Salisbury v. Purdue Pharma, L.P.

• Decision Date: 12 October 2001
• Docket Number: No. CIV.A. 01-241-JMH.,CIV.A. 01-241-JMH.
• Citation: 166 F.Supp.2d 546
• Parties: Ricky SALISBURY et al., Plaintiffs, v. PURDUE PHARMA, L.P. et al., Defendants.
• Court: U.S. District Court — Eastern District of Kentucky

166 F.Supp.2d 546

Ricky SALISBURY et al., Plaintiffs, v. PURDUE PHARMA, L.P. et al., Defendants.

No. CIV.A. 01-241-JMH.

United States District Court, E.D. Kentucky, Pikeville Division.

October 12, 2001.

Ira Branham, Branham & Carter, P.S.C., Pikeville, KY, Gary L. Gardner, C. David Ewing, Damon Willis, Gardner, Ewing & Souza, Louisville, KY, for plaintiffs.

John M. Famularo, III, Daniel E. Danford, Stites & Harbison, Lexington, KY, for Purdue Pharma L.P., Purdue Pharma, Inc., Purdue Frederick Company, Purdue Pharmaceuticals L.P., P.F. Laboratories, Inc., and PRA Holdings, Inc.

Keith Moorman, Susan J. Mohler, Frost Brown Todd LLC, Lexington, KY, Maria F. Howell, Paul F. Strain, Venable, Baetjer & Howard, Baltimore, MD, M. King Hill, III, Venable, Baetjer & Howard, LLP, Towson, MD, for Abbott Laboratories.

Ronald L. Green, Boehl, Stopher & Graves, Lexington, KY, for Total Pharmacy Care.

MEMORANDUM OPINION AND ORDER

HOOD, District Judge.

This matter is before the Court on plaintiff's motion to remand [Record No. 13]. Defendants having responded [Record Nos. 19 & 20] and plaintiff having replied [Record No. 22], this matter is ripe for review.

Factual Background

This dispute is in the nature of a products liability action, the thrust of plaintiff's complaint being that defendants bear legal responsibility for the manufacture and distribution of OxyContin, a schedule II narcotic drug. Plaintiffs assert no less than ten (10) causes of action: (1) negligence, (2) failure to warn, (3) violation of Kentucky's Consumer Protection Act (K.R.S. § 367.010 et seq.), (4) conspiracy, (5) breach of express warranty, (6) breach of implied warranty, (7) fraud, (8) unjust enrichment, (9) public nuisance, and (10) medical monitoring.¹ Plaintiffs also seek punitive damages. Plaintiffs' suit assumes the form of a class action under Ky. R. Civ. P. 23, and plaintiffs' complaint identifies three separate classes on behalf of whom relief, both legal and equitable, is sought. Plaintiffs bring suit against eleven (11) defendants, a group consisting of nine (9) "drug company" defendants and two (2) "pharmacy defendants", Total Pharmacy Care and RA Discount Pharmacy. This subclassification is helpful in resolving the jurisdictional question that the instant motion presents.

Plaintiffs' motion to remand is grounded in the argument that this Court lacks subject matter jurisdiction. More specifically, plaintiffs argue that because the parties are not completely diverse the Court lacks jurisdiction under 28 U.S.C. § 1332, and that because there is no federal question presented, jurisdiction is also improper under 28 U.S.C. § 1331. Defendants counter that this Court does have subject matter jurisdiction. Defendants' argument in support of subject matter jurisdiction is predicated on the doctrine of "fraudulent joinder", or, alternatively, federal preemption.

Because the Court finds that defendant pharmacy companies, both citizens of Kentucky, were fraudulently joined, the Court does not reach defendants' preemption argument. The Court has subject matter jurisdiction under 28 U.S.C. § 1332.

Standard of Review

The test in fraudulent joinder cases was recently discussed by the Sixth Circuit in Jerome-Duncan, Inc. v. Auto-By-Tel, L.L.C., 176 F.3d 904 (6th Cir.1999). There, the court noted that the doctrine of fraudulent joinder is applicable in three situations: (1) when there is no colorable basis for a claim against the non-diverse defendant, (2) when a plaintiff engages in outright fraud in pleading jurisdictional allegations, and (3) when the plaintiff joins a defendant who has no joint, several, or alternative liability with a diverse defendant (and there is no nexus between the claims against the diverse and non-diverse defendant). Id. Because defendants do not allege outright fraud in plaintiffs' jurisdictional pleadings, application of the doctrine of fraudulent joinder (and, by implication, remand) is proper only upon a showing that there exists no colorable claim against the non-diverse defendants (in the instant case, the pharmacy defendants), or upon a showing that there exists no joint, several, or alternative liability between the non-diverse (the pharmacy companies) and diverse (the drug companies) defendants.

The question, then, is "whether there is arguably a reasonable basis for predicting that state law might impose liability on the facts involved." Alexander v. Electronic Data Systems Corp., 13 F.3d 940, 949 (6th Cir.1994). Put differently, "[f]raudulent joinder arises when the removing parties ... present sufficient evidence that [plaintiff] could not have established a cause of action against nondiverse defendants under state law." Sprowls v. Oakwood Mobile Homes, Inc., 119 F.Supp.2d 694, 695-96 (W.D.Ky.2000)(quoting Coyne v. American Tobacco Co., 183 F.3d 488 (6th Cir.1999)). The Sixth Circuit has reaffirmed that the removing party faces a considerable burden in proving fraudulent joinder, making clear that "the removing party bears the burden of demonstrating fraudulent joinder", Alexander, 13 F.3d at 948-49, and that "any disputed questions and fact ambiguities in the controlling state law should be resolved in favor of the nonremoving party." Id. (quoting Carriere v. Sears Roebuck & Co., 893 F.2d 98, 100 (5th Cir. 1990)).

Analysis

Ordinarily, the question of fraudulent joinder would require that the Court inspect each of plaintiffs' theories of relief, determining under each count whether plaintiffs state a colorable cause of action under state law. In the context of the instant suit, however, this is unnecessary, as plaintiffs' complaint — at least with respect to the (non-diverse) pharmacy defendants— suffers from a fatal flaw. That flaw is the omission of any averment to the effect that defendant pharmacies sold or supplied OxyContin to plaintiffs. Absent such an allegation, of course, plaintiffs' complaint does not link plaintiffs' alleged injuries with the action (or inaction) of defendant pharmacies. Viewed in this manner, plaintiffs' complaint states no cause of action against defendant pharmacies. Under the standard as outlined above, then, defendant pharmacies have been fraudulently joined.

The significance of omitting any allegation that defendant pharmaceutical companies sold or supplied to plaintiffs the allegedly defective and unreasonably dangerous drug was illustrated perfectly by the United States District Court for the Southern District of New York in In re Rezulin Products Liability Litigation, 133 F.Supp.2d 272 (S.D.N.Y.2001). In In re Rezulin, a consolidation of sixteen (16) actions seeking recovery for personal injuries allegedly resulting from the use of the prescription diabetes medication Rezulin, the Judicial Panel on Multidistrict Litigation was presented with the precise question faced in the instant case: Do plaintiffs state a colorable cause of action versus non-diverse defendant pharmacies such that joiner of the defendant pharmacies is not fraudulent? The Multidistrict Panel in In re Rezulin answered in the negative, holding that under the state law of Mississippi, Alabama, Louisiana, Texas, and West Virginia the defendant pharmacies could not be liable under failure to warn, breach of express warranty, breach of implied warranty, or strict liability theories. Id.

Discussing the defendant pharmacies' liability under Mississippi law, the Multidistrict Panel identified a specific case (amongst the ones it was to decide), Armstrong v. Warner-Lambert Co., as suffering from an especially problematic defect. Specifically, the court noted:

Armstrong suffers from an added defect. Plaintiffs there make no allegations specifically against the defendant pharmacies, but instead lump them together with the manufacturers and attribute the acts alleged ... to the "defendants" generally. But they do not connect themselves to any alleged acts of the pharmacy defendants. Under any of the theories proffered in Armstrong, the complaint must allege that the defendant pharmacies sold or supplied Rezulin to plaintiffs. Without drawing that connection, plaintiffs have no way of showing that the pharmacy defendants' acts proximately caused the alleged injuries. Accordingly, the Armstrong defendants improperly joined the pharmacies as defendants.

In re Rezulin Litigation, 133 F.Supp.2d 272, 291 (S.D.N.Y.2001).

The instant case presents precisely the same scenario. As was the case in Armstrong, plaintiffs in the instant action do not, in large measure, single out the pharmacy defendants, nor do they describe with any degree of factual specificity the conduct giving rise to this suit. To the contrary, pharmacy defendants merit but one reference in plaintiffs' entire thirty-four (34) page complaint. Although plaintiffs' complaint commonly employs the generic term "defendants", the context and nature of the individual allegations make clear that only the drug companies are targeted. The lone statement even approximating a charge against the pharmacy defendants appears on page fifteen (15). There, paragraph sixty-five (65) alleges that "[p]harmacy [d]efendants inappropriately distributed and recommended OxyContin to residents of Pike County, Kentucky." [Record No. 1]. While this may indeed be true, plaintiff does not allege that any of the proposed representative plaintiffs themselves (or, for that matter, any members of the proposed Rule 23 classes) purchased or were otherwise supplied OxyContin by the defendant pharmacies. As was the case in the Rezulin litigation, this omission is fatal: absent such an averment "plaintiffs have no way of showing that the pharmacy defendants' acts proximately caused the alleged injuries." Id. Defendant pharmacies were improperly joined.

This result must obtain, as plaintiffs cannot have it both ways. On the one hand, plaintiffs' successful joinder of the pharmacy defendants would defeat this Court's diversity jurisdiction, a jurisdictional resolution presumably...