Perez v. Forest Labs., Inc.

• Decision Date: 10 October 2012
• Docket Number: Case No. 4:12CV01064 ERW.
• Parties: Marissa PEREZ, Individually and as Natural Parent of R.G., and R.G., by her Next Friend, Marissa Perez, Plaintiffs, v. FOREST LABORATORIES, INC., and Forest Pharmaceuticals, Inc., Defendants.
• Court: U.S. District Court — Eastern District of Missouri

902 F.Supp.2d 1238

Marissa PEREZ, Individually and as Natural Parent of R.G., and R.G., by her Next Friend, Marissa Perez, Plaintiffs,

v.FOREST LABORATORIES, INC., and Forest Pharmaceuticals, Inc., Defendants.

Case No. 4:12CV01064 ERW.

United States District Court,

E.D. Missouri,

Eastern Division.

Oct. 10, 2012.

Jeffrey J. Lowe, Jeffrey J. Lowe, P.C., St. Louis, MO, John J. Carey, Carey and Danis, Clayton, MO, for Plaintiffs.

Sandra Jane Wunderlich, Stinson and Morrison, St. Louis, MO, for Defendants.

MEMORANDUM AND ORDER

E. RICHARD WEBBER, Senior District Judge.

This matter comes before the Court on Plaintiffs' Motion to Remand the case to state court [ECF No. 15].

I. BACKGROUND

On June 8, 2012, Plaintiffs filed this product liability action against Forest Laboratories Inc., and Forest Pharmaceuticals Inc., in the Circuit Court of St. Louis County, Missouri. Six days later, on June 14, 2012, prior to either defendant being served, Forest Laboratories Inc., (“Forest”) filed a Notice of Removal [ECF No. 1] in this Court pursuant to 28 U.S.C. §§ 1332, 1441, and 1446.¹ Removal was based on diversity of citizenship which is undisputed by the parties. Plaintiffs are citizens of Florida. Forest is incorporated in Delaware with its principal place of business in New York, and Forest Pharmaceuticals Inc., is incorporated in Delaware with its principal place of business in Missouri. The Notice of Removal alleges that the amount in controversy exceeds $75,000. Plaintiffs subsequently filed the instant Motion to Remand.

Plaintiffs contend this action should be remanded to state court due to lack of federal subject matter jurisdiction. Plaintiffs argue that Forest engaged in legal gamesmanship by effecting pre-service removal, which violates the legislative intent relating to removal jurisdiction. Specifically, Plaintiffs maintain that Forest hawked the docket to remove the action a mere six days after it was filed, before the forum defendant, Forest Pharmaceuticals, Inc., could be served and trigger the “forum defendant rule.” ² Plaintiffs maintain that the removal, nonetheless, does constitute a violation of the forum defendant rule. Furthermore, the Plaintiffs note that in the Eighth Circuit, the forum defendant rule is deemed jurisdictional, and its violation requires remand.³ In opposition to Plaintiffs' Motion, Forest argues that (1) complete diversity exists, (2) Forest timely removed this case, and (3) under the plain meaning of the statute, 28 U.S.C. § 1441(b)(2), the forum defendant rule is inapplicable here, as Forest Pharmaceuticals Inc., although a citizen of Missouri, was not properly “joined and served” at the time of removal.

II. LEGAL STANDARD

Federal courts are courts of limited jurisdiction. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994). Where so authorized, the courts have a “virtually unflagging obligation ... to exercise the jurisdiction given them.” Barzilay v. Barzilay, 536 F.3d 844, 849 (8th Cir.2008) (alteration in the original) (quoting Colo. River Water Conservation Dist. v. United States, 424 U.S. 800, 817, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976)). Federal district courts have subject matter jurisdiction over cases that meet the standards for diversity jurisdiction and cases that raise federal questions. See Peters v. Union Pac. R.R. Co., 80 F.3d 257, 260 (8th Cir.1996). Diversity jurisdiction exists where the matter in controversy exceeds the sum or value of $75,000, and the parties are citizens of different states. 28 U.S.C. § 1332(a). “Complete diversity of citizenship exists where no defendant holds citizenship in the same state where any plaintiff holds citizenship.” OnePoint Solutions, LLC v. Borchert, 486 F.3d 342, 346 (8th Cir.2007).

A defendant may remove an action from state court to federal court only when a federal court would have had original jurisdiction over the action. 28 U.S.C. § 1441; Caterpillar, Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987); Phipps v. FDIC, 417 F.3d 1006, 1010 (8th Cir.2005).⁴ However, there is a restriction on the removal of diversity cases known as the “forum defendant rule.” This rule, set forth in 28 U.S.C. § 1441(b), makes diversity jurisdiction in a removal case narrower than if the case was originally filed in federal court by the plaintiff. Hurt v. Dow Chem. Co., 963 F.2d 1142, 1145 (8th Cir.1992). Under the “forum defendant rule,” a defendant can remove a case based on diversity jurisdiction only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought. Lincoln Prop. Co. v. Roche, 546 U.S. 81, 90, 126 S.Ct. 606, 163 L.Ed.2d 415 (2005); Horton v. Conklin, 431 F.3d 602, 604 (8th Cir.2005) (internal citations omitted). Federal courts lack diversity jurisdiction over a removed case in which one of the defendants is a citizen of the forum state. Hinkle v. Norfolk S. Ry. Co., No. 4:05CV1867, 2006 WL 2521445, at *2 (E.D.Mo. Aug. 29, 2006) (internal citations omitted). Furthermore, “[t]he violation of the forum defendant rule is a jurisdictional defect and ‘not a mere procedural irregularity capable of being waived.’ ” Horton, 431 F.3d at 605 (quoting Hurt, 963 F.2d at 1146).

A party seeking to remove a case to federal court bears the burden of establishing federal subject matter jurisdiction. In re Bus. Men's Assur. Co. of Am., 992 F.2d 181, 183 (8th Cir.1993) (internalcitations omitted). Removal statutes are to be strictly construed, and all doubts are to be resolved in favor of remand. Int'l Ass'n of Entrepreneurs of Am. v. Angoff, 58 F.3d 1266, 1270 (8th Cir.1995); See In re Prempro Prods. Liab. Litig., 591 F.3d 613, 620 (8th Cir.2010), cert. denied––– U.S. ––––, 131 S.Ct. 474, 178 L.Ed.2d 290 (2010).

III. DISCUSSION

In Forest's Notice of Removal [ECF No. 1], Forest contends that the forum defendant rule is inapplicable as there is complete diversity between the parties and removal occurred before the forum defendant, Forest Pharmaceuticals, Inc., was served. Plaintiffs do not dispute that there is complete diversity between the parties or that removal took place prior to service. However, Plaintiffs argue, in their Memorandum in Support of Motion to Remand [ECF No. 16], that the forum defendant rule was violated by Forest monitoring the docket and removing the case a mere six days after it was filed, and before either defendant could possibly be served. According to Plaintiffs, the state clerk had not yet issued summons, much less delivered it to the sheriff, when Forest removed this action. Plaintiffs reason that the forum defendant rule is applicable here and Forest Pharmaceuticals Inc.'s Missouri citizenship is a basis for remand.

In order to evaluate the propriety of the Plaintiffs' Motion to Remand, the purposes behind diversity jurisdiction, removal jurisdiction, the forum defendant rule, and the “joined and served” language of 28 U.S.C. § 1441(b)(2) must be examined.

The purpose of federal diversity jurisdiction is to avoid possible prejudice to an out-of-state defendant. Lumbermen's Mut. Cas. Co. v. Elbert, 348 U.S. 48, 54, 75 S.Ct. 151, 99 L.Ed. 59 (1954) (Frankfurter, J., concurring). Removal based on diversity jurisdiction is premised on protecting non-resident litigants from prejudice in state court. See Gafford v. Gen. Elec. Co., 997 F.2d 150, 158–59 (6th Cir.1993), abrogated on other grounds by Hertz Corp. v. Friend, 559 U.S. 77, 130 S.Ct. 1181, 175 L.Ed.2d 1029 (2010). “The need for such protection [from local bias] is absent, however, in cases where the defendant is a citizen of the state in which the case is brought.” Lively v. Wild Oats Mkts., Inc., 456 F.3d 933, 940 (9th Cir.2006). In a similar fashion, with a case involving multiple defendants where at least one is a citizen of the forum state, the forum defendant rule still bars removal as the likelihood of local bias against all defendants is too attenuated to justify removal. See Dresser Indus., Inc. v. Underwriters at Lloyd's of London, 106 F.3d 494, 499 (3d Cir.1997) (noting that while “diversity jurisdiction exists because of a fear that the state tribunal would be prejudiced towards the out-of-state plaintiff or defendant, that concern is understandably allayed when that party is joined with a citizen from the forum-state”).

“The forum defendant rule, however, creates an opportunity for procedural gamesmanship on behalf of plaintiffs trying to keep an action in state court.” Fields v. Organon USA Inc., No. 07–2922, 2007 WL 4365312, at *3 (D.N.J. Dec. 12, 2007). A plaintiff could either improperly join a forum defendant, or alternatively, a plaintiff could join a forum defendant that the plaintiff had no honest intention of actually pursuing in litigation, and then not serve the forum defendant. Id. Section 1441(b) attempts to eliminate these potential abuses by requiring that the forum defendant be “properly joined and served.” Id. (quoting Stan Winston Creatures, Inc. v. Toys “R” Us, Inc., 314 F.Supp.2d 177, 181 (S.D.N.Y.2003)). “[T]he purpose of the ‘joined and served’ requirement is to prevent a plaintiff from blocking removal by joining as a defendant a resident party against whom it does not intend to proceed, and whom it does not even serve.” Id. See also Perfect Output of Kan. City, LLC v. Ricoh Americas Corp., No. 12–0189, 2012 WL 2921852, at *2 (W.D.Mo. July 17, 2012).

Plaintiffs argue that permitting Forest to remove, based on a literal reading of the “properly joined and served” language, is to allow a similar type of gamesmanship by a defendant that this qualification was aimed at barring from a plaintiff. Plaintiffs argue that hawking the docket to effect pre-service removal of an action with a forum defendant is contrary to legislative intent relating to removal jurisdiction.

Pre-service removal by means of monitoring the electronic docket smacks more of forum shopping by a defendant,...