This post is from the non-Reed Smith side of the blog.
There are two key rulings in Addelson v. Sanofi S.A., 2016 WL 6216124 (E.D. Mo. Oct. 25, 2016). Neither is novel or complex. The court can’t exercise personal jurisdiction over an out-of-state defendant on claims made by an out-of-state plaintiff and said out-of-state plaintiff can’t be used to defeat federal diversity jurisdiction. Their significance lies more in the fact that they were issued by the Eastern District of Missouri.
Defendant Sanofi (the U.S. subsidiary) is a Delaware corporation with its principal place of business in New Jersey. Id. at *1. Plaintiff Addelson is a resident of St. Louis County, Missouri. Plaintiff Braxton is a New Jersey resident. Plaintiffs both were prescribed and used the prescription medication taxotere in their home states. Id. Plaintiffs have no relationship with each other.
Plaintiffs’ counsel filed a single complaint on behalf of both women in state court in Saint Louis, Missouri – a known judicial hellhole favored by the plaintiffs’ bar. So, why join these two women? Plaintiff Addelson is a Missouri resident who suffered her alleged injury in Missouri which establishes personal jurisdiction for this incident over Sanofi. Plaintiff Braxton is a New Jersey resident which means there is no diversity between her and Sanofi which also means the case can’t be removed to federal court. Clearly a not-too-subtle attempt by plaintiffs to bring and keep this case in state court in St. Louis. Unfortunately, this is a tactic that has worked in Missouri. Missouri’s joinder rules have been broadly interpreted to often allow plaintiffs’ counsel to join together groups of plaintiffs from different states with nothing in common except use of the same product. So, 1 Missouri plaintiff gets you the connection to Missouri and 1 plaintiff from defendant’s home state defeats diversity and keeps you in state court.
Faced with this mixture of personal jurisdiction and subject matter jurisdiction challenges, many Eastern District of Missouri cases that have held that deciding subject matter jurisdiction first was “easier.” See, e.g., Nickerson v. Janssen Pharmaceuticals, Inc. No.4:15CV1762, 2016 WL 3030241 (E.D. Mo. 2016). This means the federal court remands the case based on the presence of the non-diverse plaintiff and once back in state court, those liberal joinder rules kick in and so there the cases stay. We are aware that the issue is currently before the Eighth Circuit in Robinson v. Pfizer, Inc., No. 16-2524, which we’ll be keeping an eye on.
But Addelson is a nice departure from the above cases which appears to see this type of misjoinder for what it is — improper forum shopping or litigation tourism.
First, the court found that Plaintiffs had not satisfied the legal requirements to establish general jurisdiction over Sanofi. Marketing, distributing, and selling a pharmaceutical product in a state is not evidence of continuous and systematic contacts sufficient for general jurisdiction under the Supreme Court’s ruling in Daimler AG v. Bauman, 134 S. Ct. 746, 760-61 (2014). Addelson, at *3. The court also rejected Plaintiffs’ argument that by registering to do business in Missouri and having an agent for service of process in Missouri that defendant had consented to jurisdiction in the state. Any prior contrary ruling by Missouri courts are no longer valid after Daimler. Id. at *4.
That leaves specific jurisdiction. This is where it is necessary to look at plaintiffs separately. Defendants did not argue that the court lacked specific jurisdiction over the claims of Missouri resident Addelson. But the same was not true with respect to New Jersey resident Braxton. There simply were no facts alleged connecting Plaintiff Braxton to Missouri. They weren’t alleged because they don’t exist. She had no connection to the state at all. The court made clear that while plaintiff’s contacts with the forum state are not the focus of the personal jurisdiction inquiry, “plaintiff’s injury must be connected to defendant’s contacts with the forum state.” Id. Because plaintiff Braxton wasn’t prescribed taxotere in Missouri, didn’t ingest taxotere in Missouri, and wasn’t treated for her injuries in Missouri – nothing about her injury was connected to any contact defendant may have had with the state. Therefore, the court dismissed the New Jersey plaintiff’s claims.
But why was plaintiff Braxton named in this lawsuit anyway? To defeat federal diversity jurisdiction. One plaintiff from Missouri mixed with 1 plaintiff from defendant’s state of residence equals St. Louis state court for plaintiffs’ counsel. At least traditionally that is what has happened. But where the federal court decides to rule on personal jurisdiction first and properly dismisses the non-diverse, out-of-state plaintiff, there is no basis to remand the remaining non-diverse plaintiffs. Id. at *5. While this may not seem like such a big deal in this case with only 2 plaintiffs, many of the cases, including the one before the Eighth Circuit now, has dozens of plaintiffs. All misjoined, and usually only a small number of home are actually from Missouri. So, in theory, and in practice, under the Eastern District of Missouri’s usual approach a case with 1 MO plaintiff and 1 non-diverse plaintiff could also be combined with plaintiffs from all over the country having no relationship to either state and those plaintiffs get to try their cases in St. Louis too. Any step toward reversing this clear abuse of due process gets a ringing endorsement from us.