Burns v. Wyeth, Inc.

• Citation: 352 F.Supp.2d 773
• Decision Date: 10 November 2004
• Docket Number: No. 04-CV-87-HRW.,04-CV-87-HRW.
• Parties: Pamela BURNS, et al., Plaintiffs, v. WYETH, INC., et al., Defendants.
• Court: U.S. District Court — Eastern District of Kentucky

Page 773

352 F.Supp.2d 773

Pamela BURNS, et al., Plaintiffs, v. WYETH, INC., et al., Defendants.

No. 04-CV-87-HRW.

United States District Court, E.D. Kentucky, Ashland.

November 10, 2004.

Ronald E. Johnson, Jr., Louisville, KY, for Plaintiffs.

David T. Schaefer, Richard H.C. Clay, Woodward, Hobson & Fulton, Louisville, KY, for Defendants.

MEMORANDUM OPINION AND ORDER

WILHOIT, District Judge.

This matter is before the Court upon the Plaintiffs' Motion to Remand [Record Nos. 2 and 4]. The Court, having reviewed the record, and being otherwise sufficiently advised, hereby OVERRULES the Plaintiffs' Motion to Remand.

On April 19, 2004, the Plaintiffs filed suit in Boyd County, Kentucky, Circuit Court. In their Complaint, the Plaintiffs allege they developed valvular heart disease (VHD) from taking the diet drugs Pondimin (fenfluramine), Redux (dexfefluramine) and/or phentermine, a combination of which is commonly known as Fen-Phen. On May 28, 2004, the Defendants filed their Notice of Removal pursuant to 28 U.S.C. § 1332.

On September 7, 2004, Plaintiffs filed a Memorandum in Support of Remand [Record No. 2]. However, their Motion for Remand was not filed until October 1, 2004 [Record No. 4]. In the interim, on September 21, 2004, the Defendants filed their Response to the Plaintiffs' Motion to Remand [Record No. 3].

In the Motion for Remand, the Plaintiffs argue that this Court lacks the proper jurisdiction under 28 U.S.C. § 1332. Section 1332 provides that this Court has original jurisdiction of all civil actions in which the matter in controversy exceeds $75,000, and is between citizens of different states. The Plaintiffs concede that their claims exceed the $75,000 statutory minimum.

The Plaintiffs are citizens of Kentucky, Ohio, and Indiana. The Defendants include Wyeth and its subsidiaries, Wyeth drug sales representatives Michael Topalian, Blake Alan Goodwin, Constance S. Grigsby, Scott J. Franklin, and Cynthia M. Cowgill-Salamanca, and Dr. W. Rex Duff, and his medical practice, Bariatrics of KY, P.S.C. Defendant Wyeth and its subsidiaries are out of state entities located in Delaware, New Jersey, and Pennsylvania. Blake Alan Goodwin is a resident of Indiana. Constance Grigsby is a resident of Texas. Michael Topalian is a resident of Ohio.

The Wyeth Defendants, and Defendants Goodwin, Grigsby, and Topalian satisfy diversity requirements. However, Scott J. Franklin, Cynthia M. Cowgill-Salamanca, and Dr. W. Rex Duff and Bariatrics of KY, P.S.C. are residents of Kentucky. Their presence would seemingly destroys diversity jurisdiction.

Section 1441 of 28 U.S.C. permits defendants in civil actions the right to remove cases from state courts to this Court when it would have original jurisdiction. In order to remove a case, there must be complete diversity of citizenship both when the case was commenced and at the time of the filing of notice of removal. Jerome-Duncan, Inc. v. Auto-By-Tel, LLC, 176 F.3d 904, 907 (6th Cir.1999). "When a non-diverse party has been joined as a defendant, then in the absence of a substantial federal question the removing defendant may avoid remand only by demonstrating that the non-diverse party was fraudulently joined." Id. The removing party bears the burden of proving fraudulent joinder. Alexander v. Electronic Data Systems Corp., 13 F.3d 940, 948-949 (6th Cir.1994).

Despite the apparent lack of complete diversity of parties, the Defendants nonetheless maintain this Court may exercise jurisdiction. The Defendants allege that Dr. Duff, his practice Bariatrics of KY, and Wyeth drug sales reps Franklin and Salamanca were fraudulently joined by the Plaintiffs to destroy diversity.

In Coyne v. American Tobacco Company, 183 F.3d 488 (6th Cir.1999), the Sixth Circuit Court of Appeals discussed the standard for proving fraudulent joinder:

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. See Alexander, at 949. However, if there is a colorable basis for predicting that a plaintiff may recover against non-diverse defendants, this Court must remand the action to state court. The district court must resolve "all disputed questions of fact and ambiguities in the controlling ... state law in favor of the non-removing party." Id. All doubts as to the propriety of removal are resolved in favor of remand. See Id. Coyne, at 493.

As the removing party, Defendant Wyeth bears the burden of proving that the Plaintiffs cannot establish a cause of action against Defendants Franklin and Salamanca under Kentucky law.

In their Motion for Remand, the Plaintiffs do not address the question of whether Dr. Duff and his medical practice were fraudulently joined. It appears that they concede this point. As the Defendants note, the Court has recently addressed this question in a similar Wyeth case, Adkins, et al., v. Duff, et al., 04-cv-103-HRW.

In a Memorandum Opinion and Order issued on August 31, 2004, the Court found that Dr. Duff had been fraudulently joined because the plaintiffs had no possibility of success against Dr. Duff since the applicable statute of limitations for medical negligence had lapsed. While not specifically addressed by the Court in Adkins, the Court stated in a footnote that Dr. Duff and his medical practice were the same for all practical purposes since he was the sole owner/shareholder, officer, and employee.

Instead of focusing on Dr. Duff in their Motion for Remand, the Plaintiffs argue the Wyeth drug sales representatives, also known as "detail representatives," were not fraudulently joined. The Plaintiffs assert it is the duty of the Court to determine "whether the plaintiffs might have a valid cause of action against the detail representatives under Kentucky law, and the burden remains on the defendants to show the allegations of the complaint state no probable cause of action." (Plaintiffs' Motion, p. 4-5).

The Plaintiffs contend the detail representatives committed negligence and fraud by "misrepresenting the testing, safety, and effectiveness of [the] diet drugs Pondimin and Redux," to doctors, including Dr. Duff, who then relied on these representations, and prescribed the drugs to the Plaintiffs (Plaintiffs' Motion, p. 1, 6, and generally Plaintiffs' Complaint, Paragraphs 174-180).

The Supreme Court of Kentucky stated in United Parcel Service Company v. Rickert, 996 S.W.2d 464, 468 (Ky.1999):

In a Kentucky action for fraud, the party claiming harm must establish six elements of fraud by clear and convincing evidence as follows: a) material misrepresentation b) which is false c) known to be false or made recklessly d) made with inducement to be acted upon e) acted in reliance thereon f) causing injury.

"Fraud may be committed either [by] intentionally asserting false information or by willfully failing to disclose the truth." Id at 469. The circumstances constituting fraud must be plead with particularity. Kentucky Rule of Civil Procedure 9.02 and Fed.R.Civ.P. 9(b).

The Plaintiffs contend Defendants Franklin and Salamanca visited prescribing physicians, including Dr. Duff, and provided "the prescribing physician Redux Starter Kits," and encouraged "the physician to prescribe Fen-Phen as a really good way to lose weight," instead of discouraging the off label use of the Diet Drugs. (Plaintiffs' Complaint, Paragraphs 102, 104-105). The Plaintiffs also allege the detail representatives "represented Redux was better than Fenfluramine." (Plaintiffs' Complaint, Paragraph 104).

In their Motion to Remand, the Plaintiffs also allege, "[t]he detail representatives' failure to correct prior false statements — even if believed by them to be true when made — is fraud." (Plaintiffs' Motion, p. 6). Further, since Pondimin and Redux were related drugs, "any knowledge that sales representatives had about the dangers of Pondimin was also knowledge of the dangers of Redux, and vice versa." (Plaintiffs' Motion, p. 12). Thus, any duty to disclose the dangers of one drug required the same duty for the other.

In support of this argument, the Plaintiffs allege the "call notes" of the Defendant sales representatives prove the reps never disclosed to physicians the full extent of the risks associated with Pondimin or Redux, and never disclosed that Pondimin and Redux were the same drug.¹ The Plaintiffs...