Opinion
Civil Action No. 03-0105 Section: E/1
February 19, 2003
ORDER AND REASONS
Three motions are before the court in this matter: defendant Bristol-Myers Squibb Co.'s ("Squibb") motion to temporarily stay pending transfer to the MDL-1477 (Rec. Doc. No. 2); plaintiff Shawn Ochoa's motion to stay transfer to the MDL-1477 (Rec. Doc. No. 4) and motion to remand. Rec. Doc. No. 5. All motions are opposed. The matter was heard at oral argument on February 19, 2003.
BACKGROUND
This is a personal injury/products liability case regarding the prescription drug Serzone®, in Federal court on removal from 24th Judicial District Court for Jefferson Parish, based on diversity jurisdiction. The parties are plaintiff Shawn Ochoa, a Louisiana resident; Bristol-Myers Squibb Co., a foreign corporation; Walgreen Louisiana Co., Inc., dba Walgreens Pharmacy, a Louisiana domestic corporation; and, Dr. Mary Crossley-Miller, acknowledged to be a Louisiana resident.
Defendant Bristol-Myers Squibb Co. ("Squibb") is a pharmaceutical company that manufactured and marketed the prescription drug Serzone® to treat depression. Serzone® was first introduced to the U.S. market with no warning of liver toxicity, although pre-clinical trials indicated the possibility of liver damage in some patients. The FDA subsequently required Squibb to include a warning on the label. The new label warned of "rare reports of liver necrosis and liver failure, in some cases leading to liver transplantation and/or death." Six months later, the FDA required Squibb to remove the word "rare" from the warning statement, and finally to place a "Black Box" warning on the safety label. In Canada, Squibb was required to issue special notices directly to health care providers.
Dr. Crossley-Miller prescribed Serzone® to treat Ms. Ochoa between November, 2000, and January, 2002. She alleges that as a result of her use of Serzone®, she developed life-threatening medical conditions, including significant liver injuries. Ms. Ochoa filled her prescriptions at pharmacies owned by defendant Walgreen. Claiming damages as a result of her use of Serzone®, Ochoa alleges various state law causes of action against all defendants, including medical malpractice claims against the prescribing physician, redhibition and breach of implied warranty claims against the pharmacy, and products liability claims against Squibb.
Squibb removed on diversity grounds claiming that the non-diverse defendants were fraudulently joined to defeat diversity jurisdiction, and one day later, moved for a stay pending transfer to the MDL in federal court in West Virginia. Plaintiff subsequently filed a motion to remand, and to stay the transfer to the MDL court.
ANALYSIS
In an action removed to federal court based on diversify jurisdiction, it is the burden of the removing party to prove that federal jurisdiction exists, that is, that non-diverse defendants are fraudulently joined.B., Inc. v. Miller Brewing Co. 663 F.2d 545, 549 (5th Cir., Unit A, Dec. 1981) (citations omitted). The burden is a heavy one. Id.
In order to establish that an in-state defendant has been fraudulently joined, 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. (emphasis in original, citations omitted). The Fifth Circuit more recently stated the law on fraudulent joinder as follows:
In determining the validity of a claim of fraudulent joinder, the district court "must evaluate all of the factual allegations in the light most favorable to the plaintiff, resolving all contested issues of substantive fact in favor of the plaintiff." The court must also resolve all ambiguities in the controlling state law in the plaintiff's favor. If the plaintiff has any possibility of recovery under state law against the party whose joinder is questioned, then the joinder is not fraudulent in fact or law. We do not determine whether the plaintiff will actually or even probably prevail on the merits of the claim, but look only for the possibility that the plaintiff might do so.Burden v. General Dynamics Corp., 60 F.3d 213, 216 (5th Cir. 1995) (citations omitted); see also Travis v. Irby, 2003 WL 23102 at *2 (5th Cir. (Miss.) Jan. 17, 2003) (To establish fraudulent joinder, "the removing party must prove either that there has been actual fraud in the pleading of jurisdictional facts or that there is absolutely no possibility that the plaintiff will be able to establish a cause of action against that party in state court." (Citation omitted.))
Therefore, a party alleging fraudulent joinder must prove that there is absolutely no possibility that the plaintiff would be able to establish a cause of action against an in-state defendant in state court, essentially the same standard required to succeed on a Rule 12(b)(6) motion to dismiss. See, e.g., Erdey v. American Honda Co., Inc., 96 F.R.D. 593 (M.D. La. 1983); Doe v. Cutter Biological, 774 F. Supp. 1001 (E.D. La. 1991); Perry v. McNulty, 794 F. Supp. 606 (E.D. La. 1992); Kelly v. Danek Medical, Inc., 1994 WL 321074 (E.D. La.); Ohler v. Purdue Pharma, L.P., 2002 WL 88945 (E.D. La.).
The issue of fraudulent joinder of a treating physician has been addressed on a number of occasions in the Eastern District of Louisiana. The Louisiana Medical Malpractice Act, La. Rev. Stat. § 40:1299.47(B)(a)(i) prohibits any action against a covered health care provider until the claimant's proposed complaint has been presented to a medical review panel. Nevertheless, as the district court concluded inCutter that "[p]rocedural prematurity is not a conceptually accurate measure of fraudulent joinder if the claim or theory asserted can be said to have plausible substantive merit. Prematurity does not trump viability." Id. at 1004; see also Erdey, 96 F.R.D. at 597 (Although the medical malpractice action against the medical defendants was premature, it "nevertheless stated a cause of action against those defendants.");Perry, 794 F. Supp. at 608 (Even though plaintiff is procedurally barred at that time from proceeding against the non-diverse medical defendants, "she certainly has stated a cause of action that could impose liability on the Louisiana defendants."); Kelly, 1994 WL 321074 *2 (Even though plaintiffs chose to follow Louisiana law by not naming medical malpractice defendants in initial lawsuit, medical malpractice allegation included against those non-diverse and not yet named medical defendants stated a cause of action that might impose liability on them.); Ohler, 2002 WL 88945 *5 (collecting Eastern District cases that have followed the rationale in Erdey.)
Squibb's memorandum in support of its motion to stay pending transfer argues fervently that in the interests of judicial economy, avoiding inconsistent or conflicting pretrial rulings, and avoiding duplicative proceedings, this court should stay the case and ultimately transfer it to the MDL court. Moreover, defendant argues that plaintiff will not be prejudiced, while defendant will be greatly prejudiced by remand. Squibb cites to literally pages of cases in Louisiana, Texas, and throughout the country in which courts have "deferred" to MDL courts in actions against drug manufacturers. In the two Eastern District of Louisiana cases Squibb cites in which the court issued a stay order pending transfer to the MDL in Serzone® litigation, there are no non-diverse defendants and no jurisdictional issue.
Squibb argues here that the prescribing physician was fraudulently joined because plaintiff has not yet filed a medical review panel proceeding against the doctor. Squibb notes that in the Western District of Louisiana, courts generally deny remand in this situation, reasoning that the plaintiff has no cause of action against a doctor if a medical review panel has not been initiated. Squibb also argues that this court has the discretion to not decide the jurisdictional issue at this time, but to stay and transfer the case, along with the pending motion to remand, to the MDL court which then can decide the motion to remand along with hundreds of other similar motions to remand.
Plaintiff's memorandum in support of remand addresses only the diversity of the prescribing physician, noting that if the physician is not fraudulently joined, the issue of the joinder of the pharmacy is moot. Plaintiff also argues that in the Eastern District of Louisiana, every judge in the 130 Rezulin® cases filed in this district followed J. McNamara's reasoning in Ritchie v. Warner-Lambert Co., No. 01-1001 (E.D.La. 05/02/01), and remanded the cases. Finally, plaintiff argues that in its answer in Serzone® cases pending in other jurisdictions, Squibb has pointed the finger at the prescribing physicians by invoking the "`learned intermediary doctrine'" as an affirmative defense. According to plaintiff, Squibb cannot now argue that the prescribing physician has been fraudulently joined when its pleadings in other Serzone® cases present the potential argument that the blame for plaintiffs injuries lies with the prescribing physician. Finally, plaintiff asks that the court assess attorney's fees and costs in her favor as sanction for Squibb's "fraudulent" removal of this case.
CONCLUSION
As a general rule, federal courts in this district have held that even if a plaintiff's suit against a defendant doctor is procedurally premature, it nevertheless states a potentially viable claim against those defendants in state court, thus survives defendant's allegation of fraudulent joinder. In essence, Bristol-Myers Squibb Co. has not shown that there is absolutely no possibility that the plaintiff will be able to establish a cause of action against the prescribing physician in state court. There is no federal diversity jurisdiction. This alone is enough to justify remand.
Accordingly,
IT IS ORDERED that defendant Bristol-Myers Squibb Co.'s motion to temporarily stay these proceedings pending transfer to the MDL-1477 be and is hereby DENIED;
IT IS FURTHER ORDERED that plaintiff Shawn Ochoa's motion to remand be and is hereby GRANTED; and,
IT IS FURTHER ORDERED that plaintiff Shawn Ochoa's motion to stay transfer to the MDL panel be and is hereby DISMISSED AS MOOT.
IT IS FURTHER ORDERED that this matter be and is hereby REMANDED to 24th Judicial District Court for Jefferson Parish; each party to bear its own costs.