Jones v. Nastech Pharmaceutical, No. CIV.A.2:02 CV 132 PG.

• Decision Date: 29 April 2004
• Docket Number: No. CIV.A.2:02 CV 132 PG.
• Citation: 319 F.Supp.2d 720
• Parties: Linda L. JONES, et al., Plaintiffs, v. NASTECH PHARMACEUTICAL, et al., Defendants.
• Court: U.S. District Court — Southern District of Mississippi

319 F.Supp.2d 720

Linda L. JONES, et al., Plaintiffs, v. NASTECH PHARMACEUTICAL, et al., Defendants.

No. CIV.A.2:02 CV 132 PG.

United States District Court, S.D. Mississippi, Hattiesburg Division.

April 29, 2004.

COPYRIGHT MATERIAL OMITTED

Larry O. Norris, Roger Dale Lott, Larry O. Norris, Attorney, Hattiesburg, MS, for plaintiffs.

Patrick N. Harkins, III, Walter T. Johnson, Lynn Plimpton Ladner, Watkins & Eager, Chris J. Walker, Holly Bridges Wiggs, Robert Niles Hooper, Markow Walker, P.A., Jackson, MS, for defendants.

MEMORANDUM OPINION AND ORDER

PICKERING, Circuit Judge.

This matter is before the Court on Plaintiffs' Motion to Remand. The Court having reviewed the Motion, response, the briefs of counsel, the authorities cited, the pleadings and exhibits on file, finds as follows:

FACTUAL/PROCEDURAL BACKGROUND

Plaintiffs initially filed this suit in the Circuit Court of Covington County, Mississippi. The suit concerns Plaintiffs' ingestion of Stadol, a prescription medication, with alleged addictive and harmful side effects. The Complaint alleges nine counts against four out-of-state pharmaceutical Defendants: strict product liability, negligence, breach of warranties, fraud, breach of fiduciary duty, civil conspiracy, violation of Mississippi Unfair or Deceptive Acts and Practices Act, fraudulent concealment, and negligent and willful misrepresentation. Plaintiffs allege only negligence against the resident Defendant physician, Dr. Tanious, and the clinic with which he is associated, Jefferson Medical Associates. Linda Jones was the only Plaintiff treated by the physician Defendant. None of the other four Plaintiffs was treated by Dr. Tanious, nor treated at Jefferson Medical Associates. Plaintiffs originally named three Mississippi resident pharmacy defendants who filled prescriptions for Linda Jones. These pharmacy defendants have been dismissed. An out-of-state pharmacy was also dismissed. Each Plaintiff resides in a different county in Mississippi. Defendants removed this case, claiming complete diversity by virtue of alleged fraudulent joinder by Plaintiffs.

REMAND AND FEDERAL JURISDICTION

Through decades of Supreme Court jurisprudence, it is axiomatic that federal courts are courts of limited jurisdiction. "When a federal court acts outside its statutory subject-matter jurisdiction, it violates the fundamental constitutional precept of limited federal power." Marathon Oil Co. v. Ruhrgas, 145 F.3d 211, 216 (5th Cir.1998) (en banc). Under our doctrine of "federalism" this Court should not usurp authority over cases that are properly in state court. See Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09, 61 S.Ct. 868, 85 L.Ed. 1214 (1941); Butler v. Polk, 592 F.2d 1293, 1296 (5th Cir.1979).

The Fifth Circuit has consistently held that the party urging jurisdiction upon the District Court bears the burden of demonstrating that the case is one which is properly before that Court. Village Fair Shopping Center Co. v. Sam Broadhead Trust, 588 F.2d 431, 433 (5th Cir.1979); Ray v. Bird & Son & Asset Realization Co., Inc., 519 F.2d 1081, 1082 (5th Cir.1975). "The burden of persuasion placed upon those who cry `fraudulent joinder' is indeed a heavy one." B., Inc. v. Miller Brewing Co., 663 F.2d 545, 549 (5th Cir.1981). "The removing party must show either that there is no possibility that the plaintiff would be able to establish a cause of action against the in-state defendant in state court; or that there has been outright fraud in the plaintiff's pleadings of jurisdictional facts." Id. at 549; (emphasis added) (citing Keating v. Shell Chemical Co., 610 F.2d 328 (5th Cir.1980); Tedder v. F.M.C. Corp. 590 F.2d 115 (5th Cir.1979); Bobby Jones Garden Apts. v. Suleski, 391 F.2d 172 (5th Cir.1968); Parks v. New York Times Co., 308 F.2d 474 (5th Cir.1962), cert. denied, 376 U.S. 949, 84 S.Ct. 964, 11 L.Ed.2d 969(1964)). The removing party must prove fraudulent joinder by clear and convincing evidence. Grassi v. Ciba-Geigy, Ltd., 894 F.2d 181, 186 (5th Cir.1990). This Court must first refer to the allegations made in the original pleading to determine whether or not Plaintiff can make out a viable claim against the resident Defendant. See Tedder v. F.M.C. Corp., 590 F.2d at 116; Gray v. U.S. Fidelity & Guaranty, 646 F.Supp. 27, 29 (S.D.Miss.1986). Those allegations must be construed most favorably to the Plaintiff as the party opposing removal, resolving all contested issues of fact and law in favor of the Plaintiff. B. Inc., 663 F.2d at 549; see also Bobby Jones Garden Apts., 391 F.2d at 177; Howard v. General Motors Corp., 287 F.Supp. 646, 648 (N.D.Miss.1968).

When considering whether a non-diverse defendant has been fraudulently joined to defeat diversity of citizenship jurisdiction, courts may "pierce the pleadings" and consider "summary judgment-type" evidence such as affidavits and deposition testimony. See Cavallini v. State Farm Mut. Auto Ins. Co., 44 F.3d 256, 263 (5th Cir.1995). "The district court is not to apply a summary judgment standard but rather a standard closer to the Rule 12(b)(6) standard." McKee v. Kansas City S. Ry. Co., 358 F.3d 329, 333-34 (5th Cir.2004). Under this standard, plaintiffs "may not rest upon the mere allegations or denials of [their] pleadings." Beck v. Texas State Bd. of Dental Examiners, 204 F.3d 629, 633 (5th Cir.2000).

Once the Court allows a "piercing" of the pleadings and a defendant has shown "no possibility" or "no reasonable basis" of recovery by specific evidence, a plaintiff cannot rely on conclusory or generic allegations of wrongdoing on the part of the non-diverse defendant to prevent remand. Even though the heavy burden of persuasion remains on the removing party. Fifth Circuit precedent establishes a shifting burden of persuasion. See Badon v. RJR Nabisco, Inc. 224 F.3d 382, 392-93 (5th Cir.2000); Peters v. Metropolitan Life Ins. Co., 164 F.Supp.2d 830, 834 (S.D.Miss.2001); Rainwater v. Lamar Life Ins., 246 F.Supp.2d 546, 548-51 (S.D.Miss.2003). Removal is proper if the plaintiff's pleading is pierced, and it is shown that as a matter of law there is no reasonable basis for predicting that the plaintiff might establish liability against the in-state defendant. Badon, 224 F.3d at 390; see Travis v. Irby, 326 F.3d 644, 648 (5th Cir.2003) ("[A]ny argument that a gap exists between the `no possibility' and `reasonable basis' of recovery language was recently narrowed, if not closed.").

"When a federal court is properly appealed to in a case over which it has, by law, jurisdiction, it has a duty to take such jurisdiction." England v. Louisiana State Bd. of Medical Examiners, 375 U.S. 411, 415, 84 S.Ct. 461, 11 L.Ed.2d 440 (1964) (citations omitted). A defendant's "right of removal cannot be defeated by a fraudulent joinder of a resident defendant having no real connection with the controversy." Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97, 42 S.Ct. 35, 66 L.Ed. 144 (1921). Chief Justice Marshall wrote in Cohens v. Virginia, 6 Wheat. 264, 19 U.S. 264, 404, 5 L.Ed. 257 (1821), "[i]t is most true that this court will not take jurisdiction if it should not; but it is equally true, that it must take jurisdiction if it should."

LITIGANT'S RIGHT TO APPROPRIATE FORUM

The plaintiff is master of his complaint and may through a properly pleaded complaint avoid federal jurisdiction. For instance in certain cases, plaintiffs may limit their recovery to less than the jurisdictional amount of $75,000, or may disavow any federal causes of action and thus keep their case in state court. See Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987); St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 294, 58 S.Ct. 586, 82 L.Ed. 845 (1938); Carpenter v. Wichita Falls Indep. Sch. Dist., 44 F.3d 362, 366 (5th Cir.1995). However, a defendant who is entitled to a federal forum likewise has a right to trial in that particular forum. See Federated Dep't Stores v. Moitie, 452 U.S. 394, 397 n. 2, 101 S.Ct. 2424, 69 L.Ed.2d 103 (1981) ("[C]ourts `will not permit plaintiff to use artful pleading to close off defendant's right to a federal forum.'") (quoting 14 Wright, Miller & Cooper, Federal Practice and Procedure, § 3722, pp. 564-66 (1976)); De Aguilar v. Boeing, 47 F.3d 1404, 1410 (5th Cir.1995) (pleading for damages below the jurisdictional amount in state court with knowledge that the claim is actually worth more to evade federal jurisdiction is "abusive manipulation" and "bad faith"); Carpenter, 44 F.3d at 366 (holding that plaintiff "may not avoid removal by artfully casting his federal suit as one arising exclusively under state law"). A plaintiff may not through innovative or manipulative pleading deprive a defendant of its right to a federal forum. "`[T]he Federal courts may and should take such action as will defeat attempts to wrongfully deprive parties entitled to sue in the Federal courts of the protection of their rights in those tribunals.'" Alabama Great Southern Railway Co. v. Thompson, 200 U.S. 206, 218, 26 S.Ct. 161, 50 L.Ed. 441 (1906).

ANALYSIS

The two issues before the Court are (1) whether the two remaining resident Defendants were fraudulently joined to defeat federal jurisdiction; and (2) whether the resident and non-resident Defendants were egregiously misjoined so as to constitute fraudulent joinder as to those Plaintiffs who were not treated by the resident physician Defendant.

1. Fraudulent Joinder

Defendants argue that the Plaintiffs have no possibility of establishing a cause of action against the resident Defendants because (1) the resident Defendants had no knowledge about the risk of addiction due to the Defendant pharmaceutical companies' alleged withholding of information; and (2) the claims are barred by the statute of limitations. The complaint does not allege a specific date when the cause of action arose. Plaintiffs' rebuttal brief states that Jones' claim arose after December 2000....