Kohl v. American Home Products Corp., Civ. 99-3085.

• Decision Date: 29 December 1999
• Docket Number: No. Civ. 99-3085.,Civ. 99-3085.
• Citation: 78 F.Supp.2d 885
• Parties: Patricia A. KOHL, Plaintiff, v. AMERICAN HOME PRODUCTS CORP., Wyeth-Ayerst Laboratories Division of American Home Products Corporation, A.H. Robins Co., Inc., Sims Drug, Inc., and Clinic Pharmacy, Defendants.
• Court: U.S. District Court — Western District of Arkansas

78 F.Supp.2d 885

Patricia A. KOHL, Plaintiff, v. AMERICAN HOME PRODUCTS CORP., Wyeth-Ayerst Laboratories Division of American Home Products Corporation, A.H. Robins Co., Inc., Sims Drug, Inc., and Clinic Pharmacy, Defendants.

No. Civ. 99-3085.

United States District Court, W.D. Arkansas, Harrison Division.

December 29, 1999.

Don R. Elliott, Jr., Bobby Lee Odom, Russell B. Winburn, Jennifer Wheeler Haskins, Odom Elliott & Martin, Fayetteville, AR, George H. Niblock, Niblock Law Firm, Fayetteville, AR, Pamela Talley Parker, Bentonville, AR, for Plaintiff.

Lyn Peeples, Pruitt Mitchell, Williams, Selig, Gates & Woodyward, Little Rock AR, Tim Atkeson, David M. Orta Arnold & Porter, Washington, DC, for American Home & Wyeth.

John E. Moore, Huckabay, Munson, Rowlett & Tilley, Little Rock, AR, for Sims Drug.

Donald H. Bacon, Friday, Eldredge & Clark, Little Rock, AR, for Clinic Pharmacy.

MEMORANDUM OPINION

H. FRANKLIN WATERS, Senior District Judge.

This case is currently before the court on the plaintiff's motion to remand and the defendants' motion to stay.

Background.

Plaintiff filed this action in the Circuit Court of Marion County, Arkansas, on October 8, 1999. The plaintiff, Patricia Ann Kohl, alleges she contracted valvular heart disease, including mitral and tricuspid valve regurgitation and aortic valve disease, as a result of taking diet drugs prescribed by Dr. Stevan VanOre beginning in approximately May of 1996. Specifically, Kohl took the prescription diet drugs Dexfenfluramine and Fenfluramine. Kohl also took the drug Phentermine.

The combination use of these drugs is popularly referred to as the Fen/Phen diet. Defendants American Home Products, Corp. (AHP), Wyeth-Ayerst Laboratories and A.H. Robins (Robins) are pharmaceutical companies who have been regularly engaged in the business of manufacturing, marketing, selling and/or distributing Dexfenfluramine and Fenfluramine. Sims Drug and Clinic Pharmacy are sellers or distributors of Dexfenfluramine and Fenfluramine. The complaint asserts negligence and strict liability causes of action.

On November 16, 1999, defendants removed the case pursuant to 28 U.S.C. §§ 1332 and 1441. In their notice of removal, defendants contend diversity of citizenship exists between the plaintiff and the properly named defendants, AHP, Wyeth-Ayerst, and Robins. They contend Sims Drug and Clinic Pharmacy, both citizens of Arkansas, were fraudulently joined for the purpose of preventing removal of the action from state to federal court.

On December 2, 1999, defendants submitted this case as a potential "tag-along action" to the Judicial Panel on Multi-District Litigation ("JPML"). Defendants seek the transfer of this case to the Eastern District of Pennsylvania for consolidated pretrial proceedings before Senior Judge Bechtle as part of MDL-1203, In re Diet Drugs (Phentermine/Fenfluramine/Dexfenfluramine) Products Liability Litigation. On December 14, 1999, a conditional transfer order was entered by the JPML.

On November 24, 1999, plaintiff filed a motion to remand the case to the Circuit Court of Marion County, Arkansas, on the ground that this court lacks subject matter jurisdiction because diversity of citizenship is lacking. On December 8, 1999, defendants filed a motion to stay the proceedings pending the transfer of the case to multi-district litigation ("MDL"). In case the court denies their request for a stay, defendants also responded to the motion to remand.

Discussion.

I. Motion to Stay.

Defendants request that the court stay all proceedings pending the transfer of this case to MDL. Defendants inform the court that this is one of more than 1400 pending federal cases involving the prescription drugs Phentermine, Fenfluramine, and Dexfenfluramine, and that, since December of 1997, the JPML has been transferring these cases to the consolidated action.

Defendants suggest the stay is dictated by principles of economy and consistency. Defendants contend the JPML has encouraged the transfer of remand motions to the MDL. They point out many transferor district courts have stayed remand motions pending transfer. They contend a post-transfer ruling promotes economy by ensuring that only one federal judge will have to determine jurisdictional issues for hundreds of related cases with related or identical issues. In their view, a post-transfer ruling promotes consistency by ensuring that the jurisdictional and substantive legal issues are interpreted once and applied consistently in all the MDL cases from Arkansas and other jurisdictions.

The court has addressed this same issue in two unpublished opinions. See Baker v. Wyeth-Ayerst Labs. Div., et al., Civil No. 98-5126 (Aug. 6 1998) and Brightwell v. A.H. Robins Co., Inc., et al., Civil No. 99-5061 (June 2, 1999). In those cases, this court recognized that a motion to transfer a case to MDL does not automatically stay discovery, postpone rulings on pending motions, or generally suspend further proceedings in the court in which the action was filed. See Rule 1.5 of the Rules of Procedure of the Judicial Panel on Multidistrict Litigation. See also Tortola Restaurants, L.P. v. Kimberly-Clark Corp., 987 F.Supp. 1186, 1188-89 (N.D.Cal. 1997).

In deciding whether to stay rulings, the court considers, among other things, whether the issues in question are easily capable of arising in multiple cases, whether the issues involve common questions of law and fact which relate to the cases already transferred to MDL, and whether it would serve judicial economy to have the questions resolved by a single court.

In this case, the court believes the best course is to decide the motion to remand because "[j]udicial economy will be best served by addressing the remand issue [as it] will facilitate litigation in the appropriate forum." Tortola, 987 F.Supp. at 1189 (internal quotation marks and citation omitted). The issues raised in the motion to remand turn on an interpretation of state law. As such, uniformity in the handling of the diet drug cases will not be compromised by deciding a unique question wholly dependent on the law of the State of Arkansas. We also note that at least one court has held that it cannot stay proceedings in an action over which it lacks jurisdiction. Lloyd v. Cabell Huntington Hospital, Inc., 58 F.Supp.2d 694, 696 (S.D.W.Va.1999).

While we believe the prudent course is to decide the motion to remand, we agree with defendants that any further proceedings should be stayed given the entry of the conditional order of transfer. Simultaneously with the entry of the order denying the motion to remand, we will grant defendants' motion to stay all further proceedings.

II. Motion to Remand.

Plaintiff contends the removal was improper because complete diversity does not exist. Specifically, she points out that she is a citizen of Arkansas as are two of the named defendants, Sims Drug and Clinic Pharmacy. Defendants assert, however, that the two Arkansas defendants were fraudulently joined.

(a). Right to Removal in General.

A defendant may remove any action over which a federal court could have exercised original jurisdiction. The removal statute provides as follows:

Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant

....

28 U.S.C. § 1441(a). Since this action is predicated on state law, original jurisdiction exists in this court only if there is complete diversity between the plaintiff and defendants and if the amount in controversy exceeds $75,000. 28 U.S.C. § 1332.

In addition to the complete diversity requirement of 28 U.S.C. § 1332, the removal statute further provides that diversity cases "shall be removable only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought." 28 U.S.C. § 1441(b) (emphasis added). It would therefore appear that this action is not removable for two reasons. First, there is a lack of complete diversity between plaintiff and defendants, since plaintiff is a citizen of Arkansas and defendants Sims Drug and Clinic Pharmacy are also citizens of Arkansas. Second, as two defendants are citizens of Arkansas, the state in which the action was brought, § 1441(b) bars removal. However, this initial analysis of the complaint does not end the inquiry, since defendants contend that Sims Drug and Clinic Pharmacy, the defendants whose presence in the case defeats diversity, are not properly named as parties.

(b). General Principles of Fraudulent Joinder.

If the joinder of Sims Drug and Clinic Pharmacy was fraudulent, they will be dismissed and their joinder will not defeat removal. "Joinder designed solely to deprive federal courts of jurisdiction is fraudulent and will not prevent removal." Anderson v. Home Ins. Co., 724 F.2d 82, 84 (8th Cir.1983) (citing Tedder v. F.M.C. Corp., 590 F.2d 115, 117 (5th Cir.1979)). The doctrine of fraudulent joinder is designed to prevent plaintiffs from naming parties of the same citizenship merely to avoid removal of an action to federal court.

A party will be considered fraudulently joined when plaintiff has not stated a claim for relief or does not intend to secure a judgment against the defendant. 14B Charles A. Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure § 3723 at 577 (3d ed.1998). But there need only be a possibility that a right to relief exists under the law to avoid this conclusion, and all ambiguities in state law are to be resolved in favor of plaintiff. Barnes v. Southwestern Bell Telephone Co., 596 F.Supp. 1046 (W.D.Ark.1984).

(c). Applying the Rules to This Case.

As stated above, plaintiff's causes of action are for: (1) negligence; and (2) strict liability. Kohl contends both are valid causes of action against the resident defendants, rendering removal improper....