Opinion
7:01-CV-027-R.
May 4, 2001.
MEMORANDUM OPINION AND ORDER
On July 13, 2000, Plaintiff, Mona Mauck, filed suit in the 30th District Court of Wichita County, Texas against the Defendants, Warner-Lambert Company, John A. Caras, M.D., and Clinics of North Texas. On February 8, 2001, Defendant Warner-Lambert removed the case to this Court. Now before this Court is Plaintiff, Mona Mauck, Defendant John A. Caras, and Defendant Clinics of North Texas's Motions to Remand; Defendants John A. Caras and Clinics of North Texas's Objection to Conditional Transfer Order; and Plaintiff's Motion for an Expedited Ruling. For the reasons stated below, the Plaintiff's Motion to Remand is GRANTED and this case is hereby REMANDED to the 30th District Court of Wichita County, Texas.
Background
This case is one of a number of cases across the nation involving injuries resulting from the manufacture, distribution, and prescription of Rezulin. Plaintiff, Mona Mauck, alleges that she developed Liver Disease as a result of Defendant Dr. Caras's prescription of Rezulin for the Plaintiff's diabetes. Defendant Warner-Lambert manufactured the Rezulin that is alleged to have harmed the Plaintiff. In her state court Petition, Plaintiff brought the following claims against the Defendants: negligence on the part of Warner-Lambert and Dr. Caras; Strict Liability for Failure to Warn, Defective Design/Manufacture, and Product Liability on the part of Warner-Lambert; Breach of Express and Implied Warranties on the part of Wamer-Lambert and Dr. Caras; and Negligent and Fraudulent Misrepresentations on the part of Warner-Lambert. All claims against Dr. Caras are also brought against Clinics of North Texas under the theory of Respondeat Superior.
Plaintiff and Dr. Caras are residents of the state of Texas. Clinics of North Texas is a limited liability partnership with its principal place of business in Wichita County, Texas. Warner-Lambert is a Delaware Corporation with its principal place of business in Morris Plains, New Jersey. On February 8, 2001, Warner-Lambert removed this case to this Court on grounds of federal diversity jurisdiction, claiming that the amount in controversy was over the statutory minimum of $75,000 and that there was complete diversity of citizenship because Dr. Caras and Clinics of North Texas were fraudulently joined for the purpose of defeating diversity jurisdiction. On February 22, 2001, the Judicial Panel on Multidistrict Litigation issued a Conditional Transfer Order, transferring this case to the Southern District of New York for coordinated and consolidated pretrial proceedings with over 250 actions involving common questions of fact. As of this date, that order has not become effective.
Discussion
I Expedited Ruling vs. Deferred Ruling
In its Response to the Plaintiff's Motion to Remand, Warner-Lambert asks this Court to defer ruling on this Motion pending completion of the transfer of this case to the Southern District of New York as part of the Rezulin Multidistrict Litigation (MDL). Warner-Lambert argues that the interests of efficiency and consistency of pre-trial rulings will be furthered if the Southern District of New York decides this Motion because the issues contained herein are similar to those in other motions to remand currently pending in the Rezulin MDL. In support of this argument, Warner-Lambert cites two other Rezulin MDL cases with motions to remand pending, one of which involves the failure to submit a medical expert report within the 180-day deadline imposed by the Texas Medical Liability and Insurance Improvement Act: the primary ground on which Warner-Lambert based its fraudulent joinder claim in removing this case to this Court.
In a separate Motion For Entry of an Order on an Expedited Basis, the Plaintiff asks this Court to rule on her Motion to Remand before the Conditional Transfer Order becomes effective. Plaintiff's argument is grounded in the convenience of the parties and the "just and efficient conduct of the case." (Motion for Expedited Ruling p. 3). Specifically, Plaintiff points out that she is a 75 year-old widow in poor health who lives in Wichita Falls, Texas. Moreover, Dr. Caras and Clinics of North Texas are also in Wichita Falls, and virtually all discovery with respect to the claims will take place in Texas. Plaintiff argues that the burden of having to litigate this Motion in the Southern District of New York outweighs any judicial economy that might be gained by considering her Motion along with the two others that are currently pending before the MDL panel.
"The pendency of [a] transfer order does not in any way defeat or limit the authority of this Court to rule upon matters properly presented to it for decision." Boudreaux v. Metropolitan Life Ins. Co., 1995 WL 83788, 2 (citing, In re Air Crash at Paris, France, 376 F. Supp. 887 (JPML 1974)). "The decision whether to stay proceedings is discretionary, and the exercise of discretion is guided by the policies of justice and efficiency." Id. (citing, In re Ivy, 901 F.2d 7, 9 (2d Cir. 1990); H.R. Rep. No. 1130, 90th Cong., 2d Sess., reprinted in 1968 U.S. Code Cong. Admin. News 1898, 1900 ("It is expected that such transfer is to be ordered only where significant economy and efficiency in judicial administration may be obtained.")).
The fact that there are two other motions to remand pending before the Rezulin MDL, one of which involves a similar factual issue, does not compel this Court to exercise its discretion to defer consideration of this Motion so that the case can be transferred. Warner-Lambert has failed to explain how "significant economy and efficiency in judicial administration" would be obtained by making the Plaintiff and the other Defendants wait for the MDL panel in New York to consider this seemingly straightforward motion, which, if granted, will take this case out of the MDL altogether. Considering the parties involved, the policies of justice and efficiency weigh in favor of considering the Plaintiff's Motion in an expedited fashion so that, if the federal courts do not have subject matter jurisdiction over this case, it can be returned to the Texas courts for disposition. Therefore, this Court will proceed with a consideration of the merits of the Plaintiff's Motion to Remand.
II Fraudulent Joinder
When a case is removed to a federal district court, the removing party bears the burden of proving that the court has jurisdiction to hear the claim. See Dodson v. Spiliada Maritime Corp., 951 F.2d 40, 42 (5th Cir. 1992) (citing, B., Inc. v. Miller Brewing Co., 663 F.2d 545 (5th Cir. 1981)). When removal is based on allegations of fraudulent joinder, then the removing party must prove the existence of fraud by showing 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." Jernigan v. Ashland Oil, Inc., 989 F.2d 812, 815 (5th Cir. 1993) (citing,B., Inc., 663 F.2d 545). Here, Warner-Lambert does not allege outright fraud, but instead argues that there is no possibility that the Plaintiff can prevail in her claim against Dr. Caras and the Clinics of North Texas. Specifically, Warner-Lambert contends that the Plaintiff failed to comply with the timing requirements set forth in section 13.01(d) of the Texas Medical Liability and Insurance Improvement Act (MLIIA). Tex. Rev.Civ. Stat. Ann., art. 4590i, § 13.01(d). Section 13.01(d) requires a plaintiff in a medical malpractice case to furnish an expert report to the defendant health care provider within 180 days after the date on which the malpractice claim is filed.See id. Warner-Lambert claims, and the Plaintiff does not dispute, that the Plaintiff has not, to this date, provided Dr. Caras or Clinics of North Texas with an expert report. Therefore, Warner-Lambert argues, there is no possibility that the Plaintiff can prevail against the non-diverse Defendants, making the joinder of these parties fraudulent.
However, failure to comply with 13.01(d) does not automatically result in dismissal. Other provisions in section 13.01 raise the possibility that the Plaintiff could nevertheless prevail against Dr. Caras and Clinics of North Texas in state court. For example, pursuant to section 13.01(e), a court is only required to dismiss a claim due to non-compliance with 13.01(d) upon motion by the health care provider. See Tex. Rev.Civ. Stat. Ann., art. 4590i, § 13.01(e). In addition, section 13.01(g) permits a plaintiff who has missed the 13.01(d) deadline to request a 30 day grace period from the court for failure to comply due to accident or mistake, as long as the request is made before the defendant health care provider files its motion under 13.01(e). See Tex. Rev.Civ. Stat. Ann, art. 45901, § 13.01(g). Therefore, there is always the possibility that Dr. Caras and Clinics of North Texas will not make a motion under 13.01(e), or will fail to follow the proper procedures in making the motion. Similarly, the Plaintiff may file a motion for a grace period under 13.01(g) before the Defendants make their 13.01(e) motion.
Warner-Lambert fails to address the possibility that the non-diverse Defendants would fail to make a proper motion to dismiss, and it claims that the Plaintiff has not offered any evidence to show that her failure to file timely was due to accident or mistake. However, it is Wamer-Lambert, and not the Plaintiff, who has the burden of proving fraudulent joinder, and "[t]he burden of proving a fraudulent joinder is a heavy one."Green v. Amerada Hess Corp., 707 F.2d 201,205 (5th Cir. 1983). Although Plaintiff's failure to file an expert report may, in fact, doom her claim against Dr. Caras and Clinics of North Texas, "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." Id. (quoting, White v. World Finance of Meridian. Inc., 653 F.2d 147, 151 (5th Cir. 1981)).
Even if there was no possibility that the Plaintiff could prevail on a claim under the MLIIA, Warner-Lambert has also failed to demonstrate that there is no possibility that the Plaintiff can prevail on her breach of express warranty claim against Dr. Caras and Clinics of North Texas. Warner-Lambert states as a matter of fact that the Plaintiff's warranty claim is based on allegations of departure from the accepted standards of medical care and therefore, the claim must be brought under the MLIIA and would be barred by section 13.01(d)'s time limitations. However, while it is true that claims of negligence by a health care provider may not be "recast as DTPA [Deceptive Trade Practices Act] actions to avoid the standards set forth in the Medical Liability and Insurance Improvement Act," Texas law "does not preclude suits under the DTPA for knowing misrepresentation or breach of express warranty in cases in which a physician or health care provider warrants a particular result." Sorokolit v. Rhodes, 889 S.W.2d 239, 242-43 (Tex. 1994).
Plaintiff concedes in her Reply that MLIIA does not permit claims of breach of implied warranty against physicians. (Reply Brief in Support of Motion to Remand, n. 1). Therefore, the only remaining non-MLIIA claim is for breach of express warranty.
Warner-Lambert's conclusory assertion that the Plaintiff's breach of express warranty claim is in fact a negligence claim will not suffice to meet the heavy burden of proving fraudulent joinder. It is the "underlying nature" of a claim that determines whether the MLIIA applies, and identifying the "underlying nature" of a claim is a fact-based analysis. Id. at 242. In determining questions of fact, "the court must ordinarily evaluate all of the factual allegations in the plaintiff's state court pleadings in the light most favorable to the plaintiff, resolving all contested issues of substantive fact in favor of the plaintiff." Green, 707 F.2d at 205 (citing, B., Inc., 663 F.2d at 549). Plaintiff's state court Petition alleges that Dr. Caras expressly warrantied that Rezulin was safe, effective and well-accepted by patients. (Original Petition p. 17). Assuming this fact is true, there is a possibility that the Plaintiff can prevail in her claim for breach of express warranty against Dr. Caras and Clinics of North Texas. Therefore, these nondiverse Defendants were not fraudulently joined, there is no longer complete diversity in this case, and as a result, this Court lacks subject-matter jurisdiction and the case must be remanded to the state court.
III Other Issues Presented
Because this Court no longer has subject matter jurisdiction over this case, the Plaintiff's remaining grounds for remand and Dr. Caras and the Clinic of North Texas's Motion to Remand and Objections to the Conditional Transfer Order need not be considered.
Conclusion
For the foregoing reasons, Plaintiff's Motion to Remand is GRANTED and this case is hereby REMANDED to the 30th District Court of Wichita County, Texas.
It is so ORDERED.