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Livingston v. Hoffmann-La Roche

August 6, 2009

STEPHEN LIVINGSTON, PLAINTIFF,
v.
HOFFMANN-LA ROCHE, INC., ROCHE LABORATORIES, INC., F. HOFFMANN-LA ROCHE, LTD., ROCHE HOLDING AG, ROCHE HOLDING, LTD., F. HOFFMAN-LAROCHE, INC., DAVID SHANKER, M.D., DERMATOLOGY CHICAGO D/B/A DERMATOLOGY CSI, LAKESHORE SURGICAL ASSOCIATES, LTD., CARDINAL HEALTH FRANCE 404, CARDINAL HEALTH PACKAGING SERVICES, MYLAN BERTEK PHARMACEUTICALS, INC., BARR LABORATORIES, INC., DEFENDANTS.



The opinion of the court was delivered by: Marvin E. Aspen, District Judge

MEMORANDUM ORDER AND OPINION

This matter is before us on a motion for remand to state court for lack of subject matter jurisdiction filed by the Plaintiff, Stephen Livingston, and a motion to stay the proceedings pending transfer by the Judicial Panel on Multidistrict Litigation ("JPML") filed by Defendants Hoffman-La Roche Inc. and Roche Laboratories Inc. (collectively, the "Pharmaceutical Defendants"). In this action, originally filed in the Circuit Court of Cook County, Illinois on April 15, 2009, Livingston alleges that he suffered personal injuries as a result of using Isotretinoin, a medication used for the treatment of acne, under the names of Accutane, Amnesteem, and Claravis. (See, e.g., Compl. at 3-4, 11, 16.)

Livingston asserts claims for strict liability and negligence against the various Pharmaceutical Defendants (Compl. at 1-20) and medical negligence against his physician, Dr. Shanker, and his physician's employers, Dermatology CSI d/b/a Dermatology Chicago ("Dermatology Chicago") and Lakeshore Surgical Associates, LTD ("Lakeshore Surgical"). (Compl. at 21-23.). On April 29, 2009, the Pharmaceutical Defendants removed this case to federal court pursuant to 28 U.S.C. §§ 1332 and 1441, asserting federal subject matter jurisdiction on the basis of diversity of citizenship. (Not. of Rem. ¶ 3.) Believing that this action asserts claims that are similar to those at issue in MDL No. 1626, pending in the United States District Court for the Middle District of Florida, on April 20, 2009, the Pharmaceutical Defendants filed a Supplemental Notice of Related Action with the JPML, identifying this case as a potential "tag along act" to MDL No. 1626. (Def. Mem. at 3.) On May 19, 2009, the JPML issued a Conditional Transfer Order ("CTO") of this action. (Id., Ex. B.) However, the order is not effective until it is filed in the Office of the Clerk of the United States District Court for the Middle District of Florida, and the filing of such an order is stayed if a party files a notice of opposition with the Clerk of the JPML. (See id., Ex. B.) Livingston has filed an opposition to the CTO (see Not. of Hearing Session, June 18, 2009, available at http://www.jpml.uscourts. gov/Hearing_Info/Hearing_Order7-30-09.pdf), thereby staying the transmission of the CTO to the Middle District of Florida.

Livingston filed a motion to remand this action to state court on May 22, 2009, arguing that there is not complete diversity of citizenship. (Pl. Mot. ¶ 3.) Thereafter, the Pharmaceutical Defendants filed a motion to stay all proceedings, including the motion to remand. (Def. Mem. at 1.) For the following reasons, we grant Livingston's motion to remand and deny the Pharmaceutical Defendants' motion to stay.

DISCUSSION

As an initial matter, we must decide which motion to address first. Although the JPML has issued a CTO, we retain full jurisdiction over this case until such time as the JPML files a transfer order in the Office of the Clerk of the Middle District of Florida. See Ill. Mun. Ret. Fund v. Citigroup, Inc., 391 F.3d 844, 850-51 (7th Cir. 2004) (affirming the district court's remand of a case after the JPML issued a CTO, but before transmittal of the final order to the clerk of the transferee district and explaining that "[t]he pendency of a conditional transfer order 'does not affect or suspend orders and pretrial proceedings in the district court in which the action is pending and does not in any way limit the pretrial jurisdiction of that court.'") (quoting JPML Rule 1.5); Terkel v. AT&T, Inc., No. 06 C 2837, 2006 WL 1663456, at *1 (N.D. Ill. June 9, 2006); Rutherford v. Merck & Co., 428 F. Supp. 2d 842, 845 (S.D. Ill. 2006). Accordingly, we have the discretion to grant a remand before deciding the motion to stay, even though the JPML has issued a CTO. Rutherford, 428 F. Supp. 2d at 845.

In addressing this issue, other district courts within the Seventh Circuit have adopted a three-step method to determine whether to address a motion to stay pending the JPML's decision to transfer before deciding a motion to remand. See Rutherford, 428 F. Supp. 2d at 845-46; Meyers v. Bayer AG, 143 F. Supp. 2d 1044, 1049 (E.D. Wis. 2001); see also Bd. of Trs. of the Teachers' Ret. Sys. of the State of Ill. v. WorldCom, Inc., 244 F. Supp. 2d 900, 902-03 (N.D. Ill. 2006) (explaining that the three steps are inherent in the analysis of a motion to stay). First, we should "make a preliminary assessment of the jurisdictional issue." Meyers, 143 F. Supp. 2d at 1048; Rutherford, 428 F. Supp. 2d at 846. If, upon such a preliminary assessment, we think that removal to federal court was improper, we "should promptly complete [our] consideration and remand the case to state court." Meyers, 143 F. Supp. 2d at 1049. "If, on the other hand, the jurisdictional issue appears factually or legally difficult, the court's second step should be to determine whether identical or similar jurisdictional issues have been raised in other cases that have been or may be transferred to the MDL proceeding." Id.; see also WorldCom, 244 F. Supp. 2d at 903. Finally, "[o]nly if the jurisdictional issue is both difficult and similar or identical to those in cases transferred or likely to be transferred should the court proceed to the third step and consider the motion to stay." Meyers, 143 F. Supp. 2d at 1049; see also WorldCom, 244 F. Supp. 2d at 903.

Although the jurisdictional issues raised by the Pharmaceutical Defendants are somewhat difficult, they are not similar to issues presented by other cases in or likely to be a part of the MDL. The Pharmaceutical Defendants argue that the issues are similar to those presented in other cases in the MDL, citing to a case already decided by the MDL court, Shellhammer v. Roche Labs. Inc., No. 07 C 2365, 2008 WL 2782689 (M.D. Fla. July 16, 2008) (rejecting defendants' assertion that fraudulent joinder warranted severing the claims against the non-diverse defendants). However, not only are the issues in Shellhammer distinct from those raised here, but the court's decision involved an examination of the individual facts of that case and the applicable state law. Id. at *3 (explaining that fraudulent joinder requires an analysis of the individual allegations made and whether they state a claim under the applicable state law). The MDL court did not issue a global decision regarding motions to remand in the Shellhammer decision; it decided the issues for that specific case. Similarly, if we declined to address the motion to remand in this case, the MDL court would have to conduct the same case-by-case analysis as we would. See, e.g., Copeland v. Eli Lily & Co., No. 05 C 4318, 2005 WL 3533394, at *2 (W.D. Mo. Dec. 22, 2005). The Pharmaceutical Defendants' argument that the issue is better to be resolved by a single MDL court "overlooks the fact that fraudulent joinder analysis . . . depends largely on whether the forum state would sustain a cause of action against the allegedly fraudulently joined defendant." Id. Therefore, "there could be no single resolution of the fraudulent joinder issue by the MDL court since that court would be required to look at the separate law of each state from which one of its cases was transferred." Id. (further explaining that "[f]ar from fostering judicial economy, consolidation of motions to remand in the MDL court would require the [MDL court] to consider not only the malpractice law of several states, but also the current law on fraudulent joinder from the several Circuit Courts of Appeals"). After fully considering all jurisdictional issues, we are not convinced that this case presents issues similar enough to other cases in the MDL to justify deciding the motion to stay before the motion to remand.

I. Motion to Remand

Defendants can remove cases filed in state court to federal court pursuant to 28 U.S.C. § 1441(a) when 1) the plaintiff properly commenced the action in state court and 2) the federal court has original jurisdiction. See Nuclear Eng'g Co. v. Scott, 660 F.2d 241, 248 (7th Cir. 1981). A federal court has original jurisdiction where diversity of citizenship exists among all parties and the amount in controversy exceeds $75,000. 28 U.S.C. § 1332(a)(1). "The defendant bears the burden of establishing removability, and all doubts about federal jurisdiction are resolved in favor of remand to state court." Peirick v. Hooters of Am., No. 05 C 4391, 2005 WL 2171184, at *1 (N.D. Ill. Aug. 31, 2005); see also Wilson v. The Master's Miracle, Inc., 06 C 6590, 2006 WL 163020, at *1 (N.D. Ill. Jan. 19, 2006) ("[A]ll doubts about federal jurisdiction are resolved in favor of remand to state court.") (quotations omitted); Boyd v. Phoenix Funding Corp., 366 F.3d 524, 549 (7th Cir. 2004) ("[T]he party seeking to invoke federal jurisdiction . . . bears the burden of demonstrating that removal is proper.").

Livingston asserts that there is not complete diversity of citizenship because he is an Illinois plaintiff and Dr. Shanker, Dermatology CSI, and Lakeshore Surgical ("forum Defendants") are Illinois defendants. (Mot. ¶ 3.) In response to Livingston's motion, the Pharmaceutical Defendants argue (1) that Livingston is actually a citizen of Ohio; (2) that he fraudulently joined the forum defendants; and (3) that we should sever the Illinois Pharmaceutical Defendants from the case because they are dispensable parties or because they were fraudulently misjoined. We address the arguments in turn.

A. Livingston's Citizenship

Diversity of citizenship is determined at the time the lawsuit was filed. Johnson v. Wattenbarger, 361 F.3d 991, 993 (7th Cir. 2004) ("Whether § 1332 supplies subject-matter jurisdiction must be ascertained at the outset."); Denlinger v. Brennan, 87 F.3d 214, 216 (7th Cir. 1996). We "may properly look beyond the jurisdictional allegations of the complaint . . . to determine whether in fact subject matter jurisdiction exists." Grafon Corp. v. Hausermann, 602 F.2d 781, 783 (7th Cir. 1979); see also United Transp. Union v. Gateway W. Ry. Co., 78 F.3d 1208, 1210 (7th Cir. 1996). To determine an individual's citizenship for diversity purposes, we look to the state of the individual's domicile, which is based on where he is present and intends to stay. Dakuras v. Edwards, 312 F.3d 256, 258 (7th Cir. 2002); Galva Foundry Co. v. Heiden, 924 F.2d 729, 730 (7th Cir. 1991). When a person's domicile is unclear, we can consider the location of his residence, family, and personal belongings; and where he exercises his political rights, conducts his business and financial transactions, pays taxes, and has his driver's license. See, e.g., Pedersen v. Chi. Transit Auth., No. 96 C 1588, 1996 WL 328039, at *1 (N.D. Ill. June 11, 1996); Abboud v. Nw. Home Servs., Inc., No. 90 C 141, 1990 WL 93345, at *2 (N.D. Ill. June 20, 1990); see also McKnight v. Intercontinental Hotels Group PLC, No. 06 C 2546, 2006 WL 2868905, at *2 (N.D. Ill. Oct. 3, 2006) ("[I]n determining a natural party's domicile, the court analyzes the totality of the circumstances, looking at factors such as current physical residence, place of employment, location of real property, voter registration, driver's license registration, and tax payments.").

Although Livingston has not stated under oath that he intends to remain in Illinois (see Def. Opp'n at 5; Def. Mem. at 6), the factors indicate that Livingston is a citizen of Illinois for diversity purposes. See McKnight, 2006 WL 2868905, at *2 (holding that the plaintiff's conduct established his intent to make his domicile Nicaragua, despite the fact that he never stated he intended to remain in Nicaragua and actually stated that he might return to Illinois some day). Livingston has lived in Illinois since 2006 and purchased a condominium in Chicago in October 2008. (Pl. Mem. ¶ 5.) He has been employed by William Blair & Company, located in Chicago since June 2006. (Id. ¶ 6.) Additionally, Livingston is registered to vote in Illinois, has an Illinois driver's license, and filed taxes in Illinois in 2008, the year before he filed this suit. (Id. ¶¶ 7-9.) In response, the Pharmaceutical Defendants submitted evidence demonstrating Livingston's ties to Ohio: he has had several addresses in Ohio, has been employed in Ohio, attended the Ohio State University, owns a car that is registered in Ohio, has registered to vote in Ohio, has had two Ohio driver's licenses, and has opened telephone accounts with Ohio addresses. (Def. Resp. at 6, Ex. J.) We find this evidence unpersuasive. First, Livingston does not deny that he lived in Ohio, where he attended college. (Pl. Reply at 4.) The evidence submitted by the Pharmaceutical Defendants is consistent with that fact. Furthermore, nothing in those facts demonstrates that he intends to return to or remain in Ohio. To support its argument, Pharmaceutical Defendants cite Galva Foundry Co., a case in which the Seventh Circuit concluded that the defendant was actually domiciled in Illinois despite the fact that he had moved to Florida, registered to vote in Florida, received a Florida driver's license, and listed his Florida address as his permanent address on his income tax returns. 924 F.2d at 730. The Seventh Circuit explained that the defendant's "center of gravity" remained ...


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