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In re Yasmin and Yaz Marketing

May 14, 2010


The opinion of the court was delivered by: Herndon, Chief Judge

MDL No. 2100



Plaintiff brought this action in the California Superior Court, Riverside County for damages related to a myocardial infarction allegedly caused by the drug marketed as Yaz (3:10-cv-20095 Doc. 1 ¶ 30). The Defendants named in Plaintiff's complaint include, Bayer Corporation, Bayer Healthcare LLC, Bayer Pharmaceuticals Corporation, Bayer Healthcare Pharmaceuticals Inc., Berlex Laboratories Inc., Berlex Inc., Bayer Schering Pharma AG, Bayer AG (collectively, "the Bayer Defendants"), and McKesson Corporation. Both Plaintiff and McKesson are citizens of California. (3:10-cv-20095 Doc. 1 ¶¶ 2, 22). No Bayer Defendant is a citizen of California. (3:10-cv-20095 Doc. 1 ¶¶ 7, 9, 11, 13, 15, 16, 18, 20).

The action was removed on diversity grounds to the Central District of California on November 4, 2009 (3:10-cv-20095 Doc. 1). Thereafter, the Bayer Defendants filed with the Judicial Panel on Multidistrict Litigation ("JPML") a notice identifying this action as a potential "tag-along" action to these consolidated proceedings. (3:10-cv-20095 Doc. 13 p. 1). On February 5, 2010 the JPML issued an order transferring the action to the Southern District of Illinois for inclusion in this multidistrict litigation. (3:10-cv-20095 Doc. 36).

Now before the Court, is Plaintiff's motion to remand to state court (3:10-cv-20095 Doc. 45). Plaintiff contends that diversity jurisdiction does not exist because both Plaintiff and McKesson are California citizens. Id. at 2.The Bayer Defendants have responded in opposition, arguing that McKesson's citizenship should be disregarded for diversity purposes because McKesson was fraudulently joined. (3:10-cv-20095 Doc. 49).

The gravamen of the Complaint is that the Bayer Defendants made false representations and concealed material facts concerning the safety and efficacy of YAZ/Yasmin from Plaintiff, the public, and the medical community. (3:10-cv-20095 Doc. 1¶¶ 31, 60-61, 64, 66-70, 88-89, 93, 100-101, 103, 108, 112-114, 118-120, 126, 135, 146. Each Count of the Complaint is directed against "Defendants" generally.

McKesson is a wholesale distributor of prescription medications that purchases YAZ/Yasmin and sells it to retail pharmacies (3:10-cv-20095 Doc. 49-1 ¶ 5). The Complaint identifies McKesson as one of the "Defendants" (3:10-cv-20095 Doc. 1 ¶ 25) and asserts that McKesson is a corporation "engaged in the business of researching, designing, developing, licensing, compounding, testing, producing, manufacturing, assembling, processing, packaging, inspecting, labeling, selling and/or warranting [YAZ/Yazmin] in the State of California." Id. ¶ 23.

The Bayer Defendants contend that Plaintiff's remand motion should be denied because: 1) There is no reasonable possibility that McKesson, a wholesale distributor of prescription medications, could be held liable under California law; and 2) even if a claim could stand against McKesson, the Complaint fails to plead sufficient facts against McKesson. (3:10-cv-20095 Doc. 49, p. 2). The parties also raise arguments regarding the procedural propriety of the removal. (3:10-cv-20095 Doc. 45 p. 14; 3:10-cv-20095 Doc. 49 p. 15). For the reasons stated herein the Motion to Remand (3:10-cv-20095 Doc. 45) is DENIED.


A. Legal Standard

1. Controlling Law

In the instant case, in determining whether Plaintiff has stated a cognizable cause of action, California substantive law governs. See Chang v. Baxter Healthcare Corp., 599 F.3d 728, 732 (7th Cir. 2010) (When a diversity case is transferred from one federal district to another, the substantive law applied is that of the jurisdiction from which the case was transferred); International Marketing, Ltd. v. Archer-Daniels-Midland Company, Inc., 192 F.3d 724, 729 (7th Cir. 1999) (the transfer of a diversity case in from one federal district court to another leaves the law "unaffected"). In determining whether Plaintiff has sufficiently pled a cause of action under California law, however, federal pleading standards govern. See Hanna v. Plumer, 380 U.S. 460, 465, 85 S.Ct. 1136 (1965) (federal courts evaluate, even a removed complaint, using federal notice pleading standards because pleading standards are procedural); Grivas v. Parmelee Transp. Co., 207 F.2d 334, 337 (7th Cir. 1953) (a case removed from state court to federal court becomes, "when it arrive[s] there, . ...

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