Anderson v. Merck & Co. Inc., No. Civ.A. 6:05-573-JMH.

• Court: United States District Courts. 6th Circuit. United States District Court of Eastern District of Kentucky
• Writing for the Court: Hood
• Citation: 417 F.Supp.2d 842
• Docket Number: No. Civ.A. 6:05-573-JMH.
• Decision Date: 28 February 2006
• Parties: Jerry ANDERSON, et al., Plaintiffs, v. MERCK & CO. INC., et al., Defendants.

417 F.Supp.2d 842 Jerry ANDERSON, et al., Plaintiffs,
v.
MERCK & CO. INC., et al., Defendants. No. Civ.A. 6:05-573-JMH. United States District Court, E.D. Kentucky, at London. February 28, 2006.

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Alva A. Hollon, Jr., John Oaks Hollon, Sams & Hollon, P.A., Jacksonville, FL, Annette Morgan-White, Yancey L. White,

Morgan & White, Manchester, KY, John H. Kim, The Kim Law Firm, Michael T. Gallagher, Russell Serafin, The Gallagher Law Firm, Houston, TX, for Plaintiffs.

Anna Warnock, Susan J. Pope, Frost Brown Todd LLC, Lexington, KY, Winston E. Miller, Frost Brown Todd LLC, Louisville, KY, for Defendants.

MEMORANDUM OPINION AND ORDER

HOOD, District Judge.

Before the Court are the plaintiffs' motions to amend their complaint [Record No. 17] and to remand [Record No. 19]. Defendants have moved the Court to stay this action pending a transfer decision by the Judicial Panel on Multidistrict Litigation [Record No. 5]. As all motions have been fully briefed, the matters are ripe for review.

I. BACKGROUND

The plaintiffs originally filed this action in Clay County Circuit Court, alleging harm caused by the prescription drug Vioxx. The complaint asserts claims against Merck & Company, Inc., ("Merck"), the manufacturer, marketer, and seller of the drug, and claims against five Merck pharmaceutical sales representatives,¹ W. Clayton Ely, Vishnu Bhandari, Kevin Jones, David Foley, and David Yount (hereafter, collectively "Sales Representatives"), who allegedly marketed the drugs to the plaintiffs' physicians. The complaint alleges negligence, negligent misrepresentation, and violations of the Kentucky Consumer Protection Act against the Sales Representatives. Merck removed the action to this Court, claiming

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that the Court has subject matter jurisdiction based on diversity. See 28 U.S.C. § 1441(a); 28 U.S.C. § 1332(a). Plaintiffs are citizens of Kentucky, Merck is a citizen of New Jersey under 28 U.S.C. § 1332(c)(1), and the amount in controversy exceeds the jurisdictional minimum. Because the Sales Representatives are citizens of Kentucky, Plaintiffs argue, their presence in the suit destroys diversity. Merck contends, however, that the Sales Representatives were fraudulently joined so that Plaintiffs could evade federal jurisdiction.

II. STANDARD OF REVIEW

Although several motions are currently pending, the Court first addresses Plaintiffs' motion to remand.² "A motion questioning subject matter jurisdiction must be considered before other challenges ...." Martin v. Voinovich, 840 F.Supp. 1175, 1185 (S.D.Ohio 1993). As to Plaintiffs' motion to amend their complaint, the Court will not consider the amended complaint in assessing whether the Sales Representatives were fraudulently joined. Pullman Co. v. Jenkins, 305 U.S. 534, 537, 59 S.Ct. 347, 83 L.Ed. 334 (1939); Alexander v. Elec. Data Systems Corp., 13 F.3d 940, 949 (6th Cir.1994); see also Cavallini v. State Farm Mut. Auto Ins. Co., 44 F.3d 256, 264 (5th Cir.1995) (holding that if a court does not limit its review to the complaint as it exists at removal, "disposition of the issue would never be final, but would instead have to be revisited every time the plaintiff sought to amend the complaint to assert a new cause of action against the nondiverse defendant").

A case may only be removed if it could have been originally brought in federal court, and as there is no federal question, jurisdiction is only proper in this case if the parties are completely diverse and the amount in controversy exceeds $75,000. See 28 U.S.C. § 1441(a); 28 U.S.C. § 1332. The party seeking to bring a case into federal court must establish diversity jurisdiction. Coyne, 183 F.3d at 493.

The only issue is whether the Sales Representatives were fraudulently joined.³ The burden is on the defendants to show fraudulent joinder, and as with any dispute over removal, all doubts are to be resolved

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against removal. See Brierly, 184 F.3d at 534; Alexander, 13 F.3d at 949. "To prove fraudulent joinder, the removing party must present sufficient evidence that a plaintiff could not have established a cause of action against non-diverse defendants under state law." Coyne, 183 F.3d at 493.

The Sixth Circuit has held that "if there is a colorable basis for predicting that a plaintiff may recover against non-diverse defendants, th[e] Court must remand the action to state court." Id. Any ambiguities in the relevant state law must be taken in the light most favorable to Plaintiffs. See Alexander, 13 F.3d at 949. Thus, the question before the Court is not whether Plaintiffs will prevail at trial on their claims against the named Sales Representatives or whether the Court believes that the Sales Representatives were joined to defeat diversity. See Jerome—Duncan Inc. v. Auto—By—Tel, L.L.C., 176 F.3d 904, 907 (6th Cir.1999) (holding that a plaintiff's motive in joining a non-diverse defendant is "immaterial to our determination regarding fraudulent joinder"). The question is whether, resolving all ambiguities in favor of Plaintiffs, Merck has shown that there is no colorable basis for predicting that Plaintiffs could prevail against the non-diverse Sales Representatives in state court.

Several courts have noted that the standard for a defendant to show fraudulent joinder is even higher than the standard for succeeding on a motion to dismiss under Federal Rule 12(b)(6). See Little v. Purdue Pharma, L.P., 227 F.Supp.2d 838, 845-46 (S.D.Ohio 2002) (citing Hartley v. CSX Transp., Inc., 187 F.3d 422 (4th Cir. 1999); Batoff v. State Farm Ins. Co., 977 F.2d 848 (3d Cir.1992)). "[T]he benefit of the doubt given a plaintiff as part of the fraudulent joinder inquiry should be more deferential than even that given under Rule 12(b)(6)." Id. at 846.

III. ANALYSIS

Merck argues that Plaintiffs' claims of negligence, negligent misrepresentation, and violations of the Kentucky Consumer Protection Act do not meet the required standard, that is, Plaintiffs have not established colorable claims under state law against the non-diverse defendants. See Coyne, 183 F.3d at 493. To begin this fraudulent joinder inquiry and to assess Plaintiffs' claims, the Court must consider the Kentucky law upon which Plaintiffs' claims rest.

Plaintiffs allege that Defendants, including the Sales Representatives, failed to disclose, inter alia, that Vioxx caused increases in certain medical conditions and that insufficient studies and inadequate testing had been conducted regarding Vioxx's safety, side effects, and adverse effects. Plaintiffs characterize these failures as "misrepresentations ... perpetrated, directly and indirectly, by Defendants and to the detriment of Plaintiffs, foreseeably causing Plaintiffs to suffer medical conditions." (Compl.¶ 27.) Under Count 3, entitled "Negligence Against Defendant Drug Reps," Plaintiffs contend that the Sales Representatives "made misrepresentations to each Plaintiffs' physician [and] knew or should have known, that each physician relied upon the information provided to them in deciding to prescribe Vioxx." (Id. ¶ 37.) Plaintiffs allege negligent misrepresentation against all Defendants. Plaintiffs claim that the Sales Representatives knew or should have known of the risks associated with Vioxx and promoted the drug to each Plaintiff's physician without warning the physicians of the "serious side effects and dangerous risks to the consuming public." (Id. ¶ 41.) Plaintiffs allege that the representations

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and omissions made by the Sales Representatives to Plaintiffs' physicians were material to Plaintiffs and that "Plaintiffs reasonably relied on misrepresentations and omissions of said Defendants and suffered damages." (Id. ¶ 43-44.) Finally, Count 6 alleges violations of the Kentucky Consumer Protection Act, KRS § 367.110.300, against all Defendants.

The foregoing represents a summary of what Plaintiffs included in their complaint; crucial to this Court's inquiry, however, is what is missing from these claims. The issue of whether a plaintiff's claim of negligence or fraud against a sales representative who marketed a drug to that plaintiff's physician sets forth a colorable cause of action is not novel, and several courts, including courts in this District, have addressed it. See, e.g., Catlett v. Wyeth, Inc., 379 F.Supp.2d 1374, 1377 (M.D.Ga.2004); Burns v. Wyeth, Inc., 352 F.Supp.2d 773, 777 (E.D.Ky.2004); In re Rezulin Prods. Liab. Litig., 133 F.Supp.2d 272, 281 (S.D.N.Y.2001); Couch v. Purdue Pharma, L.P., No. 01-370, 2002 WL 32097529 (E.D.Ky. Jan. 31, 2002). On the other hand, the Court notes that it has found no case in which a Kentucky court found a sales representative personally liable for negligence or negligent misrepresentation under a fact scenario similar to the facts alleged in this case.

In their efforts to establish duty, breach of duty, and consequent injury, see Mullins v. Commonwealth Life Ins. Co., 839 S.W.2d 245, 247 (Ky.1992), for their negligence claim against the Sales Representatives, Plaintiffs have...