack
of personal jurisdiction. The plaintiff remaining is Texas resident Denise Bragg.
IV.

Subject Matter Jurisdiction
A. Legal Standard
Regarding subject matter jurisdiction, the diversity statute provides: “[t]he district courts

shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum
or value of $75,000, exclusive of interests and costs, and is between—(1) citizens of different
States; . . . .” 28 U.S.C. § 1332(a). Defendants may remove actions initially filed in state court to
federal court if they satisfy § 1332 and the removal statute’s requirements. See id. § 1446. Under
appropriate circumstances, such as when the prayer for relief in state court does not specify the
amount demanded, “the notice of removal may assert the amount in controversy” for the purposes
of demonstrating federal diversity jurisdiction. Id. § 1446(c)(2)(A).
B. Discussion
Because I have concluded the court lacks personal jurisdiction over the defendants for the
out-of-state plaintiffs’ claims, including claims brought by the New Jersey plaintiff, I have
dismissed them. Accordingly, there is complete diversity between the remaining parties: the Texas
plaintiff and the New Jersey defendants. Per 28 U.S.C. § 1446(c)(2), the defendants have satisfied
the court that the amount-in-controversy requirement is met. (See Notice of Removal [Docket 1]
¶¶ 15–19). Subject matter jurisdiction based on the diversity statute exists, and there is no reason
to transgress the defendants’ right of removal to federal court. Because the court possesses subject
matter jurisdiction, the Plaintiffs’ Motion to Remand to State Court is DENIED.

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C. Other Pending Motions
In light of the court’s dismissal of the out-of-state plaintiffs’ claims, the defendants’ Motion
to Sever is DENIED as moot. Given the transfer of the case to this court by order dated December
14, 2014, the defendants’ Motion to Stay pending transfer is also DENIED as moot.
V.

Conclusion
For the reasons set forth above, the defendants’ Motion to Dismiss [Docket 2] is

GRANTED except as to the one Texas plaintiff, Denise Bragg; the defendants’ Motion to Sever
[Docket 3] is DENIED as moot; and the defendants’ Motion to Stay [Docket 4] is DENIED as
moot. The plaintiffs’ Motion to Remand to State Court [Docket 10] is DENIED.
The court DIRECTS the Clerk to send a copy of this Order to counsel of record and any
unrepresented party.
ENTER: August 17, 2015

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