Opinion
Civil Action No. 04-2234-CM.
November 1, 2004
MEMORANDUM AND ORDER
This matter comes before the court on plaintiffs' Motion to Remand (Doc. 8), plaintiffs' Motion for Leave to File Supplemental Suggestions Regarding Remand (Doc. 21), and defendants' Motion to Stay (Doc. 10).
As an initial matter, the court grants plaintiffs' Motion for Leave to File Supplemental Suggestion Regarding Remand (Doc. 21). The court has reviewed the supplemental suggestions in ruling on the instant motions.
I. Background
Plaintiffs filed this action on or about April 1, 2004, in the District Court of Johnson County, Kansas, alleging injuries and damages resulting from the alleged purchase and ingestion of the diet drugs Pondimin and/or Redux. Plaintiffs have brought product liability, negligent misrepresentation, negligence, and breach of warranty claims against all defendants. Plaintiffs are citizens of Kansas. Defendants Wyeth and Wyeth-Ayerst Pharmaceuticals, Inc. are citizens of Delaware, licensed to do business in Kansas, but with their principal places of business in New Jersey and Pennsylvania, respectively. Defendants Bradley K. Evers, Edward D. Harris, and Randall S. Swetnam are citizens of Missouri. Defendants Nancy J. Forlenza, John A. Cory, and Dennis A. Smith are residents of Kansas. Thus, there is no diversity of citizenship amongst the parties.
On May 24, 2004, defendants removed the matter to federal court. In the Notice of Removal, defendants claimed that defendants Forlenza, Cory, and Smith, all current or former detail (sales) representatives of defendant Wyeth, had been fraudulently joined in the litigation in order to defeat diversity jurisdiction. On June 23, 2004, plaintiffs filed the instant Motion to Remand. On July 7, 2004, defendants filed their opposition to the Motion to Remand and a Motion to Stay the case pending transfer to the diet drugs multidistrict proceeding in the United States District Court for the Eastern District of Pennsylvania (the MDL Court).
II. Standard for Removal
A civil action is removable only if a plaintiff could have originally brought the action in federal court. 28 U.S.C. § 1441(a). The court is required to remand "if at any time before final judgment it appears that the district court lacks subject matter jurisdiction." 28 U.S.C. § 1447(c). Because federal courts are courts of limited jurisdiction, the law imposes a presumption against federal jurisdiction, Frederick Warinner v. Lundgren, 962 F. Supp. 1580, 1582 (D. Kan. 1997) (citing Basso v. Utah Power Light Co., 495 F.2d 906, 909 (10th Cir. 1974)), and requires a court to deny its jurisdiction in all cases where such jurisdiction does not affirmatively appear in the record. Ins. Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702 (1982). The burden is on the party requesting removal to demonstrate that the court has jurisdiction. Laughlin v. Kmart Corp., 50 F.3d 871, 873 (10th Cir. 1995). Moreover, in establishing diversity jurisdiction, "[b]oth the requisite amount in controversy and the existence of diversity must be affirmatively established on the face of either the petition or the removal notice." Id. The court must resolve any doubts concerning removability in favor of remand. J.W. Petroleum, Inc. v. Lange, 787 F. Supp. 975, 977 (D. Kan. 1992).
III. Discussion
A. Fraudulent Joinder
The only basis upon which defendants claim that this court has jurisdiction is that Nancy J. Forlenza, John A. Cory, and Dennis A. Smith, the only non-diverse defendants, were fraudulently joined in order to avoid diversity jurisdiction. Because it is undisputed that defendants Forlenza, Cory, and Smith are Kansas residents whose inclusion in this case would destroy diversity subject matter jurisdiction, the court begins by focusing on the fraudulent joinder issue to determine whether remand is necessary. Crow v. State Indus., 2003 WL 1053945, at *3 (D. Kan. Feb. 27, 2003) (citing Triggs v. John Crump Toyota, Inc., 154 F.3d 1284, 1287 (11th Cir. 1998) ("Fraudulent joinder is a judicially created doctrine that provides an exception to the requirement of complete diversity.")).
It is also undisputed that plaintiffs have met the $75,000 amount in controversy required by 28 U.S.C. § 1442.
It has long been held that the 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 (1921). "Fraudulent joinder is a term of art, it does not reflect on the integrity of plaintiff or counsel, but rather exists regardless of the plaintiff's motives when the circumstances do not offer any other justifiable reason for joining the defendant." Barger v. Bristol-Myers Squibb Co., 1994 WL 69508, at *3 (D. Kan. Feb. 25, 1994) (citing Chilton Private Bank v. Norsec-Cook, Inc., 99 B.R. 402, 403 (N.D. Ill. 1989)).
A non-diverse defendant is fraudulently joined when no cause of action is pleaded against him or her, when the cause of action pleaded is defective as a matter of law, or when the pleaded cause of action does not exist in fact. Roe v. Gen. Am. Life Ins. Co., 712 F.2d 450, 452 (10th Cir. 1983). Fraudulent joinder is also present when the plaintiff has no good-faith intention to prosecute the action against the non-diverse defendant or to seek a joint judgment against him or her. Barger, 1994 WL 69508, at *3 (citing Abels v. State Farm Fire Cas. Co., 770 F.2d 26, 29 (3d Cir. 1985)). If there is a possibility, however, that a state court would recognize the cause of action pleaded against the non-diverse defendant, then joinder is proper and remand is required. Id. (citing Coker v. Amoco Oil Co., 709 F.2d 1433, 1440-41 (11th Cir. 1983)).
The removing party must show that joinder is fraudulent and does so only if it offers proof which compels the conclusion that the joinder was without right or made in bad faith. Id. (citing Frontier Airlines, Inc. v. United Air Lines, Inc., 758 F. Supp. 1399, 1405 (D. Colo. 1989)). This standard is more exacting than that for dismissing a claim under Fed.R.Civ.P. 12(b)(6). To prove a fraudulent joinder allegation, the removing party must not only prove the failure to state a claim upon which relief may be granted, but must also "`demonstrate that there is no possibility that [plaintiff] would be able to establish a cause of action against the joined party in state court.'" Crow, 2003 WL 1053945, at *3 (quoting Montano v. Allstate Indemnity, 2000 WL 525592, at **1-2 (10th Cir. 2000)).
Plaintiffs have sued defendants Forlenza, Cory, and Smith, who are current or former detail representatives of defendant Wyeth, claiming that they improperly promoted and detailed Pondimin and Redux by promoting its usage in a manner beyond that approved by the Federal Drug Administration. Plaintiffs also alleged that defendants Forlenza, Cory, and Smith overstated the benefits of Pondimin and Redux and understated or withheld information regarding their risks. Defendants argue that plaintiffs have not, and can not, state a viable cause of action against defendants Forlenza, Cory, and Smith under Kansas law. Defendants further argue that any claims against defendants Forlenza, Cory, and Smith have no chance of success because plaintiffs have failed to plead essential elements of the claims. For instance, defendants claim that plaintiffs have failed to allege justifiable reliance on a material misrepresentation in order to state a claim for negligent misrepresentation. However, defendants have not persuaded the court that there is no possibility that the complaint could be amended to cure any defect in pleading. "[A]ny doubts arising from defective or inartful pleading should be resolved in favor of retention of state court jurisdiction." Barger, 1994 WL 69508, at *4.
Resolving all disputed questions of fact and all ambiguities in the controlling law in favor of plaintiffs, the court cannot find, at this point in the litigation, that plaintiffs have failed to state a cause of action against defendants Forlenza, Cory, and Smith. While the claims against defendants Forlenza, Cory, and Smith may be more tenuous than those asserted against the other defendants, the court is not prepared to rule at this early juncture that such claims have no chance of success. The court therefore concludes that defendants have failed to show that joinder of defendants Forlenza, Cory, and Smith was fraudulent. Accordingly, the court finds that complete diversity does not exist, and the case should be remanded to state court.
B. Stay Pending Transfer to MDL Court
Because the court has determined that this case should be remanded to the state court, defendants' Motion to Stay pending transfer to the MDL Court is moot. IT IS THEREFORE ORDERED that plaintiffs' Motion to Remand (Doc. 8) and plaintiffs' Motion for Leave to File Supplemental Suggestions Regarding Remand (Doc. 21) are granted. The court directs the clerk of the court to remand this case to the District Court of Johnson County, Kansas.
In their Motion to Remand, plaintiffs originally requested attorney's fees and sanctions against defendants. In subsequent briefing, plaintiffs withdrew their request for attorney's fees and sanctions. The court thus makes no finding regarding those issues.
IT IS FURTHER ORDERED that defendants' Motion to Stay (Doc. 10) is denied as moot.