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Today’s guest post by Reed Smith’s Kevin Hara arises indirectly from the Zantac MDL, but addresses a recurring preliminary question of federal jurisdiction − fraudulent joinder. That issue, in turn, involves product identification (another problem in MDLs) and a pointer for pharmacies that want to avoid being involved in pharmaceutical litigation. As always our guest posters deserve 100% of the credit (and any blame) for what they have to say.


This guest writer has always viewed the phrase “Absence Makes The Heart Grow Fonder”—whose origin is attributed to the Roman poet Sextus—with more than a little skepticism and perhaps even disdain.  Notably, Sextus’s original creation “Always toward absent lovers love’s tide stronger flows” waxes significantly more poetic (maybe redundant but he was, after all, a poet), but still leaves an unpleasant aftertaste.  After all, as a person who is perpetually, and perhaps even stubbornly optimistic, I have always believed fondness should not be inversely proportional to proximity—physically, temporally, or between recurrences.

That prefatory discourse leads to a discussion of the doctrine of fraudulent joinder in Gallagher v. Boehringer Ingelheim Pharms., Inc., No. 22-cv-10216 (LJL), 2023 U.S. Dist. LEXIS 13044 (S.D.N.Y. Jan. 25, 2023).  The number of favorable fraudulent joinder opinions on the Drug and Device Law Blog is few and far between, despite the laudable efforts of the intrepid bloggers, which speaks to the difficulty defendants have in prevailing on this argument.  In fact, the last such case dates back to November 2022.  All of us who practice on the right side of the “v.” lament plaintiffs’ gamesmanship, including the rampant joinder of an ensemble cast of non-diverse defendants—including doctors, sales representatives, distributors, pharmacies, medical facilities, retailers, and any number of other unwitting and unfortunate participants—to evade federal jurisdiction by any and all means in prescription product liability cases.  This is hardly surprising, because as Gallagher observed, parties arguing fraudulent joinder face a “heavy burden of proving the circumstances by clear and convincing evidence, with all factual and legal ambiguities resolved in favor of plaintiff.”  Gallagher, 2023 U.S. Dist. LEXIS 13044 at *13 (citation omitted).  With all due apologies to Sextus, the hearts of defense counsel everywhere would grow fonder if courts would find nondiverse defendants were fraudulently joined, and thus should be absent, much more frequently.

That is why Gallagher, soon to be part of In re Zantac (Ranitidine) Prods. Liab. Litig., MDL 2924, Case No. 9:20-md-2924 (“MDL-2924”) (S.D. Fla.), is such a welcome sight.  (As an aside, MDL 2924 has offered numerous reasons for defendants to celebrate, including dismissal of plaintiffs’ medical monitoring claims, and exclusion of plaintiffs’ causation experts under Rule 702).  In Gallagher, the New York resident plaintiff had ingested Zantac OTC from 2014 until 2019, and allegedly suffered kidney cancer.  Id. at *3.  He brought suit in New York state court against several pharmaceutical manufacturers, and for good measure included a distributor and several retailers.  Id. at *1.  Several diverse defendants removed the case to the Southern District of New York on the basis of diversity jurisdiction, arguing plaintiff fraudulently joined the drug manufacturer that was the only New York resident.  Id.

Plaintiff argued the case should be remanded because: (1) that defendant (and a local drug store), as New York citizens, would destroy complete diversity; (2) the removing defendants failed to obtain the written consent of all defendants in violation of the rule of unanimity; and (3) the notice of removal was untimely.  Id. at *10. 

The implausibility of the claims against the sole non-diverse manufacturer satisfied the exacting fraudulent joinder standard.  That manufacturer had relinquished all of its rights to Zantac in December 2006 – eight years before plaintiff began using it in 2014.  Id. at *14.  Incidentally, although New York is one of the vast majority of states that does not recognize innovator liability, the court focused on a more general proposition—product identification—because it is axiomatic that “a manufacturer is not liable for products over which it exercises no control.”  Id.  The complaint “neither allege[d] that [plaintiff] purchased Zantac” from this defendant or that it “was responsible for placing the Zantac” into the stream of commerce, and therefore, failed to provide any “role” that this defendant played “with respect to Zantac that could have resulted in Plaintiff’s injury.”  Id. at *16.  

Gallagher likewise rejected any attempt to manufacture a connection through discovery, because without any allegation that the non-diverse defendant manufactured the medicine plaintiff took, “nor on the facts alleged would any such contention be plausible.” Id. at *16 n.3.  Plaintiff even tried to concoct a cause of action by citing the MDL centralization order, which obviously included all of the common defendants.  Id. at *17.  The court rejected that notion because the MDL order “[could not] be understood to hold that every case in which any of the common defendants is named is one in which under the applicable state law all other defendants face liability.”  Id. at *17.  (This underscores a bigger point: one of the fundamental problems with MDLs involving multiple defendant manufacturers is the “shotgun pleading” in which plaintiffs name all of the potential manufacturers of a product, regardless of whether they were involved in any manner with the product plaintiff actually used).  Simply put, plaintiff could not wring a cause of action from a dry cloth, because there was “no allegation that [the non-diverse defendant] had anything to do with the product that was sold to Plaintiff.”  Id. (emphasis added).  At least the Gallagher court repeatedly and firmly decried plaintiff’s ill-conceived efforts to prevent transfer of the case to the proper forum—the Zantac MDL.

Plaintiff similarly struck out in arguing for remand based on the purported New York residence of a drugstore, whose citizenship as a limited liability company “is determined by the citizenship of its members.”  Id. at *21. Because the LLC’s sole member was a Rhode Island entity with its principal place of business in Rhode Island, the drugstore was a citizen of Rhode Island for diversity purposes.  Id. at *22.  Whether by accident, or by design, having the drugstore organized in another state was beneficial, from a litigation standpoint. If more pharmacies would organize their corporate structure like this, to preserve diverse citizenship, they would find themselves from being targeted a lot less by forum-shopping plaintiffs.

Having lost his substantive, diversity-related arguments, plaintiff attempted to claim consent for removal was lacking because the removing defendants did not “attach letters from each of the properly served and joined defendants unambiguously agreeing to removal.”  Id. at *18.  The court quickly shut down that pettifoggery, explaining, “each of the properly served defendants represented through counsel that such defendant consented to removal,” and because “[n]either the statute nor the Circuit court require consent to be contained in a separate document,” the rule of unanimity was satisfied.  Id. at *19-20.  In short, where a party’s counsel has consented to removal, “the signature is in and of itself sufficient regardless whether . . . freestanding or contained on the notice of removal.” Id. at *20.

Finally, Plaintiff claimed that the removal was untimely because the moving defendants failed to remove within 30 days of their being served.  Wrong again. Id. at *22.  The Second Circuit follows the “later-served” defendant rule, which allows each defendant 30 days from receipt of service to remove an action, such that a defendant whose time to remove has expired “can consent to the timely notice of removal filed by another defendant” that was only served later.  Id. at *23 (citing 28 U.S.C. 1446(b)(2)(C)).  The bottom line: service on the moving defendant was immaterial because removal was sought within thirty days of other defendants being served.  Id.  End of story.  The Gallagher court correctly rebuffed plaintiff’s attempts to prevent transfer of the case to the Zantac MDL.

After Gallagher blunted all of plaintiff’s efforts to prevent the defendants’ rightful removal, it granted the motion to stay pending the JPML’s decision on transfer of the action to the Zantac MDL, and despite plaintiff’s opposition to the CTO, the Panel will almost certainly transfer the case in the near future.  This case represents one of the few bright spots in the landscape of fraudulent joinder, but we would gladly welcome more such triumphs on a regular basis, or maybe “Presence makes the heart beat stronger.”