In re Eight Adversary Proceedings Removed from State Court By Johnson & Johnson
| Citation | 603 B.R. 849 |
| Decision Date | 02 July 2019 |
| Docket Number | Adv. Pro. Nos. 19-01103,19-01110,19-01105,19-01132,19-01130,19-01129,19-01106,19-01133 |
| Parties | IN RE: EIGHT ADVERSARY PROCEEDINGS REMOVED FROM STATE COURT BY JOHNSON & JOHNSON |
| Court | United States Bankruptcy Courts. Eleventh Circuit. U.S. Bankruptcy Court — Southern District of Florida |
Daniel J. Di Matteo, Esq., The Ferraro Law Firm, P.A., 600 Brickell Avenue – Suite 3800, Miami, FL 33131, (Counsel for the Plaintiffs in all eight proceedings)
Alexandra D. Blye, Esq., Carlton Fields Jordan Burt, P.A., 525 Okeechobee Blvd. – Suite 1200, West Palm Beach, FL 33401, (Counsel for Johnson & Johnson in Adv. Nos. 19-1103, 19-1105, 19-1106 and 19-1110)
John M. Lyons, Esq., 2001 Market Street – Suite 3000, Philadelphia, PA 19103, (Co-counsel for Johnson & Johnson in Adv. Nos. 19-1129, 19-1130, 19-1132 and 19-1133)
Johnson & Johnson and certain affiliated companies (collectively "J&J") are defending over 2,400 personal injury and wrongful death actions. The Plaintiffs claim that a talcum product sold by J&J contained asbestos which caused cancer
, specifically mesothelioma or ovarian cancer.
On February 13, 2019, Imerys Talc America, Inc., Imerys Talc Vermont, Inc., and Imerys Talc Canada, Inc. (collectively "Imerys") filed chapter 11 petitions in the District of Delaware (the "Imerys Bankruptcy Case"). Imerys supplied all or virtually all of the talc used in J&J's products after 1978.
In April 2019, J&J began filing notices of removal in personal injury and wrongful death cases removing the cases to the federal court. J&J's theory is that all of the claims against it are "related to" the Imerys Bankruptcy Case and are therefore subject to bankruptcy jurisdiction under 28 U.S.C. § 1334, and removal under 28 U.S.C. § 1452(a). J&J's factual premise for related to jurisdiction is discussed later in this opinion. The notices of removal include the notices of removal filed by J&J commencing the eight adversary proceedings in this Court that are the subject of this opinion (the "Notices of Removal").
On April 18, 2019, in conjunction with the notices of removal it filed here and around the country, J&J filed a motion in the Imerys Bankruptcy Case styled as a Motion to Fix Venue for Claims Related to Imerys' Bankruptcy Under 28 U.S.C. § 157(b)(5) and 1333(b) (the "Venue Motion"). Through the Venue Motion, J&J seeks to consolidate all of the removed cases in the Delaware District Court.
J&J filed its eight Notices of Removal between April 18, 2019 and May 7, 2019. Plaintiffs filed motions to remand (the "Motions to Remand") between May 6, 2019 and May 11, 2019. J&J filed its Motions to Stay Temporarily All Proceedings (the "Motions to Stay") on May 23, 2019 and May 28, 2019. The Court entered scheduling orders on the motions and each party filed memoranda.1
The Court conducted a hearing on the Motions to Stay and Motions to Remand on June 24, 2019. As announced at the conclusion of the hearing, and for the reasons discussed below, the Motions to Stay will be denied and the Motions to Remand will be granted. The Court will enter Orders on the motions in each of the individual adversary proceedings.
Counsel representing the Plaintiffs in all eight of these proceedings advised the Court that 408 of the cases that J&J removed around the country have already been remanded back to state court.2 J&J conceded at the June 24th hearing that only a few courts have granted its motions to stay and acknowledged that not a single court has denied motions for remand.
This Court's review of the facts and law leads to the same conclusion. The Court finds no cause to stay these proceedings, and the facts strongly support a decision to equitably remand these proceedings back to the state court. Given the breadth of opinions already published, the Court will not engage in a lengthy analysis but will review and discuss the key issues.
J&J has not established cause to stay these proceedings
J&J argues that this Court should defer consideration of the Motions to Remand until the District Court in Delaware rules on the Venue Motion. There is no reason to do so. First, this Court has previously held that the court to which an action is removed should consider the jurisdictional issues raised in remand motions before considering motions to transfer venue to the district where the underlying bankruptcy case is pending. Lennar Corp. v. Briarwood Capital LLC, 430 B.R. 253, 260-61 (Bankr. S.D. Fla. 2010) ; E.S. Bankest, LLC. v. United Beverage Florida, LLC (In re United Container, LLC), 284 B.R. 162, 166 (Bankr. S.D. Fla. 2002).
In both Lennar and United Container , this Court addressed the issue of whether, upon removal, the court must first rule on a motion to remand or whether it should consider first a motion to transfer venue. Like in this case, the defendants in United Container and Lennar removed state court cases to this Court under 28 U.S.C. § 1452(a), asserting that the state court cases were "related to" bankruptcy cases pending in another federal court. Plaintiffs moved to remand the cases to state court, and defendants moved to transfer venue to the "home courts" presiding over the bankruptcy cases. This Court reasoned that when a case is removed under 28 U.S.C. § 1452(a), "the court to which such claim or cause of action is removed has the authority to remand such a claim" under § 1452(b). Lennar , 430 B.R. at 261.
Similarly, in this case, this Court must hear the Plaintiffs' Motion for Remand first, as it is consistent with its jurisdictional gatekeeper role. The statutes at issue have two fundamentally different roles. While Congress gives the home court in a bankruptcy case the ability to fix the venue of certain claims under 28 U.S.C. § 157(b)(5), it provides the court to which a case is removed the power to remand such a case under 28 U.S.C. § 1452(b). Thus, before venue issues are considered, this Court's duty as gatekeeper is to first decide whether the case was properly removed or whether it should be remanded to state court.
In Lennar and United Container , the motions to transfer venue were brought under the change of venue authority in 28 U.S.C. § 1412. Here, the Venue Motion in play is brought under 28 U.S.C. § 157(b)(5). That section provides that the "home" bankruptcy court shall determine whether personal injury and wrongful death claims "shall be tried in the district court in which the bankruptcy case is pending or in the district court in the district in which the claim arose." J&J argues that this section gives the District Court in Delaware the authority to transfer all of the removed cases to that court.
Arguably, 28 U.S.C. § 157(b)(5) only applies to personal injury and wrongful death claims against a debtor, not claims against a non-debtor, like J&J, that may be "related to" a bankruptcy case. A.H. Robins v. Piccinin , 788 F.2d 994, 1011 (4th Cir. 1986). However, even if "related to" claims against a non-debtor are within the scope of 28 U.S.C. § 157(b)(5), § 157(b)(5) is still just a venue provision.
In this Court's view, the Venue Motion itself is premature until it is first determined whether the bankruptcy court has jurisdiction over the claims and, if so, whether jurisdiction should be exercised. Thus, where personal injury or wrongful death cases are remanded after removal, there is no venue decision to be made under § 157(b)(5).
There is a second reason for denying the Motions to Stay. While awaiting final briefing and a decision on the Venue Motion, J&J filed an emergency motion in the District of Delaware on April 30, 2019, entitled Emergency Motion for Provisional Transfer Under 28 U.S.C. § 157(b)(5) (the "Emergency Provisional Transfer Motion") [DE #12 and 13 in Case 1:19-MC-00103-MN]. That motion requested an order directing the provisional transfer to the District of Delaware of the approximately 2,400 federal and state personal injury and wrongful death cases pending against J&J. Presumably, this was J&J's effort to stop the various courts around the country from considering the pending remand motions.
The strategy failed. On May 9, 2019, the Delaware District Court entered a Memorandum Opinion [DE #34] denying the Emergency Provisional Transfer Motion. The court found that J&J failed to establish that provisional transfer was warranted.
The Court interprets the District Court's order as giving it a green light to consider the Motions to Remand without waiting for that court to rule on the Venue Motion. For these reasons, the Motions to Stay will be denied.
Even if there is related to jurisdiction, these proceedings should be remanded back to the state courts
Removal of these cases was proper under 28 U.S.C. § 1452(a) only if the federal court has jurisdiction under the bankruptcy provisions in 28 U.S.C. § 1334. That section grants jurisdiction over "all civil proceedings arising under title 11 or arising in or related to cases under title 11" (emphasis added). The state court claims against J&J did not arise under the Bankruptcy Code nor did they arise in the Imerys Bankruptcy Case. Therefore, subject matter jurisdiction exists, if at all, under the "related to" jurisdictional grant.
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