In re Rezulin Products Liability Litigation
| Decision Date | 01 March 2001 |
| Docket Number | 00 Civ. 2843(LAK). |
| Parties | In re REZULIN PRODUCTS LIABILITY LITIGATION This paper relates to 00 Civ. 6069, 00 Civ. 7627, 00 Civ. 7628, 00 Civ. 7629, 00 Civ. 7630, 00 Civ. 7631, 00 Civ. 7632, 00 Civ. 7634, 00 Civ. 7635, 00 Civ. 7636, 00 Civ. 7072, 00 Civ. 8501, 00 Civ. 9033, 00 Civ. 9039, 00 Civ. 9131, 01 Civ. 0049. |
| Court | U.S. District Court — Southern District of New York |
Charles A. Mathis, Herman, Mathis, Casey & Kitchens, Atlanta, GA, Arnold Levin, Levin Fishbein Sedran & Berman, Philadelphia, PA, Regina L. LaPolla, Milberg Weiss Bershad Hynes & Lerach LLP New York City, Edward Blackmon, Jr., Blackmon & Blackmon, Canton, MS, David P. Matthews, for Plaintiffs.
David Klingsberg, New York City, Alan E. Rothman, Kaye, Scholer, Fierman, Hays & Handler, LLP, New York City, John E. Goodman, Bradley Arant Rose & White LLP, Birmingham, AL, Frank A. Wood, Jr., Watkins & Eager, PLLC, Jackson, MS, Quentin F. Urquhart, Jr., Irwin Fritchie Urquhart & Moore LLC, New Orleans, LA, for Defendants.
These sixteen actions are among the hundreds seeking recovery for personal injuries allegedly resulting from the use of the prescription diabetes medication, Rezulin, formerly manufactured by defendants Warner-Lambert Co. and its Parke-Davis division, that have been consolidated here for pretrial proceedings by the Judicial Panel on Multidistrict Litigation. Each of these sixteen originally was commenced in a state court and removed by defendants on the basis of diversity of citizenship. The matter now is before the Court on plaintiffs' motions to remand on the ground that subject matter jurisdiction is lacking.
Plaintiffs' chief claim is that these actions were removed improperly because there is at least one defendant in each — usually a pharmacy or an employee of one of the defendant pharmaceutical companies — that is a citizen of the same state as a plaintiff, thus destroying the complete diversity of citizenship essential to the exercise of removal jurisdiction. Defendants rejoin that the non-diverse defendants must be disregarded.
The question whether a non-diverse party has been joined improperly is one of federal law.1 Moreover, although the joinder of parties lacking a genuine interest in the controversy frequently is referred to as fraudulent joinder, thus suggesting that the determinative issue is one of motive, motive in fact usually has nothing to do with it. The only issue is whether the plaintiff has a legitimate claim against the non-diverse or in-state defendant — whether, in other words, the plaintiff has no real or direct interest in the controversy vis-a-vis the non-diverse or instate defendant because it cannot state a legally sufficient and factually arguable claim for relief against it.2
The standard for determining whether a plaintiff's claim against a defendant who is a citizen of the plaintiff's state is sufficiently substantial to defeat removal jurisdiction is governed by Pampillonia v. RJR Nabisco, Inc.3 In order to warrant disregard of the citizenship of a non-diverse party, a removing defendant must "demonstrate, by clear and convincing evidence, either that there has been outright fraud committed in the plaintiff's pleadings, or that there is no possibility, based on the pleadings, that a plaintiff can state a cause of action against the non-diverse defendants in state court."4 The burden on a removing defendant to meet this standard is a heavy one, and all reasonable doubts of fact and law are resolved in favor of the plaintiff.5 Nevertheless, the burden is not impossible of satisfaction.
The application of this standard to questions of state law also merits a further word. Federal courts sitting in diversity commonly apply state law as rules of decision under Erie R.R. Co. v. Tompkins.6 Their role in such cases is familiar — they make their best judgments as to how the state courts would resolve the issues before them and decide their diversity cases accordingly.7 As the reasonable possibility standard implies, however, the task here is more limited. In a case in which the defendants contend that joinder is "fraudulent" because the claim against a non-diverse defendant is insufficiently substantial as a matter of law, the Court must consider the state law upon which the claim rests and then determine only whether there is a reasonable possibility that the relevant state's highest court would rule in favor of the plaintiff were the issue presented to it. If there is such a possibility, then the joinder was appropriate and the case must be remanded.
In six cases filed in Mississippi and one filed in Alabama, defendants claim that plaintiffs improperly joined Warner-Lambert sales representatives.8 All six Mississippi complaints allege that the sales representatives "falsely and fraudulently advertised, marketed, distributed and sold the defendants' Rezulin drug to pharmacies, plaintiffs, decedents, and the general public of the state of Mississippi, and in particular, to Plaintiffs and other [Mississippi] residents."9 They allege failure to warn, fraudulent and negligent misrepresentation, and breach of warranty. The Alabama complaint makes substantially similar claims as well as one based on the Alabama extended manufacturer's liability doctrine (the "AEMLD"), which is a common law doctrine that has subsumed all claims involving injury caused by defective products.10
The Second Circuit's standard for fraudulent joinder allows for removal despite the presence of non-diverse defendants if the claims against those defendants have no basis in fact.11 This is so when "the allegations in the plaintiff's pleading ... are shown to be so clearly false and fictitious that no factual basis exists for an honest belief on the part of plaintiff that there is liability — in short that the joinder is without any reasonable basis in fact and is made without any purpose to prosecute the cause in good faith ...."12
Defendants challenge the factual allegations of the complaints with respect to the sales representatives. Affidavits of the defendant sales representatives filed in each of the Mississippi cases state that the sales representatives "made no representations, by way of promotion or advertising or otherwise, or any statements whatsoever, including but not limited to representations regarding Rezulin to plaintiff or to the general public."13 The affidavit filed in the Alabama case states that the sales representative had no dealings with plaintiff or plaintiff's decedent and did not "make any statements to the general public or participate in any advertising or promotion to the general public concerning Rezulin."14 Plaintiffs have not responded to the affidavits in any way. In consequence, the Court can conclude only that the joinder of these sales representatives lacked any reasonable basis in fact.15 This is not, however, the only basis upon which the Court finds joinder of the sales representatives to have been improper.
The joinder of the sales representatives in the Mississippi and Alabama cases would have been inappropriate even if there were a reasonable factual basis for the claims against them. There simply is no reasonable basis for supposing that any of the claims against them would be found legally sufficient by Mississippi or Alabama courts.
The dispositive question is whether there is a reasonable possibility that the Mississippi Supreme Court would find that pharmaceutical sales representatives have a duty to warn of characteristics of prescription drugs they sell. While no Mississippi court has resolved this precise issue, it does not follow that a "possibility exists that plaintiff can establish any cause of action against [the] defendant[s]."16
Mississippi follows the learned intermediary rule. "[W]here prescription drugs are concerned, the manufacturer's duty to warn is limited to an obligation to advise the prescribing physician of any potential dangers that may result from the drug's use."17 The Mississippi Supreme Court has explained its rationale for its adoption of this principle as follows:
18
Precisely the same considerations apply here. If pharmaceutical sales representatives handling prescription drugs have any duty to warn anyone of dangers of their products, the duty is to warn the physicians to whom they promote the product. In any case, they have no duty to warn patients. Accordingly, insofar as these complaints rest on a contention that the sales representatives failed to warn plaintiffs or the public generally, there is no reasonable chance that the Mississippi courts would find them sufficient.
Nor are these claims saved by plaintiffs' conclusory allegations that the defendant sales representatives failed adequately to warn "physicians."19 In Mississippi, as elsewhere, the injury complained of must be a proximate consequence of the alleged breach of duty.20 Yet plaintiffs do not allege that the defendant sales representatives failed to warn the particular physicians who prescribed the drug for them, let alone that this alleged failure was the proximate cause of...
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