Kraft v. Johnson & Johnson

• Decision Date: 08 April 2015
• Docket Number: Civil Action No. 2:15–cv–01517.
• Citation: 97 F.Supp.3d 846
• Court: U.S. District Court — Southern District of West Virginia
• Parties: Rose KRAFT, et al., Plaintiffs, v. JOHNSON & JOHNSON, et al., Defendants.

97 F.Supp.3d 846

Rose KRAFT, et al., Plaintiffs

v.JOHNSON & JOHNSON, et al., Defendants.

Civil Action No. 2:15–cv–01517.

United States District Court, S.D. West Virginia.

Signed April 8, 2015.

Julie L. Rhoades, David P. Matthews, Matthews & Associates, Houston, TX, Kevin L. Edwards, Peter De La Cerda, Edwards & De La Cerda, Tamara L. Banno, Tim K. Goss, Freese & Goss, Richard A. Capshaw, Capshaw & Associates, Dallas, TX, for Plaintiffs.

Carol Jean Traylor, J. Frank Kinsel, Jr., Cantey Hanger, Fort Worth, TX, Christy D. Jones, Butler Snow, Ridgeland, MS, David B. Thomas, Thomas Combs & Spann, Charleston, WV, for Defendants.

MEMORANDUM OPINION AND ORDER

(Defendants' Motions to Dismiss, Sever, and Stay, and Plaintiffs' Motion to Remand)

JOSEPH R. GOODWIN, District Judge.

Pending before the court are the defendants' Motion to Dismiss [Docket 3], the defendants' Motion to Sever [Docket 5], the defendants' Motion to Stay [Docket 8], and the plaintiffs' Motion to Remand to State Court [Docket 12]. For the reasons set forth below, the Motion to Dismiss is GRANTED except as to the two Texas plaintiffs, Rose Kraft and Sandra Huss; 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 23,500 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 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-two plaintiffs. Two of them reside in Texas and received their surgeries in Texas. (Id. ¶¶ 3–4). The remaining plaintiffs are out-of-state residents, (id. at Ex. 1), including one plaintiff from New Jersey. (Id. ¶ 5). 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).

The defendants were served on August 26, 2014, (see Register of Actions [Docket 1–1] ), and on September 19, 2014, they each appeared specially to contest personal jurisdiction over the claims alleged by the fifty out-of-state plaintiffs. (See J & J's Spec.App. [Docket # 1–12]; Ethicon's Spec.App. [Docket 1–11] ). The defendants preserved those objections to personal jurisdiction in their respective Answers. (See J & J's Original Answer & Defenses [Docket 1–15]; Ethicon's Original Answer & Defenses [Docket 1–14] ).

The defendants removed this action to the U.S. District Court for the Northern District of Texas on September 25, 2014, asserting the court “has original subject matter 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 to dismiss the claims of the fifty out-of-state plaintiffs for lack of personal jurisdiction, (Mot. to Dismiss [Docket 3] ), and moved to sever all claims brought by the New Jersey plaintiff. (Mot. to Sever [Docket 5] ). On September 26, 2014, the defendants moved to stay all proceedings in the Texas federal court, pending a decision to transfer the case into MDL 2327. (Mot. to Stay [Docket 8] ). On October 15, 2014, the plaintiffs moved to remand the case to state court for lack of subject matter jurisdiction. (Mot. for Remand [Docket 12] ). Finally, on February 5, 2015, the case was transferred into MDL 2327 before this court, (see Transfer Order [Docket 42] ), 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. On the one hand, the defendants argue that the out-of-state plaintiffs' claims, including those alleged by the New Jersey plaintiff who shares residency with the defendants, should be dismissed because a Texas court cannot exercise personal jurisdiction over the defendants on those claims. Dismissing those claims 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. On the other hand, the plaintiffs 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. The plaintiffs urge the court to resolve the subject-matter-jurisdiction inquiry prior to addressing personal jurisdiction.

The defendants cite Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 119 S.Ct. 1563, 143 L.Ed.2d 760 (1999), for the proposition that the court may decide issues of personal jurisdiction before taking up subject matter jurisdiction. Contending the opposite, the plaintiffs rely heavily on Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998), a case Ruhrgas expressly distinguished. 526 U.S. at 583, 119 S.Ct. 1563 (“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, 119 S.Ct. 1563. 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, 119 S.Ct. 1563, 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, 119 S.Ct. 1563 (footnote omitted); see also Pervasive Software Inc. v. Lexware GmbH & Co., 688 F.3d 214, 232 (5th Cir.2012) (same); Lolavar v. de Santibanes, 430 F.3d 221, 227 (4th Cir.2005) (same).

Here, the parties' arguments on subject matter jurisdiction, specifically on 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 (West Group 4th ed. 2009 & Supp.2010–14, Supp.2015 forthcoming) (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 their sister circuits, neither the Fifth nor Fourth Circuit Courts of Appeals has expressly adopted the doctrine. See 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.”); 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 mis joinder and noting the latter is “relatively new and not clearly defined”). In other words, engaging the parties' arguments on procedural or fraudulent misjoinder, and in turn subject matter jurisdiction, may require passage upon shaky jurisdictional...