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Gaby Aranda, et al v. Walgreen Co.

May 23, 2012


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


This is the second time this case has been removed to federal court based upon diversity jurisdiction. The first time it was removed, Judge Gilbert remanded this case back to the St. Clair County circuit court on the basis that complete diversity was lacking because the case contained both New Jersey plaintiffs, i.e., Anthony Marone and Roger Coron, and defendants, i.e., Hoffmann-La Roche Inc. and Roche-Laboratories Inc. See Doc. 17, 11-cv-00654-JPG-DGW. That impediment to the Court's jurisdiction is no longer here as plaintiffs have voluntarily dismissed Marone's causes of action and have shown that Coron was a citizen of New York, not New Jersey. Rather, this time around, the Court must decide whether defendant Walgreen Co., d/b/a Walgreens, an Illinois citizen (there are four plaintiffs who are alleged to be Illinois citizens*fn1 ), prohibits this Court from having jurisdiction over this matter. Based upon the Seventh Circuit's decision in Walton v. Bayer Corp., 643 F.3d 994 (7th Cir. 2011), the Court finds that the state of plaintiffs' complaint at the time of removal clearly fails to allege what is necessary against the pharmaceutical retailer and so the claims against Walgreens must be dismissed, thereby removing any barrier to the Court's jurisdiction. Thus, plaintiffs motion to remand (Doc. 9) is denied.

I. Background

On June 24, 2011, numerous (seventy-one) plaintiffs filed suit against defendants Wagreens, Hoffmann-La Roche Inc., Roche Laboratories Inc., F. Hoffmann-La Roche Ltd., and Roche Holding Ltd. for personal injuries they suffered after being exposed to the pharmaceutical drug Accutane, which is alleged to have been manufactured by defendants Hoffmann-La Roche Inc. and Roche Laboratories, Inc., and sold by defendant Walgreens. On July 29, 2011, defendants Hoffmann-La Roche Inc. and Roche Laboratories Inc. (collectively the answering defendants or defendants) filed a notice of removal (Doc. 3), removing the case from St. Clair County circuit court to this Court on the basis of diversity jurisdiction. Doc. 3, 11-cv-654-JPG-DGW. In the notice of removal, defendants alleged that plaintiffs' complaint fraudulently joined defendant Walgreens and fraudulently brought claims on behalf of two New Jersey citizens in order to defeat diversity jurisdiction. Thus, defendants argued that because of the fraudulent joinder and misjoinder of non-resident plaintiffs, the Court had jurisdiction. On August 25, 2011, the Court, via Judge Gilbert, issue a memorandum and order, remanding this case to state court on the basis that there were New Jersey plaintiffs and defendants. See Doc. 17, 11-cv-654-JPG-DGW. At the time Judge Gilbert issued his remand order, the case was pending transfer for consolidated multidistrict proceedings in In re Accutane Products Liability Litigation, MDL No. 1626.

On April 27, 2012, defendants Hoffmann-La Roche Inc. and Roche Laboratories Inc. filed another notice of removal (Doc. 2)*fn2 in this Court, noting that since the case was remanded to state court, plaintiffs have dropped the claims of the New Jersey citizen Marone, and that the deposition testimony of plaintiff Coron established that he was a resident of New York,*fn3 thereby nullifying the district court's prior basis for finding complete diversity lacking. Defendants still contend that defendant Walgreens was fraudulently joined. That same day, defendants filed a notice of potential tag-along with the United States Judicial Panel on Multidistrict Litigation (the Panel), and on May 2, 2012, the Panel issued a Conditional Transfer Order (CTO). On May 7, 2012, plaintiffs filed with the Panel their opposition to the CTO and moved to vacate the CTO because the federal court lacked subject matter jurisdiction. Defendants responses are due May 29, 2012.

On May 9, 2012, plaintiffs filed a motion to remand (Doc. 9), a memorandum in support thereof (Doc. 10), and a motion to expedite briefing (Doc. 11) so that plaintiff's motion to remand would be ripe for decision prior to the Panel's May 29, 2012, briefing deadline related to the CTO. On May 11, 2012, the Court granted plaintiffs motion to expedite briefing (Doc. 14), and ordered defendants to file their responses by May 18, 2012. On May 18, 2012, defendants filed their response (Doc. 14), and May 21, 2012, plaintiffs filed a reply to that response (Doc. 15). For the reasons that follow, the Court denies plaintiffs' motion to remand (Doc. 9).

II. Analysis

In plaintiffs' motion to remand, plaintiffs contend that this case should be remanded back to state court for lack of subject matter jurisdiction "because (1) complete diversity of citizenship is lacking because four [p]laintiffs and [d]efendant Walgreens are citizens of Illinois and (2) [p]laintiffs' claims against Walgreens are recognized as meritorious under prevailing Illinois law, and therefore, Walgreens was not fraudulently joined in this action."*fn4 Defendants contend, on the other hand, that Walgreens has been fraudulently joined, and that plaintiffs' tactic of naming a non-diverse pharmacy in a failure to warn lawsuit against a pharmaceutical company constitutes fraudulent joinder under Walton. Defendants also contend that due to the troubling conduct of plaintiffs' counsel in alleging New Jersey citizenship, when in fact there were no New Jersey plaintiffs, defendants should be awarded the fees and costs it has incurred in this second removal. Plaintiffs posit that there is no basis for awarding fees and costs to defendants.

It is well known that removal is proper over any action that could have been filed originally in federal court. 28 U.S.C. § 1441; Tylka v. Gerber Products Co., 211 F.3d 445, 448 (7th Cir. 2000). The removal statute, 28 U.S.C. § 1441, is construed narrowly and doubts concerning removal are resolved in favor of remand. Doe v. Allied-Signal, Inc., 985 F.2d 908, 911 (7th Cir. 1993). Defendant bears the burden to present evidence of federal jurisdiction once the existence of that jurisdiction is fairly cast into doubt. See In re Brand Name Prescription Drugs Antitrust Litig., 123 F.3d 599, 607 (7th Cir. 1997).

This case was removed here on the basis of diversity jurisdiction. "For good or ill, Congress has authorized the removal of cases in which the parties are of diverse citizenship and the states exceed $75,000." Benson v. SI Handling Sys., Inc., 188 F.3d 780, 783 (7th Cir. 1999). "When either side to such a suit prefers the federal forum, that preference prevails." Id.

The statute regarding diversity jurisdiction, 28 U.S.C. § 1332, requires complete diversity between parties plus an amount in controversy exceeding $75,000, exclusive of interest and costs.*fn5 Complete diversity means that "none of the parties on either side of the litigation may be a citizen of the state of which a party on the other side is a citizen." Howell v. Tribune Entm't Co., 106 F.3d 215, 217 (7th Cir. 1997) (citations omitted).

"A plaintiff typically may choose its own forum, but it may not join a nondiverse defendant simply to destroy diversity jurisdiction." Schur v. L.A. Weight Loss Ctrs., Inc., 577 F.3d 752, 763 (7th Cir. 2009) (citing Schwartz v. State Farm Mut. Auto. Ins. Co., 174 F.3d 875, 878 (7th Cir. 1999)). "The 'fraudulent joinder' doctrine, therefore, permits a district court considering removal 'to disregard, for jurisdictional purposes, the citizenship of certain nondiverse defendants, assume jurisdiction over a case, dismiss the nondiverse defendants, and thereby retain jurisdiction.'" Schur, 577 F.3d at 763 (quoting Mayes v. Rapoport, 198 F.3d 457, 462 (4th Cir. 1999)).

"As many courts have noted, the term 'fraudulent joinder' is a bit of a misnomer--the doctrine requires neither fraud nor joinder." Schur, 577 F.3d at 763 n. 9. "Actual fraud in alleging jurisdictional facts will suffice to invoke the doctrine, but the more typical ground is that a plaintiff brought a claim against a nondiverse defendant 'that simply has no chance of success, whatever the plaintiff's motives.'" Id. (quoting Poulos v. Naas Foods, Inc., 959 F.2d 69, 73 (7th Cir. 1992)). "And 'joinder' is also misleading because it is irrelevant whether a nondiverse defendant was actually 'joined' or simply named in the original complaint before the state court." Schur, 577 F.3d at 763 n. 9 (citing Mayes, 198 F.3d at 461 n. 8).

"Fraudulent joinder is difficult to establish--a defendant must demonstrate that, 'after resolving all issues of fact and law in favor of the plaintiff, the plaintiff cannot establish a cause of action against the in-state defendant.'" Schur, 577 F.3d at 764 (quoting Poulos, 959 F.2d at 73). "Framed a different way, the district court must ask whether there is 'any reasonable possibility' that the plaintiff could prevail against the non-diverse defendant." Schur, 577 F.3d at 764 (quoting Poulos, 959 F.2d at 73). "A defendant faces a 'heavy burden' to demonstrate that the joinder is fraudulent, [citation], and some courts, including district courts within this circuit, have suggested that the burden is even more favorable to the plaintiff than the standard that applies to a motion to dismiss under Federal Rule of Civil ...

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