Hodson v. AH Robins Co., Inc.

• Decision Date: 24 November 1981
• Docket Number: 81-0087-R,81-0084-R,81-0711-R and 81-0922-R.,81-0011-R,81-0085-R,81-0286-R,81-0287-R,81-0028-R,81-0025-R,Civ. A. No. 80-0979-R,81-0419-R,81-0035-R,81-0023-R,81-0032-R,81-0098-R to 81-0108-R
• Citation: 528 F. Supp. 809
• Court: U.S. District Court — Eastern District of Virginia
• Parties: Carol Patricia HODSON, et al., Plaintiffs, v. A. H. ROBINS COMPANY, INC., et al., Defendants.

528 F. Supp. 809

Carol Patricia HODSON, et al., Plaintiffs, v. A. H. ROBINS COMPANY, INC., et al., Defendants.

Civ. A. Nos. 80-0979-R, 81-0011-R, 81-0023-R, 81-0025-R, 81-0028-R, 81-0032-R, 81-0035-R, 81-0084-R, 81-0085-R, 81-0087-R, 81-0098-R to 81-0108-R, 81-0286-R, 81-0287-R, 81-0419-R, 81-0711-R and 81-0922-R.

United States District Court, E. D. Virginia, Richmond Division.

November 24, 1981.

J. Michael Sconyers, Speiser, Krause & Madole, Falls Church, Va., Philip Silverman, Annandale, Va., Conklin, Davids & Friedman, Michael Friedman, San Francisco, Cal., Clifford J. Shoemaker, Washington, D. C., for plaintiffs.

Kevin J. Dunne, Sedwick, Detert, Moran & Arnold, San Francisco, Cal., for Davis and Lerner.

Barbara L. Gately, Washburn, Kemp & Wagenseil, San Francisco, Cal., for Pee Wee Molding Corp.

J. Jay Corson, IV, Boothe, Prichard & Dudley, Stephen W. Robinson, Fairfax, Va., H. H. McVey, III, McGuire, Woods & Battle, Richmond, Va., for defendants.

G. Kenneth Miller, May, Miller & Parsons, Richmond, Va., for Davis, Lerner and Pee Wee Molding Corp.

MEMORANDUM

MERHIGE, District Judge.

I. FACTS

The plaintiffs in these cases are English citizens who were prescribed and used the Dalkon Shield ("Shield"), an intrauterine contraceptive device manufactured by defendant A. H. Robins Company, Inc. ("Robins"). For the most part, the Shields were allegedly inserted and removed by British physicians in the United Kingdom. Plaintiffs seek recovery, for injuries¹ allegedly caused by the device, from Robins, a Virginia corporation with its principal place of business in Richmond, Virginia, Pee Wee Molding Corp. ("Pee Wee"), incorporated under the laws of New York with its sole office in Brooklyn, New York, Irwin S. Lerner ("Lerner"), a resident of Connecticut, and Hugh J. Davis, a Maryland resident. They bring claims of negligence in the design, manufacture, distribution and testing of the Shield, strict liability, breach of express warranty, fraudulent advertising and promotion of the device, willful failure to disclose known defects in the product and civil conspiracy among the defendants to suppress such information. A number of these actions were originally filed in the United States District Court for the Northern District of California and were transferred to this Court pursuant to 28 U.S.C. § 1406(a).

All defendants have moved to dismiss these cases on grounds of improper venue under the general venue statute, 28 U.S.C. § 1391. Robins, Lerner and Davis also urge dismissal under the doctrine of forum non conveniens. Robins further asserts that dismissal is warranted under F.R.Civ.P. Rule 44.1.

This Court's jurisdiction over the subject matter of these cases rests on 28 U.S.C. § 1332(a)(1), diversity of citizenship. For the purpose of these motions, the Court assumes that it has jurisdiction over all the defendants under Va.Code § 8.01-328.1 (1977 repl. vol.).

II. VENUE

Under 28 U.S.C. § 1391(a), a civil action in which jurisdiction is founded solely on diversity of citizenship may be brought only in the district where all the plaintiffs reside, all the defendants reside, or "in which the claim arose." Alien citizens have no residence in any district for purposes of venue. Galveston, Harrisburg and San Antonio Railway Co. v. Gonzales, 151 U.S. 496, 14 S.Ct. 401, 38 L.Ed. 248 (1894); Acosta v. Grammer, 402 F.Supp. 736 (E.D.Mo.1975); Prudencio v. Hanselmann, 178 F.Supp. 887 (D.Minn.1959). Venue clearly is proper in this district with respect to Robins, since a corporation may be sued in any judicial district in which it is incorporated or licensed to do business or is doing business, and that district is seen as the corporation's residence for venue purposes. 28 U.S.C. § 1391(c). Pee Wee, however, is a New York corporation and is not authorized to do business in Virginia. It has no representatives, employees or property here and has not engaged in any business transactions in Virginia other than the shipment to Richmond and Lynchburg, Virginia of plastic parts it molded for the Shield from 1971 to 1974.² Even assuming that Pee Wee's activities constituted "doing business" in this district during that period, it does not appear that Pee Wee was transacting business here at the time relevant for determining whether venue is proper, i.e., the point when the plaintiffs' causes of action arose. Snyder v. Eastern Auto Distributors, Inc., 357 F.2d 552 (4th Cir. 1966), cert. denied, 384 U.S. 987, 86 S.Ct. 1889, 16 L.Ed.2d 1004 (1966). Nor are Lerner and Davis residents of this district. Venue is proper in this court, then, against all these defendants only if it can be said that the plaintiffs' claims against them "arose" here within the meaning of § 1391(a). The burden is on the plaintiffs to establish that venue is appropriate in this district. See Bartholomew v. Virginia Chiropractors Association, Inc., 612 F.2d 812 (4th Cir. 1979) cert. denied, 446 U.S. 938, 100 S.Ct. 2158, 64 L.Ed.2d 791 (1980); 15 Wright, Miller and Cooper, Federal Practice and Procedure, § 3826 (1976 and 1978 Supp.).

The term "claim" in § 1391(a) refers to the "aggregate of operative facts giving rise to rights enforceable in the courts." United States Fidelity & Guaranty Co. v. Alexander, 463 F.Supp. 687, 691 (S.D.Ga. 1979); Maney v. Ratcliff, 399 F.Supp. 760, 766 (E.D.Wis.1975).³ Plaintiffs' claims include, as the Court has noted, alleged defects in the Shield and resultant liability on grounds of negligence, strict liability and breach of warranty, fraudulent advertising of the device, willful failure to disclose known risks caused by use of the Shield, and civil conspiracy to misrepresent its safety and conceal its problems.

The search for the genesis of plaintiffs' claims requires some discussion of the history of the Dalkon Shield. The record reflects that it was co-invented and designed in 1968 by Lerner in Connecticut and Davis, a medical doctor and associate professor at Johns Hopkins University in Maryland. In 1969, the two formed the Dalkon Corporation in Connecticut to manufacture and distribute the device. That company assigned all of its rights and interests in the Shield to Robins in June, 1970. From 1971 to 1974, Robins manufactured the devices in Richmond and at the location of a wholly owned subsidiary, the Chap Stick Company, in Lynchburg, Virginia. Both Lerner and Davis remained consultants to Robins after the 1970 transfer and received a royalty based on the gross sales price of all Shields sold thereafter. Robins distributed the product nationally and, through a wholly-owned subsidiary, A. H. Robins Co., Ltd., in England from 1971 until it was removed from the market in 1974. From 1968 to 1970, Pee Wee molded the plastic portion of the Shield in New York and shipped them to Lerner in Connecticut. From 1971 to 1974, it molded both this plastic part and the inserter stick and shipped them to Robins in Richmond and Lynchburg.⁴

Congress added the "claim arose" language to § 1391(a) and (b) in 1966. The amendment was "designed to close the `venue gaps' that existed under earlier versions of the statute in situations in which joint tortfeasors, or other multiple defendants who contributed to a single injurious act, could not be sued jointly because they resided in different districts." Leroy v. Great Western United Corp., 443 U.S. 173, 184 n.17, 99 S.Ct. 2710, 2717 n.17, 61 L.Ed.2d 464 (1979). See also Brunette Machine Works, Ltd. v. Kockum Industries, Inc., 406 U.S. 706, 710 n.8, 92 S.Ct. 1936, 1939 n.8, 32 L.Ed.2d 428 (1972). The Court in Leroy viewed a Texas corporation's challenge to the takeover statutes of three states as separate claims against the individual officials of each state which could not be joined in one action. The instant plaintiffs, on the other hand, allege that wrongful conduct by each defendant contributed to the injuries received from their use of the Dalkon Shield. These cases present just the sort of "venue gap" at which the amendment to § 1391(a) and (b) was directed: allegedly wrongful conduct by multiple defendants residing in different districts which caused injury to the plaintiffs. If the plaintiffs' claims did arise in this district, venue is proper in this court as to all the defendants.

The United States Court of Appeals for the Fourth Circuit has not had occasion to rule on the proper test of where a claim arises for purposes of § 1391(a) or (b). Generally, however, the principal standards used by the federal courts are:

(1) the place of injury rule;

(2) the weight of the contacts rule; and

(3) the rule which turns on whether a substantial part of the events or omissions giving rise to the claim occurred in the district.

Cochrane v. Iowa Beef Processors, Inc., 596 F.2d 254 (8th Cir. 1979), cert. denied, 442 U.S. 921, 99 S.Ct. 2848, 61 L.Ed.2d 290 (1979). See 15 Wright, Miller and Cooper, Federal Practice and Procedure, § 3806 (1976 and 1980 Supp.).

The place of injury test deems that the claim arises in the district in which the plaintiff's injuries were suffered, i.e., where the effect of the defendants' allegedly wrongful act occurred. See, e.g. Sherman v. Moore, 86 F.R.D. 471 (S.D.N.Y.1980) (claim for personal injuries received in automobile accident held to arise in district in which accident occurred); Sheffield v. Texas, 411 F.Supp. 709 (N.D.Tex.1976) (challenge to the constitutionality of state school grant program held to arise in district where effect of the program was felt by the plaintiffs); Maney v. Ratcliff, supra (§ 1983 action based on an allegedly unlawful arrest and detention; claim arose where the arrest and detention occurred); Alabama Great Southern Railroad Co. v. Allied Chemical Co., 312 F.Supp. 3 (E.D.Va.1970) (claim for damages sustained in train derailment arose where accident occurred).

The weight of the contacts test surfaced in Philadelphia Housing Authority v. American Radiator & Standard Sanitary Corp., 291 F.Supp. 252 (E.D.Pa.1968), an...