Opinion
CIVIL ACTION NO. 20-3184
02-23-2021
JOSEPH ELLIOTT PORTER v. AHP SETTLEMENT TRUST
MEMORANDUM
Pro se litigant Joseph Elliott Porter brings this action against AHP Settlement Trust (the "Trust"), which was established under the Diet Drug Nationwide Class Action Settlement Agreement ("Settlement Agreement") to compensate Class Members who suffered from valvular heart disease ("VHD") due to use of Wyeth, Inc.'s diet drugs, Pondimin® and Redux™. Porter appears to bring this action on behalf of Class Member Miguel A. Larrieu whom he assisted in submitting a claim under the Settlement Agreement. Porter pleads the following in the complaint:
Wyeth, Inc. was known as American Home Productions Corporation prior to March 11, 2002. Pfizer, Inc. acquired Wyeth in 2009.
I was personally appointed Power of Attorney (POA) by a claimant with the AHP Trust. The executed and accepted POA agreement specifically detailed a percentage I was to receive based on a total settlement I initiated and ultimately settled. The Trust's counsel, Jules Henshall failed to disburse in accordance with the POA agreement and furthermore incorrectly
reviewed/read the claimant's 2002 qualifying echocardiogram thus the settlement was calculated on Matrix B instead of Matrix A, a significant difference in the amount the claimant and I were to receive.Porter is not an attorney, and Larrieu is not named as a plaintiff in this action.
The damages are twofold, the POA amount is $25,047.59, the Matrix A amount is $473,032, a total of $498,079.59 Punitive/compensatory damages are likely in order at the discretion of the jury.
In addition to the complaint, plaintiff has filed a "Motion/Request for Summary & Default Judgment." The Trust moves to dismiss the complaint for insufficient service of process under Rule 12(b)(5) of the Federal Rules of Civil Procedure and for failure to state a claim upon which relief can be granted under Rule 12(b)(6).
Because of the Court's ruling on the Trust's motions, it does not reach plaintiff's "Motion/Request for Summary & Default Judgment."
I
We accept the factual allegations in the complaint as true, construe the complaint in the light most favorable to plaintiff, and determine whether plaintiff may be entitled to relief under any reasonable reading of the complaint. Folwer v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009). We also take judicial notice of the Settlement Agreement and the judgment entered by the Court on June 8, 2018 after review of the Trust's resolution of Larrieu's claim under the Settlement Agreement, as set forth in Docs. Nos. 5327-28, In re: Diet Drugs Prods. Liab. Litig., Civil Action No. 99-20593 (June 8, 2018). See Conceicao v. Nat'l Water Main Cleaning Co., 650 F. App'x 134, 135 (3d Cir. 2016).
The amount of compensation to which a claimant is entitled under the terms of the Settlement Agreement is determined in accordance with two sets of benefit matrices — matrices "A" and matrices "B." The matrices generally classify a claimant based upon the severity of medical conditions, age when diagnosed, and the presence of other medical conditions that also may have caused or contributed to a claimant's VHD.
Plaintiff claims Larrieu is entitled to compensation under Matrix A-1. Matrix A-1 describes the compensation available to diet drug recipients with serious VHD who took the diet drugs for 61 days or longer and who did not have any of the other causes of VHD that made the B matrices applicable. In contrast, Matrix B-1 outlines the compensation available to diet drug recipients with serious VHD who were registered as having only mild mitral regurgitation by the close of the Screening Period or who took the drugs for 60 days or less. Matrix B-1 also outlines the compensation available to claimants who had factors that would make it difficult for them to prove that their VHD was caused solely by the use of the diet drugs. One such factor is whether the claimant suffered from mitral annular calcification.
In June 2015, Larrieu submitted a claim to the Trust that he suffered from severe mitral regurgitation and had surgery to repair or replace the aortic and/or mitral valve(s) following the use of Pondimin® and/or Redux™. To seek compensation under the Settlement Agreement, a claimant must have his physician answer a series of questions under oath concerning his or her medical condition. The questions correlate to the criteria for classification into one of the matrices. Larrieu submitted his claim with the sworn statement of a physician who reviewed his medical records, including three echocardiograms from December 2002, April 2012, and March 2015. Larrieu's physician answered various questions required for submission of his claim. Significantly, Larrieu's physician attested that he did not suffer from mitral annular calcification.
Upon receipt of Larrieu's claim, the Trust's auditing cardiologist reviewed his medical records and the findings of his attesting physician. She found evidence of mitral annular calcification in Larrieu's echocardiograms. She also referenced the notes of Larrieu's surgeon who observed "severe calcification of the posterior mitral valve leaflet" during his surgery. The surgeon noted that this observation formed the basis of his decision to replace the valve. The Trust's auditing cardiologist determined that there was no reasonable medical basis for the finding that Larrieu did not suffer from mitral annular calcification. Consequently, the Trust determined Larrieu was entitled to the lower compensation set forth in Matrix B-1.
Larrieu contested this determination in accordance with the procedure for review approved by the Court. The Trust forwarded Larrieu's claim to the auditing cardiologist for a second look. She again concluded that there was no reasonable medical basis for the finding that Larrieu did not have mitral annular calcification. Larrieu requested review by this Court as provided for in the Settlement Agreement. The Court issued an order to show cause why Larrieu was entitled to the relief he requested — specifically, why there was no reasonable medical basis for the Trust's finding that Larrieu suffered from mitral annular calcification.
The Court referred the matter to a Special Master who appointed a cardiologist as a Technical Advisor to assist with the development of the record. The Technical Advisor also observed no reasonable medical basis for finding that Larrieu did not have mitral annular calcification. The Court determined that Larrieu failed to meet his burden to show otherwise and denied his claim for compensation under Matrix A-1. The Court held that Larrieu was indeed entitled to compensation under Matrix B-1. Larrieu did not appeal.
Plaintiff subsequently commenced a separate action in the United States District Court for the District of South Carolina in which he claimed that the Trust incorrectly denied Larrieu compensation under Matrix A-1 due to the existence of mitral annular calcification. He also alleged that because he secured compensation under the Settlement Agreement pursuant to a power of attorney executed by Larrieu the Trust was required to pay to him a percentage of the settlement. The District of South Carolina transferred the action to this Court, which retains exclusive jurisdiction over all provisions of the Settlement Agreement. We dismissed the action without prejudice because plaintiff had not served the complaint on the Trust within 90 days as required by Rule 4(m) of the Federal Rules of Civil Procedure.
On May 7, 2020, plaintiff commenced a second action in the District of South Carolina. The claims he asserts are identical to the claims in the first action. The District of South Carolina also transferred this second action to this Court in accordance with this Court's jurisdiction over disputes arising from the Settlement Agreement. Plaintiff failed again to serve the complaint within 90 days as required by Rule 4(m). Instead, on September 21, 2020, he submitted an untimely request to the Trust's counsel to waive service of process. The Trust did not do so. Nonetheless, on November 12, 2020, plaintiff filed the pending "Motion/Request for Summary & Default Judgment." The Court ordered him to serve the complaint and warned that failure to do so would result in dismissal of the action.
Plaintiff filed an affidavit with the Court which stated that the summons and complaint were served on January 14, 2021 on "AHP SETTLEMENT TRUST c/o Semanoff Ormsby Greenberg & Torchia . . . by leaving with Terri Davis who as Legal Administration is authorized by appointment or by law to receive service of process." On January 25, 2021, Jules Henshell, Esq. from the law firm of Semanoff Ormsby Greenberg & Torchia, LLC responded to plaintiff's motion and moved to dismiss the action on behalf of the Trust on a number of grounds.
II
The Trust first moves for dismissal under Rule 12(b)(5) for insufficient service of process.
District courts have broad discretion whether to dismiss an action or to quash service of process upon determining a complaint was not properly served. Umbenhauer v. Woog, 969 F.2d 25, 30-31 (3d Cir. 1992). Our Court of Appeals has determined that it is not appropriate, however, to dismiss an action "when there exists a reasonable prospect that service may yet be obtained." Id. Where a reasonable prospect of obtaining service exists, district courts should "at most, quash service, leaving the plaintiffs free to effect proper service." Id.
Plaintiff attempted service by having the complaint left with a staff member at the office of the Trust's counsel. Service of process on a defendant's agent is valid where the defendant has authorized the agent to receive service. Ryan v. New Jersey State Bd. of Nursing, Civil Action No. 15-1250, 2016 WL 3533997, at *5 (D.N.J. June 28, 2016); Nyholm v. Pryce, 259 F.R.D. 101, 104 (D.N.J. 2009); see Fed. R. Civ. P. 4(e). Significantly, the authority to accept service on behalf of a defendant need not be explicit. Nyholm, 259 F.R.D. at 104. The authority may be implied from the relationship between the defendant and the alleged agent. Id. However, the plaintiff bears the burden of establishing the existence of such a relationship. Id.
Mr. Henshell, counsel for the Trust, represents that his firm is not authorized to accept service of process on behalf of the Trust and that plaintiff was informed of this before he attempted to serve the complaint. Plaintiff does not dispute that the Trust's counsel is not authorized to receive service of process on its behalf or that he was informed of this before he attempted to serve the complaint on January 14, 2021. He instead argues that a "Google search of the AHP Settlement Trust . . . states the building and former address of the Trust is 'permanently closed' with no forwarding address."
We reject any argument that a Google search showing closure of the Trust's office operates to excuse proper service under the Federal Rules of Civil Procedure. Plaintiff did not serve the complaint in the nearly seven months after he commenced this action on May 7, 2020. He also makes no attempt to demonstrate that the Trust's counsel is authorized either expressly or by nature of its relationship with the Trust to receive service of process on the Trust's behalf.
The Trust's current address and contact information are prominently displayed on its website along with its telephone numbers.
Accordingly, the Court will grant the motion of the Trust to dismiss for insufficient service of process under Rule 12(b)(5).
III
Even if, contrary to its position, the service of process is deemed sufficient, the Trust moves for dismissal under Rule 12(b)(6) on the ground that the Court had previously entered final judgment on the claim that Larrieu did not suffer from mitral annular calcification. Thus, the Trust asserts the present claim is barred by the doctrine of res judicata.
For a claim to be precluded from subsequent litigation on the ground of res judicata, there must be "(1) a final judgment on the merits in a prior suit involving (2) the same parties or their privies and (3) a subsequent suit based on the same cause of action." Elkadrawy v. Vanguard Grp., Inc., 584 F.3d 169, 172 (3d Cir. 2009). Judicially approved settlement agreements that resolve a claim may be considered final judgments on the merits of that claim for purposes of claim preclusion. Conceicao v. Nat'l Water Main Cleaning Co., 650 F. App'x 134, 135 (3d Cir. 2016).
As noted above, the Trust denied Larrieu's claim for Matrix A-1 compensation on the ground that its auditing cardiologist determined that there was no reasonable medical basis for the finding that he did not suffer from mitral annular calcification. Larrieu sought the Court's review. The Court issued an order to show cause why he was entitled to Matrix A-1 benefits, after which his medical records were submitted for review to a Special Master appointed by the Court.
The Special Master appointed a Technical Advisor who reviewed Larrieu's medical records, including his echocardiograms, and determined that there was no reasonable medical basis for the finding that he did not suffer mitral annular calcification. Thereafter, the Court issued an order that Larrieu was entitled to benefits under Matrix B-1 consistent with the Trust's determination that the existence of mitral annular calcification precluded him from recovering under Matrix A-1. Larrieu did not appeal the order.
With this action plaintiff seeks to litigate collaterally a claim identical to the one resolved by this Court's June 8, 2018 judgment that there is no reasonable medical basis for the finding that Larrieu did not suffer mitral annular calcification. As plaintiff "initiated and ultimately settled" Larrieu's claim for compensation from the Trust, the judgment was among the "same parties or their privies."
If service of the complaint were proper, the Trust is entitled to dismissal of plaintiff's claim for benefits under Matrix A-1 for failure to state a claim upon which relief can be granted under Rule 12(b)(6).
IV
Again if service of the complaint is deemed sufficient, the Trust moves to dismiss plaintiff's claim for a percentage of the claim he "initiated and ultimately settled" for Larrieu under the terms of the Settlement Agreement.
Under the Settlement Agreement, attorneys who secure compensation on behalf of a Class Member pursuant to contingency fee arrangements are entitled to the payment of their fees directly from the Trust. See Settlement Agreement § VIII.E. Plaintiff, however, is not an attorney. The Settlement Agreement does not provide for the payment of any fees to a non-attorney for assistance with the submission of a claim to the Trust. See id. Even if plaintiff were entitled to a percentage of Larrieu's settlement per the power of attorney, the Trust is not a party to it. The Trust was under no obligation to pay plaintiff for any assistance he provided to Larrieu to secure compensation under the Settlement Agreement.
Assuming service of the complaint is proper, the Trust is entitled to dismissal of plaintiff's claim to the extent he seeks a percentage of Larrieu's settlement under Rule 12(b)(6).
While the Court of Appeals has cautioned in Umbenhauer, 969 F.2d at 30-31 that it is inappropriate to dismiss a complaint "where there exists a reasonable prospect that service may yet be obtained," the situation here calls for dismissal because there is no reasonable prospect that plaintiff can succeed on the merits. Proper service would be a futile act. We have found no Court of Appeals decision which ruled against dismissal of a complaint under the circumstances presented.