Opinion
NO. 4:01CV255-PB
January 25, 2002
MEMORANDUM OPINION
This cause is before the Court on the plaintiffs' Motion to Remand. The Court, having considered the motions, the responses thereto, and the briefs and authorities cited, is prepared to rule. The Court finds as follows, to-wit:
FACTUAL BACKGROUND
The plaintiffs, all Mississippi residents, filed this action in the Circuit Court of Leflore County, Mississippi, on September 11, 2001, against Pfizer, Inc., and Warner-Lambert Company alleging various theories of recovery arising out of the use of Rezulin, a drug therapy for type 2 diabetes. The plaintiffs also named as defendants Lee Miers and Karen Massingale-Ewan, the sales representatives responsible for promoting the drugs to physicians, and Haire Drug Center, Sanders Pharmacy and Quality Drugs, the pharmacies that filled the prescriptions for the drugs and dispensed it to the plaintiffs. Pfizer and Warner-Lambert are a foreign corporations for diversity purposes. All other defendants are domiciliaries of the state of Mississippi and are, as such, non-diverse. The defendants' removed the action to this Court based on diversity of citizenship pursuant to 28 U.S.C. § 1332 arguing that each of the Mississippi defendants were fraudulently joined.
The theories of recovery advanced by the plaintiffs include, inter alia, breach of warranty (express and implied), strict liability, negligence, misrepresentation and conspiracy/fraud.
The plaintiffs now seek remand of the action to the Circuit Court of Leflore arguing that this Court lacks the complete diversity required to assert subject matter jurisdiction. The defendants oppose the motion and urge this Court to defer ruling on it pending finalization of the conditional transfer order issued in this case by the Judicial Panel on Multidistrict Litigation ("MDL"). Hundreds of Rezulin cases have been, and are now, being transferred to the Southern District of New York for disposition.
The Honorable Lewis A Kaplan, United States District Judge for that district has been designated the transferee judge.
In the alternative, the defendants argue that all the non-diverse defendants — the sales representatives and pharmacies — were fraudulently joined and, as such, their citizenship for diversity purposes should be disregarded by the Court.
LEGAL ANALYSIS
Federal courts are courts of limited jurisdiction as defined by the constitution and statute. See generally B., Inc. v. Miller Brewing Co., 663 F.2d 545 (5th Cir. 1981). Indeed, this Court is well advised to "be certain of its jurisdiction before embarking upon a safari in search of a judgment on the merits." B, Inc., 663 F.2d at 548.
As the removing party, the defendants must bear the burden of demonstrating that this action is properly before the Court. Id. at 549; See also Village Fair Shopping Co. v. Sam Broadhead Trust, 588 F.2d 431 (5th Cir. 1978); Ray v. Bird and Son Asset Realization Co., Inc., 519 F.2d 1081 (5th Cir. 1975). Similarly, where "fraudulent joinder" is alleged, the burden rests upon the removing party to prove the fraud. B., Inc., 663 F.2d at 549; Yawn v. Southern Railway Co., 591 F.2d 312 (5th Cir. 1979). The removing party must do so by clear and convincing evidence. Rogers v. Modern Woodmen of America, 1997 WL 206757, *2 (N.D.Miss. 1997). The clear issue, then, is whether the defendants have carried their burden. For, if they can demonstrate that the pharmacies and the territorial managers were fraudulently joined, then their Mississippi citizenship will be disregarded for diversity purposes and the Court may retain jurisdiction. If not, however, diversity is destroyed and the case must be remanded.
Diversity actions are removable ". . . 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." 28 U.S.C. § 1441(b) . . . If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." 28 U.S.C. § 1447(c).
In order to prove that a party has been fraudulently joined, the removing party must demonstrate either that: (1) 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 (2) there has been outright fraud in the plaintiff's pleadings of jurisdictional facts. B, Inc. 663 F.2d at 549; Keating v. Shell Chemical Co., 610 F.2d 328 (5th Cir. 1980); Bobby Jones Garden Apartments v. Suleski, 391 F.2d 172, 177 (5th Cir. 1968); Parks v. New York Times Co., 308 F.2d 474, 478 (5th Cir. 1964); cert. denied 376 U.S. 949, 84 S.Ct. 964, 11 L.Ed.2d 969 (1964).
The defendants have not alleged outright fraud in the pleadings with regard to jurisdictional facts or the citizenship status of the non-diverse defendants as Mississippi domiciliaries for diversity purposes. Thus, the only question remaining is whether the defendants have demonstrated that there is no possibility that the plaintiff would be able to establish a cause of action against the sales representatives or pharmacies in state court. This is a heavy burden indeed. For,
if there is even a possibility that a state court would find a cause of action stated against any one of the named in-state defendants on the facts alleged by the plaintiff, then the federal court must find that the in-state defendants have been properly joined, that there is incomplete diversity, and that the case must be remanded to the state courts.
B, Inc. 663 F.2d at 550 (emphasis added) (other citations omitted). In analyzing whether such a possibility of a claim exists, all disputed questions of fact and all ambiguities in controlling state law are to be resolved in favor of the non-removing party. Carriere v. Sears Roebuck Co., 893 F.2d 98, 100 (5th Cir. 1990). It is not required of this Court to reach the merits of whether such a cause of action will actually, or even probably, prevail. Burden v. General Dynamics Corp., 60 F.3d 213, 217 (5th Cir. 1995). Rather, this Court need only decide whether it is possible that a state court find a cause of action. Id. The existence of such a cognizable claim is to be determined by reference to the allegations contained in the plaintiff's state court pleadings. Ironworks Unlimited v. Purvis, 798 F. Supp. 1261, 1263 (S.D.Miss. 1992).
This Court, on nearly identical facts, has previously ruled that a cause of action against a pharmacy may possibly be maintained in Mississippi on a breach of warranty theory. Haynes v. Parke-Davis, No. 2:00cv263P-B, at *4 (N.D.Miss. Jan. 3, 2001). In that case, this Court recognized that while the allegations against the pharmacies were sparse, Mississippi's Uniform Commercial Code recognizes an implied warranty by the seller that the goods are fit for their ordinary and intended use and that whether such a warranty was breached by the pharmacy, as alleged in the Complaint, was a question of fact better resolved by a state court at a later stage of the proceeding. Haynes, No. 2:00CV263P-B, ay *4.
This Court also noted its reliance on the reasoning advanced by Judges Wingate and Lee in their decisions remanding Hodges v. Wyeth-Ayerst Laboratories, No. 3:00CV254WS (S.D.Miss. May 18, 2000), Dantzler v. American Home Products Corporation, No. 4:00CV68LN (S.D.Miss. Sept. 21, 2000), and Rankin v. Jansen Pharmaceutical Inc., No. 5:00CV190LN (S.D.Miss. Oct. 31, 2000). As Judges Wingate and Lee noted in those cases, the potential continued viability of traditional common law claims following enactment of the Mississippi Products Liability Act, Miss. Code Ann. § 11-1-63, as well as the fact that Mississippi has not addressed the relevance of the learned intermediary doctrine in the particular context at issue, militate toward remand.
The defendants, however, rely heavily on Judge Kaplan's analysis in his prior rulings in Rezulin cases denying remand. In Re Rezulin Prodcuts Liability Litigation, 133 F. Supp.2d 272 (S.D.N.Y. 2001) (Rezulin I); In Re Rezulin Prodcuts Liability Litigation, 168 F. Supp.2d 136 (S.D.N.Y. 2001) (Rezulin II). According to Judge Kaplan:
[J]ust as there is no basis for finding consumer reliance on pharmacists, so too there is no basis for adopting the view that a pharmacist is a retail merchant like any other with respect to the sale of prescription drugs. A pharmacist's sale of prescription drugs are not attributable to his or her marketing the properties of the drugs. They are attributable to physicians' prescriptions.
Rezulin I, 133 F. Supp.2d at 292. Judge Kaplan went on to state that "[o]ne of the purposes of imposing . . . liability for breach of warranty on retailers is to encourage retailers to pressure manufacturers to make safer products. Yet this goal is lost on pharmacists, who have little or no impact on a manufacturer's marketing of prescription drugs." Id. On substantially these bases, Judge Kaplan concluded that remand should be denied. Id.
This Court does not necessarily disagree with Judge Kaplan's reasoning. The Court does not now, nor did it in Haynes, adopt the position that a breach of warranty or any other claim should be available against a pharmacy. Nor does the Court now speculate on the wisdom of allowing such an action against a pharmacy or whether it would be in line with sound public policy. Indeed, if this Court were to visit the issue on a motion for summary judgment, for instance, or within the context of a motion with respect to which the Court was proceeding pursuant to its original jurisdiction, it is possible — perhaps likely — that a finding directly in line with Judge Kaplan's would be the result.
The Court need not go so far, however. Succinctly stated by the Eleventh Circuit:
For a Plaintiff to present an arguable claim against an in-state defendant and, therefore, to require a case removed to federal court to be remanded to state court, the plaintiff need not show that he could survive in the district court a motion for summary judgment filed by that in-state defendant . . . [T]here need only be "a reasonable basis for predicting that the state law might impose liability on the facts involved."
Crowe v. Coleman, 113 F.3d 1536, 1541-42 (11th Cir. 1997) (citing B, Inc., 663 F.2d at 550). See also Rankin, No. 5:00CV190LN at *2 n. 1. Thus, the Court simply recognizes that, against the backdrop of the current law in Mississippi and expanded role of pharmacies generally, the viability of a cause of action against a pharmacy, such as is alleged in the Complaint, while perhaps doubtful, is neither too "remote" nor "fanciful" to deny remand. See Badon v. RJR Nabisco, Inc., 236 F.3d 282, 286 n. 4 (5th Cir. 2000).
The Court notes that the role of the pharmacy is no longer that of a mere mechanical conduit responsible only for accurately counting and filling prescriptions. See, e.g., Riff v. Morgan Pharmacy, 508 A.2d 1247, 1251 (1986) (rejecting argument that a pharmacy is no more than "a warehouse for drugs and a pharmacist has no more responsibility than a shipping clerk who must dutifully and unquestioningly obey the written orders of omniscient physicians'). Indeed, it is no secret that pharmacies have increasingly played an ever expanding and more active role in health care delivery in recent years. Common activities of pharmacies, for instance, now include participation in the drug selection process through formulary development and a role in drug therapy. See generally, David B. Brushwood, The Professional Capabilities and Legal Responsibilities of Pharmacists: Should "Can" Imply "Ought"?, 44 Drake L. Rev. 439 (1996); R. Paul Asbury, Pharmacy Liability: The Doors of Litigation are Opening, 40 Santa Clara L. Rev. 907 (2000).
In short, this Court declines to make an Erie guess as to whether a Mississippi court might recognize a cause of action in the instant case. Consequently, whether the "uniform national rule" or "clear national consensus" the defendants cite so feverishly would be adopted by the Mississippi Supreme Court, or is the most sensible view as applied to these facts is not for this Court to surmise.
The defendants rely on, what they term, a "uniform national rule" or "national consensus" that pharmacies cannot be liable for anything outside inaccurately filling prescriptions. The defendants complain that no Mississippi authority has been cited by the plaintiffs to the contrary. While in some contexts, such an omission could serve to facilitate the denial of a motion where other factors are at play, the Court notes that the defendants have also failed to cite any Mississippi authority in support of the proposition. The Court reminds the defendants that they carry the burden on a motion to remand and all ambiguities are construed in favor of the plaintiff.
In light of this Court's previous decision in Haynes, the authorities relied upon therein, as well as the increased nature of participation and responsibility of pharmacies and pharmacists in the growing complexities of health care delivery, this Court cannot conclude that there is no possibility that Mississippi would recognize a cause of action against a pharmacy under current law. Suffice it to say that the Court, as in Haynes, is of the view that the issue is best resolved by a Mississippi court at a later stage of the proceeding where the potential exists that it can be settled by a Mississippi judge, or, eventually, by the Mississippi Supreme Court. Indeed, the Court supposes that if Mississippi decided to depart from a so-called "uniform national rule," the rule would be neither "uniform," nor "national."
CONCLUSION
After careful consideration, the Court finds that the plaintiff's Motion to Remand is well taken and should be granted. A separate order in accordance with this opinion will be so entered.