In the early days of the Blog, in 2009, when Bexis and Mark Herrmann were operating in relative obscurity, we posed the question whether it was ethical to remove to federal court a case that may well be non-removable and hope that opposing counsel is “asleep at the switch”:

“Heck, I’ll remove it anyway.  Opposing counsel may be asleep at the switch and not file a motion to remand within 30 days.  If plaintiff doesn’t timely move to remand, the objection to removal is waived, and my case can be tried to judgment in federal court.”

Is that ethical?

We received one response, which we discussed, that an:

attorneys’ first obligation should be to the integrity of the legal system, and not to their clients’ interests.  Even so, I’m not sure I’d say ‘no’ to either question, given that a yes answer means that incompetent attorneys who don’t realize they are violating the rules would have an advantage over competent attorneys.

With that the issue dropped off the radar.

That question returned to our minds when we researched our recent post on removal before service.  We came up with case after case holding that the so-called “forum defendant” rule was waivable, not jurisdictional, and thus that failure to move for remand in a case that featured complete diversity of the parties – but a defendant located in the forum state – was waiver so that the case stayed in federal court.  That means if a defendant is savvy enough to remove before service in accordance with the express terms of 28 U.S.C. §1441(b)(2), and opposing counsel is, as we said before, “asleep at the switch,” the removal succeeds regardless of a court’s substantive views on removal before service.

For example, in one of our removal before service cases, Selective Insurance Co. v. Target Corp., 2013 WL 12205696 (N.D. Ill. Dec. 13, 2013), the court held:

Plaintiff asserts §1441(b) (2) − the “forum defendant rule” − as a basis for remand, arguing that because defendant . . . is an Illinois citizen, removal was improper.  This rule is statutory, not jurisdictional, and thus may be waived or forfeited.

Id. at 1 (citing Hurley v. Motor Coach Industries, Inc., 222 F.3d 377, 379 (7th Cir. 2000)).  The cited Hurley decision held just that:

We must decide, therefore, whether the forum defendant rule is jurisdictional, in the sense we have been using the term, or if it is of a lesser status.  That question has been bouncing around the federal courts of appeals for more than 75 years, yet oddly enough it remains unresolved in this circuit.  The overwhelming weight of authority, however, is on the “nonjurisdictional” side of the debate.

Id. at 379. Hurley cited the following “overwhelming” precedent supporting the waivability of the forum defendant rule.  Snapper, Inc. v. Redan, 171 F.3d 1249, 1258 (11th Cir. 1999); Korea Exchange Bank v. Trackwise Sales Corp., 66 F.3d 46, 50 (3d Cir. 1995); In re Shell Oil Co., 932 F.2d 1518, 1522 (5th Cir. 1991); Farm Construction Services, Inc. v. Fudge, 831 F.2d 18, 21-22 (1st Cir. 1987); Woodward v. D. H. Overmyer Co., 428 F.2d 880, 882 (2d Cir. 1970); Handley-Mack Co. v. Godchaux Sugar Co., 2 F.2d 435, 437 (6th Cir. 1924), with only Hurt v. Dow Chemical Co., 963 F.2d 1142, 1145-46 (8th Cir. 1992), going the other way.

Another pre-service removal case reached the same conclusion.  The court in Almutairi v. Johns Hopkins Health System Corp., 2016 WL 97835 (D. Md. Jan. 8, 2016), stated:

I am unaware of any specific guidance from the Supreme Court or the Fourth Circuit concerning whether a motion to remand based on the “forum defendant rule” constitutes a procedural or a jurisdictional challenge to removal.  See Councell v. Homer Laughlin China Co., 823 F. Supp. 2d 370, 378 (N.D.W. Va. 2011) (recognizing that the Fourth Circuit “has yet to rule on this question…”).  However, “[o]f the ten circuits that have spoken on the issue, nine have found that removal by a forum defendant is a procedural defect, and thus waivable.”  Id.

Almutairi, 2016 WL 97835, at *5.  In addition to the cases previously cited by Hurley, Almutiari added:  Lively v. Wild Oats Markets, Inc., 456 F.3d 933, 939-40 (9th Cir. 2006), Handelsman v. Bedford Village Assocs. Ltd. Partnership, 213 F.3d 48, 50 n.2 (2d Cir. 2000), Blackburn v. United Parcel Service, Inc., 179 F.3d 81, 90 n.3 (3d Cir. 1999), and Pacheco de Perez v. AT & T Co., 139 F.3d 1368, 1372 n.4 (11th Cir. 1998).

So at least in the context of removal before service, we now unhesitatingly answer our question from 2009 in the affirmative.  By all means remove before service, even in the face of adverse precedent in some district courts.  At best, the plaintiff will miss the issue entirely and will waive any reliance on the forum defendant rule (which is waivable everywhere but in the Eighth Circuit).  At worst, (1) the case is randomly assigned to a federal who has already ruled adversely, and (2) the plaintiff seeks remand in a timely fashion.  In that situation, as our recent removal-before-service posts demonstrate, the defense side has both the upper hand in the argument, and significant appellate support.  See, e.g., Encompass Insurance Co. v. Stone Mansion Restaurant, Inc., ___ F.3d ___, 2018 WL 3999885, at *4-5 (3d Cir. Aug. 22, 2018); Novak v. Bank of N.Y. Mellon Trust Co., 783 F.3d 910, 912, 914 (1st Cir. 2015); La Russo v. St. George’s University School, 747 F.3d 90, 97 (2d Cir. 2014).  A combination of persuasive argument and recent arguments might get a fair-minded judge to change his/her mind.  Even the worst possible result – remand accompanied by an order to pay counsel fees – isn’t all bad, since the sanctions order would be immediately appealable.

But we want to make one thing perfectly clear.  Pre-service removal involves only statutory language relating to diverse “forum defendants.”  There is nothing in the statute, or in the case law, that allows the presence of a non-diverse defendant to be avoided by pre-service removal.  Pre-service removal does not make non-diverse cases diverse.  Any counsel who screws up this fundamental distinction deserves whatever sanctions a court hands out.

 

You haven’t heard of Blue Car syndrome?  Remember the last time you went car shopping. You found a particular make and model (a “blue car”) and then, like magic, you see that same “blue car” 10 times in the next week. It’s in the parking lot of your gym. It pulls up next to you in traffic. It’s even parked down the block from your house. The blue cars didn’t just suddenly appear. So what happened? It’s sometimes called the Baader-Meinhof phenomenon or frequency illusion. It occurs when something you’ve just noticed, like a new car, suddenly crops up everywhere. You really are seeing more blue cars, but not because there are more blue cars, but because you are now noticing them more.

That might not strictly speaking be true for us and pre-service removal — we’re pretty sure we’d notice whenever the issue came up – but it certainly feels like out of nowhere pre-service removal became a hot topic last month. No sooner did we update our research on the issue, then the Third Circuit makes a favorable ruling allowing pre-service removal. Just five days after that decision, the Northern District of Illinois does the same thing.

In Cheatham v. Abbott Laboratories Inc., — F. Supp. 3d –, 2018 WL 4095093 (N.D. Ill. Aug. 28, 2018), plaintiff, a citizen of Louisiana sued Abbott, a citizen of Illinois and Delaware, in state court in Illinois. Before the complaint was served on defendant, it removed the case to federal court and plaintiff promptly moved for remand arguing the forum defendant rule. Id. at *1-2. As with any pre-service removal case, the dispute turned on the interpretation of the “properly joined and served” language of 28 U.S.C. §1441(b)(2). If a “properly joined and served” defendant “is a citizen of the State in which [the] action is brought,” removal is not permitted. Id.

Defendant’s argument: Under the plain meaning of the statute, as defendant was not served at the time of removal, the forum defendant rule does not apply. Cheatham, at *3-4.

Plaintiff’s argument: Allowing pre-service removal undermines the purpose of the forum defendant rule to preserve the plaintiff’s choice of forum where there is no prejudice to an out-of-state party. Id. at *2-3.

That’s the debate: purpose v. plain meaning. And that is the split among the courts to have decided the issue. Although, as our recent update points out, plain meaning has been gaining ground in the recent circuit court decisions on the issue. The Cheatham decision does a nice job of setting out both arguments with citations to cases going both ways before ultimately concluding that “the statutory text must control. Courts must give effect to the clear meaning of statutes as written.” Id. at *5 (citations omitted).

Courts that have applied the “purpose” interpretation believe that it is necessary to look beyond the language of the statute to be “faithful to Congressional intent.” Id. at *3. Those courts seem to be particularly concerned by “snap removals” – where a defendant learns of the filing of a lawsuit from monitoring the docket and then immediately removes the case. In the age of online filing, docket monitoring is not new or uncommon. Plaintiff called it both improper and strategic gamesmanship. Id. at *2. But just because something is strategically advantageous to one side doesn’t make it improper. Nor does it make it gamesmanship in the sense that it is a dubious tactic.

When Congress completely re-wrote 28 U.S.C. §1441(b) in 2011 it left the “properly joined and served” language intact. If you want to talk about Congressional intent, the buck stops in 2011. In fact, the Cheatham court, like others applying the plain meaning of the statute, acknowledge that “Congress will rewrite the statute if it feels that removal where an in-forum defendant has not yet been served constitutes an abuse of the judicial system.” Id. at *5. Having left that provision in place, the forum defendant rule does not apply where the forum defendant has not been served at the time of removal.   Defendant learned of the action “before it became a forum defendant that was both properly joined and properly served,” id., and promptly removed it. There was no bending of the rules required. Diligence isn’t gamesmanship.

And, we actually don’t think pre-service removal is not a frequency “illusion” – it’s real and going in defendants’ favor.

On August 17, 2018, we observed in our latest comprehensive post on pre-service removal, that “[w]ith Court of Appeals decisions now breaking in our favor, we can start trying to change the minds of district courts that have previously gone the other way.”

And how.

On August 22 – less than a week after that post (and while Bexis was on vacation) – the Third Circuit came down strongly on the “plain meaning” side of the ledger in a removal-before-service case and flatly rejected the “absurd result” rationale that some district courts in that circuit had developed.  See Encompass Insurance Co. v. Stone Mansion Restaurant, Inc., ___ F.3d ___, 2018 WL 3999885 (3d Cir. Aug. 22, 2018).  The court first examined the purpose of the “forum defendant” exception to removability of diverse cases and Congress’ amendment adding the “properly joined and served” language that supports pre-service removal:

We therefore turn to section 1441, which contains the forum defendant rule.  Section 1441 exists in part to prevent favoritism for in-state litigants, and discrimination against out-of-state litigants.  The specific purpose of the “properly joined and served” language in the forum defendant rule is less obvious.  The legislative history provides no guidance; however, courts and commentators have determined that Congress enacted the rule to prevent a plaintiff from blocking removal by joining as a defendant a resident party against whom it does not intend to proceed, and whom it does not even serve.

Id. at *4 (citations and quotation marks omitted).

Next, the court examined the competing arguments – “plain meaning” on the defense side, and “absurd result” on the plaintiff side. The facts were rather stark – after initially unconditionally agreeing to accept service, defense counsel notified plaintiff that he would not do so until after he had first removed the case to federal court.  Id. at *1-2.  Although “not condon[ing] this conduct between and among legal practitioners,” the district court denied remand given the express language of 21 U.S.C. §1441(b).  See Encompass Insurance Co. v. Stone Mansion Restaurant, 2017 WL 528255, at *2 & n.1 (W.D. Pa. Feb. 9, 2017).  The Third Circuit affirmed:

Citing this fraudulent-joinder rationale, [plaintiff] argues that it is “inconceivable” that Congress intended the “properly joined and served” language to permit an in-state defendant to remove an action by delaying formal service of process. This argument is unavailing.  Congress’ inclusion of the phrase “properly joined and served” addresses a specific problem − fraudulent joinder by a plaintiff − with a bright-line rule.  Permitting removal on the facts of this case does not contravene the apparent purpose to prohibit that particular tactic.  Our interpretation does not defy rationality or render the statute nonsensical or superfluous, because:  (1) it abides by the plain meaning of the text; (2) it envisions a broader right of removal only in the narrow circumstances where a defendant is aware of an action prior to service of process with sufficient time to initiate removal; and (3) it protects the statute’s goal without rendering any of the language unnecessary.  Thus, this result may be peculiar in that it allows [defendants] to use pre-service machinations to remove a case that it otherwise could not; however, the outcome is not so outlandish as to constitute an absurd or bizarre result.

2018 WL 3999885, *4 (footnotes omitted) (emphasis added).

The omitted footnotes are also significant.  First, the “general rule” that “by interpretation we should not defeat Congress’ purpose of abridging the right of removal” was “not sufficient to displace the plain meaning of the statute.”  Id. at *4 n.3 (citing and quoting Delalla v. Hanover Insurance Co., 660 F.3d 180, 189 (3d Cir. 2011)).  Second, the argument that advanced technology allowing improved docket monitoring was more properly directed to Congress than to the courts:

We are aware of the concern that technological advances since enactment of the forum defendant rule now permit litigants to monitor dockets electronically, potentially giving defendants an advantage in a race-to-the-courthouse removal scenario. . . .  If a significant number of potential defendants (1) electronically monitor dockets; (2) possess the ability to quickly determine whether to remove the matter before a would-be state court plaintiff can serve process; and (3) remove the matter contrary to Congress’ intent, the legislature is well-suited to address the issue.

Id. at *4 n.4.

The Encompass Insurance court therefore unanimously concluded that §1441(b) said what it said when it predicated the forum defendant exception on such defendants being “properly joined and served” and that courts must respect what Congress enacted:

In short, [defendant] has availed itself of the plain meaning of the statute, for which there is precedential support.  [Plaintiff] has not provided, nor have we otherwise uncovered, an extraordinary showing of contrary legislative intent.  Furthermore, we do not perceive that the result in this case rises to the level of the absurd or bizarre.  There are simply no grounds upon which we could substitute [plaintiff’s] interpretation for the literal interpretation.  Reasonable minds might conclude that the procedural result demonstrates a need for a change in the law; however, if such change is required, it is Congress − not the Judiciary − that must act.

Id. at *5.  Finally, the defendant’s previous agreement to accept service did not preclude it from delaying such acceptance until after it removed the case to federal court.  “[W]e are unconvinced that [defendant’s] conduct − even if unsavory − precludes it from arguing that incomplete service permits removal.”  Id.

Thus, the debate is over in the Third Circuit, notwithstanding the prior decisions of some district judges in Pennsylvania, New Jersey, and Delaware to the contrary, and it is perfectly proper for defendants, whether “forum defendants” or otherwise, to monitor state-court dockets electronically for new lawsuits, and to remove diverse cases preemptively to federal court before the plaintiffs (often litigation tourists) can serve in-state defendants whose presence would otherwise preclude removal under §1441(b)(2).

The sound you hear is one more nail being driven in the coffin of litigation tourism.

One last thought.  Query whether, if a defendant in a case in the Third Circuit were unfortunate enough to have removed before service and suffered remand under the “absurd result” rationale rejected in Encompass Insurance, the Third Circuit’s opinion constitutes an “other paper” creating grounds for removal that would support a second removal.  While we don’t know the answer off-hand, it is a question that attorneys representing clients in that situation may want to address.

It’s been a while since we’ve discussed pre-service removal, other than to mention a recent case.  Our last major post was “What’s up with Removal Before Service,” back in May 2011.

Since then, we pointed out an important statutory development – that when Congress rewrote other parts of the removal statute (28 U.S.C. §1441(b)) in 2011, it left intact the language that, read according to its terms (often referred to as “plain meaning” in the cases), allows pre-service removal.  That’s important, because the major argument against pre-service removal is that it’s “gamesmanship” (as if joining 99 disparate plaintiffs in a single complaint isn’t) that leads to “absurd” results that Congress could not have intended.  “However, one person’s ‘gamesmanship’ is strategy to another.” Francis v. Great West Casualty Co., 2018 WL 999679, at *2 (M.D. Ga. Feb. 21, 2018).

[F]rom a policy perspective, §1441(b) protects non-forum defendants from plaintiffs’ procedural maneuvering to deprive these defendants of their statutory right to litigate in a federal forum. . . . This protection . . . is particularly important because the forum defendant rule creates an opportunity for procedural gamesmanship on the part of plaintiffs attempting to keep an action in state court, and thus blocking removal, by either improperly joining a forum defendant, or not serving the forum defendant that they have no intention of pursuing.

In Re Plavix Products Liability & Marketing Litigation, 2014 WL 4954654, at *6 (D.N.J. Oct. 1, 2014) (citations omitted).

That Congress, knowing full well that pre-service removal was being routinely practiced, elected to leave intact the statutory language enabling pre-service removal, makes the “absurdity” argument a much harder sell.  After all, if the statute’s language permits too much “gamesmanship,” the proper response is for Congress to amend the statute, as it did back in 1948 when the “properly joined and served” language was first added.  See Goodwin v. Reynolds, 757 F.3d 1216, 1220-21 (11th Cir. 2014) (discussing 1948 amendment).  It is not the courts’ role to usurp Congress by making ad hoc modifications of statutory language, whenever judges feel like it, particularly when Congress had the opportunity to amend the statute again in 2011, but declined to do so.

[U]nder the plain meaning of §1441(b) an out-of-state defendant, by monitoring state court dockets electronically or otherwise, can dash to the federal courthouse almost immediately with a notice of removal before the complaint is served on it and on an in-state defendant.  As a consequence of advances in technology, there may well be fewer diversity actions precluded from removal under §1441(b) than heretofore.  If this result is deemed to be bad public policy, the remedy lies with Congress which, subject to constitutional limitations, controls the scope of this court’s subject matter jurisdiction and any right of removal.

Valido-Shade v. Wyeth, LLC, 875 F. Supp.2d 474, 478 (E.D. Pa. 2012), summarily aff’d, No. 14-4608 (3d Cir. April 29, 2015).

Enough ranting (for now).  In any event, since our “What’s up” post, we’ve also written several individual posts about:

Christison v. Biogen Idec, Inc., 2011 WL 13153242 (N.D. Cal. Nov. 14, 2011)

Poznanovich v. AstraZeneca Pharmaceuticals LP, 2011 WL 6180026 (D.N.J. Dec. 12, 2011)

Boyer v. Wyeth Pharmaceuticals, Inc., 2012 WL 1449246 (E.D. Pa. April 26, 2011)

Davis v. Hoffmann-La Roche, 2014 WL 12647769 (Mag. N.D. Cal. Jan. 14, 2014), adopted, 2014 WL 12647768 (N.D. Cal. Jan. 31, 2014)

Young v. Bristol-Myers Squibb Co., 2017 WL 2774735 (D. Del. June 27, 2017)

Cheung v. Bristol-Myers Squibb Co., 282 F. Supp.3d 638 (S.D.N.Y. 2017)

So, that’s six additional pre-service removal cases from five states since our last comprehensive post in 2011.  Let’s see how many more there are out there that we’ve missed.

The first thing we note is that some appellate authority now exists.  Since remand is unappealable (28 U.S.C. §1447(d)), appellate review is rare in remand situations.  Most recently, in Bank of New York Mellon v. Mazza, ___ F. Appx. ___, 2018 WL 3524899 (3d Cir. July 23, 2018), the court observed (albeit refraining from deciding the issue) “that every Court of Appeals to have addressed the issue has concluded that defendants in state-court actions may indeed remove them before being served with process.”  Id. at *2.  Mazza cited Novak v. Bank of N.Y. Mellon Trust Co., 783 F.3d 910, 914 (1st Cir. 2015); La Russo v. St. George’s University School, 747 F.3d 90, 97 (2d Cir. 2014), and Delgado v. Shell Oil Co., 231 F.3d 165, 177 (5th Cir. 2000).

Delgado, of course, is from the antediluvian period before modern, technologically-aided pre-service removal, but the Fifth Circuit did state unequivocally that “service of process is not an absolute prerequisite to removal.”  231 F.3d at 177.  Rather, the language of §1441(b) “consciously reflect[s] a desire on the part of Congress to require than an action be commenced against a defendant before removal, but not that the defendant have been served.”  Id.  See also McCall v. Scott, 239 F.3d 808, 813 n.2 (6th Cir. 2001) (“Where there is complete diversity of citizenship . . . inclusion of an unserved resident defendant in the action does not defeat removal under 28 U.S.C. §1441(b).”).

Delgado was also cited in La Russo, where the Second Circuit held:

The argument lacks merit.  Nothing in sections 1441 or 1446 requires a removing defendant to have appeared in the state court proceeding prior to removal.  Nor is there merit in [plaintiff’s] claim that removal was improper because [a defendant] was not served.  Service of process upon a removing defendant is not a prerequisite to removal.

747 F.3d at 97 (citing not only Delgado, but also City of Ann Arbor Employees’ Retirement System v. Gecht, 2007 WL 760568, at *9 (N.D. Cal. March 9, 2007) – a modern pre-service removal case rejecting the “absurd results” argument).

Delgado was also cited in Novak, which is an even more powerful embrace of pre-service removal.  First, the First Circuit stated:

[W]e think it is clear that a defendant generally need not wait until formal receipt of service to remove.  There is no indication that . . . Congress intended to prohibit a defendant from filing a notice of removal before having been formally served

7893 F.3d at 912. A few pages later, Novak held:

[We find] no indication that a defendant was also prohibited from filing a notice of removal before service. We read the statute to contemplate otherwise.  Our interpretation thus aligns with the decisions of other federal courts that have considered this question. . . .  As far as we can tell, every one has concluded that formal service is not generally required before a defendant may file a notice of removal.  And, because Congress is presumed to be aware of an administrative or judicial interpretation of a statute and to adopt that interpretation when it re-enacts a statute without change, we find it informative that Congress made no effort to cast aside this clear consensus among federal courts when it amended §1446 in 2011 without making any substantive change to subsection (b)(1)

Id. at 914 (citations and quotation marks omitted).  In addition to Delgado and LaRusso, Novak added Whitehurst v. Wal-Mart, 306 F. Appx. 446, 448 (11th Cir. 2008) (“nothing in the removal statute, or any other legal provision, requires that a defendant be served with the complaint before filing a notice of removal”), and Sutler v. Redland Insurance Co., 2012 WL 5240124, at *2 (D. Mass. Oct. 24, 2012), another district court case recognizing pre-service removal.  With Court of Appeals decisions now breaking in our favor, we can start trying to change the minds of district courts that have previously gone the other way.

Also, since our 2011 post − although not in a pre-service removal situation − the Seventh Circuit in Morris v. Nuzzo, 718 F.3d 660 (7th Cir. 2013), helpfully noted that the “properly joined and served” language in §1446(b) creates “a service-based exception to the forum defendant rule, meaning that a properly served out-of-state defendant will not be prevented from removing a case when the plaintiff has named but not yet served a resident defendant.”  Id. at 670 n. 3.

As far as the district courts go, here is what we now have – in addition to what we found back in our 2011 post (we did miss some back then, which we’re backfilling now).  As always, we do not do the other side’s research for them, so what follows are all cases allowing pre-service removal – except for those cases we listed back in 2011:

Alabama

Seong Ho Hwang v. Gladden, 2016 WL 9334726, at *5-7 (M.D. Ala. Dec. 21, 2016); Sasser v. Florida Pond Trucking, L.L.C., 2016 WL 3774125, at *4-5 (Mag. M.D. Ala. June 24, 2016), adopted, 2016 WL 3769754 (M.D. Ala. July 14, 2016); Pathmanathan v. Jackson National Life Insurance Co., 2015 WL 4605757, at *3-5 (M.D. Ala. July 30, 2015); Goodwin v. Reynolds, 2012 WL 4732215, at *3-6 (N.D. Ala. Sept. 28, 2012), aff’d on other grounds, 757 F.3d 1216 (11th Cir. 2014); Lemley v. Midwest Automation, Inc., 2009 WL 1211382, at *1 & n.2 (S.D. Ala. May 1, 2009).

Alaska

Seeds v. ERA Alaska, 2013 WL 11311389, at *3 (D. Alaska Nov. 4, 2013).

California

Saratoga Advantage Trust Technology & Communications Portfolio v. Marvell Technology Group, Ltd., 2015 WL 9269166, at *2 (N.D. Cal. Dec. 21, 2015); Sherman v. Haynes & Boone, 2014 WL 4211118, at *1 (N.D. Cal. Aug. 22, 2014); Wilder v. Bank of America, N.A., 2014 WL 12591934, at *4 (C.D. Cal. June 30, 2014); Davis v. Hoffmann-La Roche, 2014 WL 12647769, at *2 (Mag. N.D. Cal. Jan. 14, 2014), adopted, 2014 WL 12647768 (N.D. Cal. Jan. 31, 2014); Fontalvo v. Sikorsky Aircraft Corp., 2013 WL 3197071, at *9-10 (S.D. Cal. June 20, 2013); Regal Stone Ltd. v. Longs Drug Stores California, L.L.C., 881 F. Supp.2d 1123, 1127-29 (N.D. Cal. 2012); May v. Haas, 2012 WL 4961235, at *2-2 (E.D. Cal. Oct. 16, 2012); Christison v. Biogen Idec, Inc., 2011 WL 13153242, at *1 (N.D. Cal. Nov. 14, 2011); Cucci v. Edwards, 510 F. Supp.2d 479, 482-84 (C.D. Cal. 2007); Waldon v. Novartis Pharmaceuticals Corp., 2007 WL 1747128, at *2-3 (N.D. Cal. June 18, 2007); City of Ann Arbor Employee’s Retirement System v. Gecht, 2007 WL 760568, at *8-9 (N.D. Cal. March 9, 2007).

Delaware

Young v. Bristol-Myers Squibb Co., 2017 WL 2774735, at *2 (D. Del. June 27, 2017); Munchel v. Wyeth LLC, 2012 WL 4050072, at *3-4 (D. Del. Sept. 11, 2012); Hutchins v. Bayer Corp., 2009 WL 192468, at *10-11 (Mag. D. Del. Jan. 23, 2009).

District of Columbia

Middlebrooks v. Godwin Corp., 279 F.R.D. 8, 11-12 (D.D.C. 2011).

Florida

Bergmann v. State Farm Mutual Automobile Insurance Co., 2016 WL 9414108, at *2 (N.D. Fla. Dec. 28, 2016); ViSalus, Inc. v. Then, 2013 WL 3682239, at *3 (M.D. Fla. July 12, 2013); Visalus, Inc. v. Knox, 2013 WL 3462176, at *1-2 (M.D. Fla. July 9, 2013); North v. Precision Airmotive Corp., 600 F. Supp.2d 1263, 1268-70 (M.D. Fla. 2009); Valerio v. SmithKline Beecham Corp., 2008 WL 3286976, at *2 (S.D. Fla. Aug. 7, 2008); Bolin v. SmithKline Beecham Corp., 2008 WL 3286973, at *2 (S.D. Fla. Aug. 7, 2008); Masterson v. Apotex, Corp., 2008 WL 2047979, at *2 (S.D. Fla. May 13, 2008).

Georgia

Francis v. Great West Casualty Co., 2018 WL 999679, at *2 (M.D. Ga. Feb. 21, 2018); McClain v. Bank of America Corp., 2013 WL 1399309, at *3 (S.D. Ga. April 5, 2013).

Illinois

D.C. v. Abbott Laboratories Inc., 2018 WL 4095093, at *3-5 (N.D. Ill. Aug. 28, 2018); Graff v. Leslie Hindman Auctioneers, Inc., 299 F. Supp.3d 928, 934-37 (N.D. Ill. 2017); Selective Insurance Co. v. Target Corp., 2013 WL 12205696, at *1 (N.D. Ill. Dec. 13, 2013); In re Pradaxa (Dabigatran Etexilate) Products Liability Litigation, 2013 WL 656822, at *3-4 (S.D. Ill. Feb. 22, 2013); Massey v. Cassens & Sons, Inc., 2006 WL 381943, at *2-3 (S.D. Ill. Feb. 16, 2006).

Indiana

In re Bridgestone/Firestone, Inc., 184 F. Supp.2d 826, 828 (S.D. Ind. 2002).

Kentucky

United Steel Supply, LLC v. Buller, 2013 WL 3790913, at 1-2 (W.D. Ky. July 19, 2013); Darsie v. Cone, 2010 WL 2923285, at *5 (E.D. Ky. July 22, 2010); Stanley v. Insights Training Group, LLC, 2009 WL 3514590, at *1-2 (W.D. Ky. Oct. 29, 2009).

Louisiana

Lewis-Wallace v. Johnson, 2018 WL 1531921, at *2 (E.D. La. March 29, 2018); Leech v. 3M Co., 278 F. Supp.3d 933, 941-43 (E.D. La. 2017); Sexton v. Exxon Mobil Corp., 2017 WL 6803443, at *2 (Mag. M.D. La. Sept. 15, 2017), adopted, 2018 WL 283259 (M.D. La. Jan. 3, 2018); Mendoza v. JLG Industries, Inc., 2016 WL 6872107, at *2 (E.D. La. Nov. 22, 2016); Gorman v. Schiele, 2016 WL 3583645, at *2-3 (Mag. M.D. La. June 8, 2016), adopted, 2016 WL 3580669 (M.D. La. June 28, 2016); Gorman v. Schiele, 2016 WL 3583640, at *5-6 (Mag. M.D. La. May 20, 2016), adopted, 2016 WL 3580669 (M.D. La. June 28, 2016); Colletti v. Bendix, 2016 WL 770646, at *2 (E.D. La. Feb. 29, 2016); Williams v. Boyd Racing LLC, 2016 WL 236993, at *3 (W.D. La. Jan. 19, 2016); Groves v. Farthing, 2015 WL 3646724, at *4-5 (E.D. La. June 10, 2015); Harvey v. Shelter Insurance Co., 2013 WL 1768658, at *2 (E.D. La. April 24, 2013).

Maryland

Al-Ameri v. Johns Hopkins Hospital, 2015 WL 13738588, at *1-2 (D. Md. June 24, 2015); Moore v. Svehlak, 2013 WL 3683838, at *15 (D. Md. July 11, 2013); Clawson v. FedEx Ground Package System, Inc., 451 F. Supp.2d 731, 736 (D. Md. 2006).

Massachusetts

Sutler v. Redland Insurance Co., 2012 WL 5240124, at *2 (D. Mass. Oct. 24, 2012).

Michigan

Gordon v. Home Loan Center, LLC, 2011 WL 1261179, at *7 (E.D. Mich. March 31, 2011); Revere v. MERS, 2010 WL 1541506, at *2 (E.D. Mich. April 19, 2010).

Mississippi

Holmes v. Lafayette, , 2013 WL 654449, at *1 (N.D. Miss. Feb. 21, 2013); Ott v. Consolidated Freightways Corp., 213 F. Supp.2d 662, 665-66 (S.D. Miss. 2002).

Missouri

Gray v. Monsanto Co., 2018 WL 488935, at *2 (E.D. Mo. Jan. 19, 2018); Travers v. Five Below, Inc., 2017 WL 2813320, at *2-3 (E.D. Mo. June 29, 2017); Johnson v. Emerson Electric Co., 2013 WL 5442752, at *4 (E.D. Mo. Sept. 30, 2013); Taylor v. Cottrell, Inc., 2009 WL 1657427, at *2 (E.D. Mo. June 10, 2009); Brake v. Reser’s Fine Foods, Inc., 2009 WL 213013, at *2-3 (E.D. Mo. Jan. 28, 2009); Johnson v. Precision Airmotive, LLC, 2007 WL 4289656 at *6 (E.D. Mo. Dec. 4, 2007).

Montana

Mahana v. Enerplus Resources U.S.A. Corp., 2012 WL 1947101, at *2-3 (Mag. D. Mont. May 30, 2012), adopted, 2012 WL 4748178, at *1 (D. Mont. Oct. 4, 2012).

New Jersey

In Re Plavix Products Liability & Marketing Litigation, 2014 WL 4954654, at *4-6 (D.N.J. Oct. 1, 2014); Westfield Insurance Co. v. Interline Brands, Inc., 2013 WL 1288194, at *2-4 (D.N.J. March 25, 2013) Poznanovich v. AstraZeneca Pharmaceuticals LP, 2011 WL 6180026, at *3-5 (D.N.J. Dec. 12, 2011); Jaeger v. Schering Corp., 2007 WL 3170125, at *2 (D.N.J. Oct. 25, 2007); Yocham v. Novartis Pharmaceuticals Corp., 2007 WL 2318493 at *3 (D.N.J. Aug. 13, 2007); Frick v. Novartis Pharmaceuticals Corp., 2006 WL 454360, at *3 (D.N.J. Feb. 23, 2006).

New York

Cheung v. Bristol-Myers Squibb Co., 282 F. Supp.3d 638, 643-44 (S.D.N.Y. 2017); Petit v. Bristol-Myers Squibb Co., 2012 WL 11893525, at *1-2 (S.D.N.Y. March 23, 2012); Stop & Shop Supermarket Company LLC v. Goldsmith, 2011 WL 1236121, at *6 (S.D.N.Y. March 31, 2011); Deveer v. Gov’t Employees Insurance Co., 2008 WL 4443260, at *4 (E.D.N.Y. Sept. 26, 2008); In re Fosamax Products Liability Litigation, 2008 WL 2940560, at *2, 5 (S.D.N.Y. July 29, 2008).

Oklahoma

Howard v. Crossland Construction Co., 2018 WL 2463099, at *2 (N.D. Okla. June 1, 2018); Magallan v. Zurich American Insurance Co., 228 F. Supp.3d 1257, 1260-62 (N.D. Okla. 2017).

Pennsylvania

Rehmeyer v. Peake Plastics Corp., 2016 WL 7375027, at *3 (E.D. Pa. Dec. 20, 2016); Figured v. Davies, 2016 WL 3148392, at *3 (M.D. Pa. June 2, 2016); Parker Hannifin Corp. v. Federal Insurance Co., 23 F. Supp. 3d 588, 594 (W.D. Pa. 2014); Hutton v. KDM Transport, Inc., 2014 WL 3353237, at *4 (E.D. Pa. July 9, 2014); Valido-Shade v. Wyeth, LLC,, 875 F. Supp.2d 474, 477-78 (E.D. Pa. 2012), summarily aff’d, No. 14-4608 (3d Cir. April 29, 2015); Zokaites Properties, LP v. La Mesa Racing, LLC, 2012 WL 3144127, at *17 (W.D. Pa. Aug. 1, 2012); Banks v. Kmart Corp., 2012 WL 707025, at *2 (E.D. Pa. March 6, 2012); Boyer v. Wyeth Pharmaceuticals, Inc., 2012 WL 1449246, at *2 (E.D. Pa. April 26, 2011); Copley v. Wyeth, Inc., 2009 WL 1089663, at *3 (E.D. Pa. April 22, 2009); Vanderwerf v. Glaxosmithkline, PLC, 2005 WL 6151369, at *1 (E.D. Pa. May 5, 2005).

South Carolina

Fisher v. Pelstring, 2009 WL 10664813, at *2-4 (D.S.C. Sept. 29, 2009).

Tennessee

Linder v. Medtronic, Inc., 2013 WL 5486770, at *1-2 (W.D. Tenn. Sept. 30, 2013).

Texas

Cadena v. ASI Lloyds, 2018 WL 1904839, at *3 (Mag. W.D. Tex. Jan. 5, 2018), adopted, 2018 WL 1899750 (W.D. Tex. Feb. 13, 2018); Doe v. Geo Group, Inc., 2016 WL 3004675, at *3 (W.D. Tex. May 24, 2016); Reynolds v. Personal Representative of the Estate of Johnson, 139 F. Supp.3d 838, 841-43 (W.D. Tex. 2015); Breitweiser v. Chesapeake Energy Corp., 2015 WL 6322625, at *4-7 (N.D. Tex. Oct. 20, 2015); Rios v. Cooper Tire & Rubber Co., 2014 WL 12613385, at *3 (E.D. Tex. March 26, 2014); Carrs v. AVCO Corp., 2012 WL 1945629, at *1-3 (N.D. Tex. May 30, 2012).

West Virginia

Bloom v. Library Corp., 112 F. Supp.3d 498, 506 (N.D.W. Va. 2015); Konikowski v. Wheeling Island Gaming, Inc., 2012 WL 5378252, at *4 (N.D.W. Va. Oct. 31, 2012); Vitatoe v. Mylan Pharmaceuticals, Inc., 2008 WL 3540462, at *2-5 (N.D.W. Va. Aug. 13, 2008).

*          *          *          *

Finally, while not doing the plaintiffs’ research for them, we can safely state, after reading the “absurd result” cases, that the most dangerous form of pre-service removal is by a forum defendant alone, or equivalently, in a case where only forum defendants are sued.  That’s widely seen as a direct slap at the forum defendant rule.  The next most dangerous removals are those taken by forum defendants in cases where there are also non-resident defendants.  The most sympathetic pre-service removal scenario is when the removal is initiated by a non-resident defendant – the type of party that diversity jurisdiction was originally intended to protect.  When defendants have a choice, therefore, it would be best to let the non-resident defendant carry the flag in pre-service removal cases.

One can also hope that current trends in personal jurisdiction might result in dismissal in cases where defendants previously sought to rely upon pre-service removal, since jurisdiction over one affiliated, but separate, “forum defendant” corporation no longer translates into jurisdiction over other corporate defendants.  If, as occurs often in mass tort cases, the plaintiff is also a non-resident of the jurisdiction where suit is brought, then the plaintiff may well not be able to obtain jurisdiction over the non-resident corporate defendant.

Recently, in downsizing our elderly father to a smaller residence and cleaning out his house, we came upon a cassette recording of our too-many-decades-ago Bat Mitzvah. We dug an old boom box out of the basement, listened to our sweet 13-year-old voice, and allowed the waves of nostalgia to wash over us.  We remembered the dress we wore (pink and white) and the upturned faces of our proud relatives (including all four grandparents, the first of whom would depart the very next year).  We recalled the home-cooked food at the “open house” at our home that evening (this was a different era – and tax bracket – than those occupied by cousins who have recently thrown six-figure extravaganzas for their children’s events) and the elusive (for us) sense of religious affiliation. For the thirty minutes of that cassette tape, we were transported.

Our love of nostalgia is neither new nor news. Readers of this blog know how much we love revivals of old Broadway musicals (recent:  South Pacific, Pippin, Finian’s Rainbow, Hello, Dolly; upcoming:  Carousel, My Fair Lady), and we will wax nostalgic in Connecticut this weekend at our 30th law school reunion (Guido’s torts class anecdotes, anyone?).   And we had a wistful flash when we read today’s case.  A decade ago, we were enmeshed in the earliest stages of a mass tort MDL.  Plaintiffs routinely filed in state court and, seeking to evade federal jurisdiction, sued a distributor domiciled in the state of filing (a “forum defendant”) along with our client, the manufacturer.  Trajectory permitting, we would sweep in and remove those cases before the forum defendant was served.  We called these “wrinkle removals,” because a “wrinkle” in the removal statute opened this window for us.

As one of our co-bloggers recently explained, this blog has been posting about “removal before service” since Bexis brought it to the attention of the legal community in 2007.  It’s a procedural tactic that enables defendants to remove cases to federal court despite the “forum defendant rule,” which ordinarily prohibits a defendant from removing to a case that, while it meets the requirements of diversity jurisdiction under 21 U.S.C. § 1332(a), is also pending in the home state of the defendant. Here’s the rule as codified in 21 U.S.C. § 1441(b) (2):  “A civil action otherwise removable solely on the basis of the jurisdiction under section 1332(a) of this title may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.” (Emphasis added).

A review of our long chain of posts on this subject reveals dramatic splits among, and even within, district courts (notably, the Eastern District of Pennsylvania) on this issue. Some courts acknowledge the plain language of the statute and deny remand, while others remand in the supposed “spirit” of diversity jurisdiction.  Last week’s Southern District of New York decision in Cheung v. Bristol-Myers Squibb Co., et al., 2017 WL 4570792 (S.D.N.Y. Oct. 12. 2017), one of the best opinions we have read on this issue, falls resoundingly in the former category.  In Cheung, the court explained that, in response to the Eliquis MDL court’s dismissal, on preemption grounds, of the first case subject to a 12(b)(6) motion, plaintiffs’ counsel voluntarily dismissed thirty-three cases and re-filed them in Delaware state court.   The defendants removed them to the United States District Court for the District of Delaware, and the judge there denied motions to remand all thirty-three cases, holding that removal was proper despite the presence of a defendant domiciled in Delaware.  The same plaintiffs’ firm filed four more actions in Delaware state court, and the defendants removed those, too, and tagged them for transfer to the MDL in the Southern District of New York.  The plaintiffs waited to move for remand until the cases were transferred to the MDL, then moved to remand all four.

Denying the motions to remand, the court emphasized that “the [removal] statute prohibits removal when there are in-state defendants only when those defendants have been ‘properly joined and served.’ The specific purpose of the ‘joined and served’ requirement has been read to prevent a plaintiff from blocking removal by joining as a defendant against whom it does not intend to proceed and who it does not even serve,” Cheung, 2017 WL 4570792 at * 3 (internal punctuation and citations omitted), precisely the description of the distributor defendant in our long-ago MDL.  Noting that it was “undisputed that the defendants removed the cases before they were properly served,” id., the Court held that “a plain reading of the forum defendant rule” permitted removal. Id.

The plaintiffs “urge[d] the Court to ignore the plain reading of the statute to discourage what they term[ed] ‘gamesmanship’ by the defendants,” id., suggesting that the statute “should only be enforced when a removal occurs after a plaintiff has had a ‘meaningful chance’ to serve the [forum] defendant.” Id. They argued that upholding the removals, “which they contend[ed were] strategically done in order to evade the forum defendant rule, would be to frustrate the purpose of both diversity jurisdiction and the forum defendant rule.” Id.

But the court refused to bite. As the court emphasized, “It is well and long established that courts apply the plain meaning of unambiguous statutory language. . . . The plain language of Section 1441(b) makes clear that its ‘prohibition’ on removal applies only where a defendant who has been ‘properly joined and served’ is a resident of the forum state.” Id. at *4 (citations omitted, emphasis in original).   The court continued, “Ignoring the plain terms of the statute to determine in an individual case when a plaintiff has had meaningful opportunity to serve each defendant and to investigate the parties’ motives . . . would add expense, delay, and uncertainty to the litigation.  In cases like the ones at issue here, the investigation is complicated and points in several directions.  While the defendants no doubt removed the actions swiftly [before the forum defendant rule would prohibit removal], a ruling in favor of the plaintiffs on the issue of removal would reward a different type of gamesmanship altogether.  Instead of promptly moving before [the District of Delaware] for remand of [these] four cases, . . . [the plaintiffs] waited until the JPML had ordered the transfer to move for their remand, . . . hop[ing] for a different result.”  Id.  The court concluded, “If the plaintiffs, then, urge an interpretation of the removal statute that takes the litigants’ strategies into account, theirs may not be ignored.” Id. Remand denied, and all four cases dismissed under the same preemption arguments that had previously prevailed.

We just love this stuff. It combines all the elements that, on a good day, make this a fun job – hornbook statutory construction, chutzpah, a confident judge, and questionable opponents.  We will continue to follow the trail of this doctrine and will hope that more judges veer down this fork in the jurisprudential road.

What follows is a guest post from long-time friend of the blog Thomas J. Hurney, Jr. of Jackson Kelly PLLC in Charleston, West Virginia.  Tom comes to us today with news of an interesting – and favorable – federal court remand denial in one of the recently filed opioid litigation in his state.  It raises interesting legal issues in the context of litigation where the possibility of local prejudice makes the right of removal to federal court extremely important.  As always with our guest posts, Tom is 100% responsible for what follows.  He thus deserves all the credit and any blame.

**********

With respect (a lot) to the Drug & Device folks, removal and remand cases are pretty hard to spice up.  While these cases may cry out for humor and whimsy, this guest post with an old-school case summary will have to do the trick.

A number of governmental entities – states, counties and cities – have sued drug manufacturers, distributors, pharmacists and doctors, alleging that because of their distribution, sales and prescription practices, communities have been “flooded” with opioids, resulting in “an acute epidemic of drug use and related social problems.”  Relying on tort and nuisance theories, these governmental plaintiffs seek damages to “compensate … for sums [they] expended and will be forced to expend responding to social problems caused by the opioid epidemic.”

In County Commission of McDowell County v. McKesson Corp., ___ F. Supp.3d ___, 2017 WL 2843614 (S.D.W. Va. July 3, 2017), the County Commission sued several pharmaceutical distributors, including named-defendant McKesson, and added a local physician.  The defendant distributors were all citizens and residents of states other than West Virginia.  The defendant physician was a West Virginia resident, transparently added to destroy diversity jurisdiction, so that plaintiff McDowell County could sue in (you guessed it) McDowell County Circuit Court.

The defendants removed the action, alleging the physician was fraudulent joined, and also fraudulently mis-joined, to defeat diversity.  The defendants argued that the physician was fraudulently joined because there was no possible cause of action against him, as the plaintiffs failed to serve him with a Notice of Claim and Certificate of Merit at least thirty days before filing suit, as required by the West Virginia Medical Professional Liability Act, W.Va. Code §55-7B-6.  Because this failure required dismissal of the complaint against the doctor, there was no possible existing claim, so he was therefore fraudulently joined.

Defendants also argued fraudulently mis-joinder, because “the claims against [the physician] arise out of different transactions, involve different evidence, and rest on different legal theories than the claims against the diverse defendants.”

The Plaintiff moved for remand.

Remand was denied with a scholarly opinion that literally started at the beginning. Citing Chief Justice Marshall’s decision in Strawbridge v. Custiss, 7 U.S. (3 Cranch) 267 (1806), this to-be-published opinion reviewed the history of diversity jurisdiction, noting that “[t]he rule of complete diversity appears nowhere in the statute.” Although diversity jurisdiction has existed since the First Judiciary Act of 1789, it has “always been the subject of some controversy,” with the stated reasons for diversity jurisdiction including local prejudice and perhaps a desire to protect creditors from state legislation favorable to debtors.  “In the early days of the republic, at least in Virginia [of which West Virginia was a part before 1863], prejudice was palpable.  The state courts there were notoriously hostile to foreign merchants.”  As an example, state juries were permitted to deny interest on a debt judgment for a creditor, effectively removing the profit from the transaction.  Id. at *1.

The reference to “local prejudice” as a basis for diversity jurisdiction is telling, since McDowell Co. v. McKesson is precisely the type of litigation that, these days, highly likely to raise this concern, that being a local municipality suing in its home court seeking recovery of damages that would (among other things) be likely to reduce local jurors’ taxes.

Concerning the trend in federal courts against diversity jurisdiction, the opinion pointed out that “[i]n recent times, crowded federal dockets, a dearth of evidence showing the existence of state court prejudice, and continuing doubts about the utility of diversity jurisdiction have pushed federal courts in the direction of limiting it.”  Consciously bucking that trend, the decision defended the importance of diversity jurisdiction, stating

Nevertheless, Congress has created diversity jurisdiction and a litigant whose case comes within it has a right to be in federal court. As the Supreme Court has said:  “[T]he Federal courts may and should take such action as will defeat attempts to wrongfully deprive parties entitled to sue in the Federal courts of the protection of their rights in those tribunals.”  In re Lipitor (Atorvastatin Calcium) Mktg., Sales Practices and Prods. Liab. Litig., 2016 WL 7339811 at *3 fn.4 (D.S.C. Oct. 24, 2016) (quoting Alabama Great S. Ry. Co. v. Thompson, 200 U.S. 206, 218 (1906)).  Therefore, if diversity jurisdiction is to be assigned to oblivion, it is Congress, not the courts who should send it there.  Here, where the opioid epidemic is pervasive and egregious, there is at least a possibility of prejudice to the defendants at the hands of a jury drawn exclusively from the very county that is the plaintiff in this suit.  A federal jury casts a wider net and is drawn from a division composing several counties.  All may have an opioid problem, but not one that is specific to the plaintiff county.

Id. at *2.

Turning to the analysis of the defendants’ removal, the court provided a concise review of the fraudulent joinder and mis-joinder doctrines.  “Fraudulent joinder is applicable where a defendant seeking removal argues that other defendants were joined when there is no possible cause of action against those defendants or where the complaint pled fraudulent facts,” whereas “[f]raudulent misjoinder . . . is an assertion that claims against certain defendants, while provable, have no real connection to the claims against other defendants in the same action and were only included in order to defeat diversity jurisdiction and removal.”  Id. (citing Wyatt v. Charleston Area Med. Ctr., 651 F. Supp.2d 492, 496 (S.D.W. Va. 2009)).

Thus, “[i]n order to establish fraudulent joinder in a particular case, a removing defendant must show either (1) there is no possibility that the plaintiff can establish a cause of action against the removing defendant, or (2) that there has been outright fraud in plaintiff’s pleading of jurisdiction. Id. The claim against the doctor, therefore, requires remand “[i]f the plaintiff demonstrates a mere ‘glimmer of hope’ that its claim will succeed.  Id. at *3 (quoting Hartley v. CSX Transp., Inc., 187 F.3d 422, 424-26 (4th Cir. 1999)). However, “[t]his is the rare case that fits the ‘no possibility of recovery’ rubric.” Id.

The court agreed that the physician was fraudulently joined because McDowell County did not serve him with a notice of claim and screening certificate of merit at least 30 days before suing him as required by the Medical Professional Liability Act, W.Va. Code §55-7B-6 (MPLA).

West Virginia Code § 55-7B-6, imposes a series of procedural prerequisites for filing a medical malpractice claim.  The plaintiff, in such a case, is required, at least thirty days prior to filing suit, to service notice on the defendant of his intention to bring suit.  The notice must contain a ‘screening certificate of merit’ executed under oath by a qualified expert.’  If this requirement is not met, the case must be dismissed.

Id.  The MPLA plainly applied to the allegations of improper prescription by the doctor – “[i]t can hardly be questioned that writing prescriptions for controlled medication are acts done within the context of rendering health care services,” as defined in the MPLA.  Id.

Finding that state law requiring pre-suit requirements are jurisdictional (citing Flagg v. Stryker Corp., 819 F.3d 132, 137-38 (5th Cir. 2016) (en banc) [ed. note, we blogged about Flagg here], and Robinson v. Mon, 2014 WL 4161965, at *8 (S.D.W. Va. Aug. 19, 2014)), the court concluded “there is no possibility of recovery by the plaintiff against [the doctor] in this civil action as it presently stands” and the dismissed the county’s claim against him without prejudice.  Id.

That was not all.  Aiming to prevent a recurrence of this kind of jurisdictional subterfuge (remember the “local prejudice” point), the court further found that the local prescribing physician was fraudulently mis-joined because the claims against him for improperly prescribing some opioids were attenuated from the claim that the distributors “flooded” the market.

Fraudulent joinder assumes that the claim against the nondiverse defendant is sufficiently related to the claims against the diverse defendant to have been properly joined in the same lawsuit.  Such is not the case with the related, but distinct, doctrine of fraudulent misjoinder.  Here, the inquiry is whether claims against the diverse and non-diverse defendants are sufficiently related to be properly joined in a single case.

Id.

Upon review of cases adopting misjoinder, the court found the Fourth Circuit has “not accepted nor rejected the doctrine” but noted several District Courts had done so (commending the reader to the list of cases in In re Lipitor (Atorvastatin Calcium) Mktg., Sales Practices and Prods. Liab. Litig., 2016 WL 7339811 at *3 fn.4 (D.S.C. Oct. 24, 2016)).  Id. at *4.  Since the propriety of joinder is a state law question, the court looked to Rule 20 of the West Virginia Rules of Civil Procedure, governing joinder, and cases on its federal counterpart.  “Under Federal Rule 20 and the corresponding West Virginia rule, the claims, to be properly joined, must (1) arise out of the same transaction or occurrence, and (2) present a question of law or fact common to all defendants.”  The court declined to apply a “heightened standard” similar to fraudulent joinder adopted in In re Lipitor (“[T]o establish fraudulent misjoinder, the removing party was required to show either outright fraud, or that there was no possibility that the plaintiff would be able to join the diverse and non-diverse claims”), instead finding “[t]he prevailing standard is whether there is a ‘reasonable possibility that a state court would find that [the plaintiffs’] claims against [one set of defendants] were properly joined with [the] claims against the other defendants.’” Id.

The court contrasted Wyatt v. Charleston Area Med. Ctr., a medical device case where the court found that product liability and malpractice claims arose “out of the same occurrence – the plaintiff’s surgery ‘and the after effects of that surgery,’” with Hughes v. Sears, Roebuck and Co., 2009 WL 2877424 (N.D.W. Va. Sept. 3, 2009), where the court found that the plaintiff, who fell off a treadmill, couldn’t combine product claims against the treadmill manufacturer with malpractice claims against the emergency room physician who misdiagnosed her injuries.  “[The emergency room doctor] had no control over the allegedly defective product.”  Id. at *5.

In the case before the court, there was no basis for a persuasive argument that the medical malpractice and products liability claims arose out of the same transaction or occurrence.  Moreover, “the evidence supporting these claims will be markedly different.”  Id.  McDowell County’s claims were more like Hughes than Wyatt, since:

 In this case, the connection, if any, between the actions of the corporate defendants, who allegedly flooded the market with opioids, and the doctor, who prescribed some of them, is far more attenuated than any connection between the manufacturers and seller of the treadmill in Hughes and the subsequent misdiagnosis by the treating physician.

Id.

Thus, the McDowell opinion concluded,

Since there is no possibility of recovery against [the doctor] in this case, he has been fraudulently joined. Additionally, the court finds no common questions of law or fact in plaintiff’s claims against the corporate defendants and the claims against [the doctor].  The cases against each are separate and distinct. Accordingly, [the doctor] has also been fraudulently misjoined. The Motion to Remand is therefore DENIED.  Since the court lacks jurisdiction over plaintiff’s claims against [the doctor] this action, insofar as it relates to [him], is dismissed without prejudice.

Id.

This remand ruling eliminates one possible jurisdictional ploy to defeat diversity. There are, however, others, and we will have to see what happens next.

This post comes from the Cozen O’Connor side of the blog.

We’ve been blogging about “removal before service” since we announced it to the world in 2007.  It’s a procedural tactic that enables defendants to remove cases to federal court despite the “forum defendant rule,” which ordinarily prohibits a defendant from removing to federal court a case that, while it meets the requirements of diversity jurisdiction under 21 U.S.C. § 1332(a), is also pending in the home state of the defendant. Here’s the rule as codified in 21 U.S.C. § 1441(b) (2):

A civil action otherwise removable solely on the basis of the jurisdiction under section 1332(a) of this title may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.

(Emphasis added).

We emphasized the phrase “properly joined and served” because that’s the basis for “removal before service.” Defendants have had success, in certain courts before certain judges, arguing that this phrase should be interpreted according to its plain terms and that, therefore, a defendant who has not yet been served can remove a case on diversity jurisdiction grounds even if the case is in its home state court.

The court in Young v. Bristol-Myers Squibb Co., 2017 U.S. Dist. LEXIS 98736 (D. Del. June 27, 2017), is one of the courts that accepts this argument. Young was one of 33 cases in the Eliquis drug litigation that plaintiffs’ lawyers had filed in the Superior Court of Delaware. Each plaintiff and the two defendants, Bristol-Myers Squibb and Pfizer, were citizens of different states, suggesting that the cases were ripe for removal to federal court on the basis of diversity jurisdiction. But BMS and Pfizer are citizens of Delaware (as are so many corporations), implicating the forum defendant rule’s bar to removal of diversity cases.

But, as the Young court put it, all of this occurred “before Plaintiffs served (or, due to Superior Court procedures, could have served) their complaints on Defendants.” Id. at *2. The defendants had an opportunity. And they took it. They immediately removed the cases to the United States District Court for the District of Delaware where they had the good fortune of drawing a judge who had previously blessed “removal before service”—and did so again:

The undersigned judge has had several occasions to consider this issue. Having done so again, the Court sees no reason here to depart from its previously-adopted reasoning. See Munchel, 2012 U.S. Dist. LEXIS 128971, 2012 WL 4050072; Hutchins, 2009 U.S. Dist. LEXIS 4719, 2009 WL 192468. As in Munchel and Hutchins, the Court views the plain and unambiguous language of § 1441(b) as controlling. Section 1441(b)(2) provides that a case in which there is diversity jurisdiction “may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.” Here, there is diversity jurisdiction, but because there was no service on any defendant before removal, none “of the parties in interest properly joined and served as defendants is a citizen” of “the State in which [this] action” was brought, i.e., Delaware. 28 U.S.C. § 1441(b)(2) (emphasis added).

Id. at *5 (emphasis in original). And so we have yet another decision approving “removal of service” under the plain terms of the statute.

In this instance, the Court suggested that it had an additional reason to rule the way it did. The plaintiffs had already engaged in forum-selection tactics of their own. The cases were originally filed in California state court, not Delaware. The defendants, who were not California citizens, promptly removed the cases to a federal court in California and started the process to transfer the cases to the Eliquis MDL, a place that plaintiffs most certainly did not want to be. So—and here it comes—the plaintiffs voluntarily dismissed all 33 cases. They then re-filed the cases, the very same day, in Delaware state court, a court from which they hoped the forum defendant rule would hamstring defendants from once again removing the cases to federal court. Id. at *1-2.

This history of forum shopping clearly influenced the Court’s decision on plaintiffs’ motion to remand:

Additionally, given the history of these cases — including that Plaintiffs voluntarily dismissed cases originally filed in California state court, seemingly (at least in part) to avoid transfer to the MDL — removal is not a nonsensical result. To the contrary, the totality of circumstances strongly supports exercising discretion to deny Plaintiffs’ motions to remand.

Id. at *4-5.

So the “removal before service” option lives on, at least in some courts. And Young offers precedent for an argument that “removal before service” may be even more appropriate when the history of the case suggests that the plaintiff had already engaged in some sort of procedural maneuvering before the case was even removed.

Plaintiff lawyers must be mighty allergic to federal court.  They perform all sorts of maneuvers to avoid CAFA removal of mass actions.  For example, they will artificially subdivide their cases into groups of under 100.  And/or they will disclaim any intent to try the cases together.  Do these circumventions work?  Perhaps most important, since so many of these CAFA avoidances occur in California, will such circumventions work in the Ninth Circuit?

Maybe.

At first, the Ninth Circuit permitted these evasions in a couple of decisions, creating a split with the Seventh and Eighth Circuits.  But then the Ninth Circuit took the cases up en banc.  The Ninth Circuit is so large that an en banc panel does not include all of the judges.  But an entire en banc panel always includes the Chief Judge.  That turned out to be important in the 2014 Corber en banc case because the dissenter in one of the earlier panel decisions was Chief Judge Gould.  Guess who authored the Corber en banc opinion?  Chief Judge Gould took a pragmatic approach to what counts as a “joint trial” for purposes of CAFA. That approach put the Ninth Circuit in alignment with the Seventh and Eighth Circuits and concluded that a proposal for a joint trial may be made implicitly as well as explicitly. Yes, it would be simpler to administer a bright line rule requiring plaintiffs to utter the magic words “joint trial,” but such a rule “would ignore the real substance” of plaintiffs’ proposals.  The plaintiffs had sought coordination “for all purposes.”  They had argued in the California state court that coordination was needed to avoid “the danger of inconsistent judgments and conflicting determinations of liability.”  That smells like a request for something that would actually or functionally be a joint trial.  The Ninth Circuit held that CAFA removal was proper under such circumstances.

Goodbye circuit split, hello sanity.  We praised the Corber decision here.

But the Corber opinion possibly suggested a road map — or another set of magic words — that might work to make federal jurisdiction disappear.   What if plaintiffs explicitly limited their request for coordination “solely for pretrial purposes”?  We all know that such a statement would be disingenuous.  But would it work?  Would it keep the cases in the pro-plaintiff maw of California’s coordination process?

The other shoe has fallen (sort of), the magic words have been uttered (sort of), and plaintiffs followed the road map (sort of). In Dunson et al. v. Cordis Corp., 2017 U.S. App. LEXIS 6446 (9th Cir. April 14, 2017), the Ninth Circuit upheld a remand of a mass action because the plaintiffs had not proposed a joint trial. (We have written about the Dunson case before.) Instead, the plaintiffs had argued that consolidation “for purposes of pretrial discovery and proceedings, along with the formation of a bellwether-trial process, will avoid unnecessary duplication of evidence and procedures in all of the actions, avoid the risk of inconsistent adjudication, and avoid many of the same witnesses testifying on common issues in all actions, as well as promote judicial economy and convenience.” We think this should be enough for CAFA removal, but the Dunson court held otherwise.

As an initial matter, the court says the appeal would be easy to resolve if the plaintiffs had simply sought consideration for “all pretrial purposes, including discovery and other proceedings,” and stopped there.  The Dunson court would easily have held that there was no request for a joint trial and thus, no basis for CAFA jurisdiction.  But the plaintiffs did not stop there.  They went on to wax poetically about the virtues of a bellwether trial process.  Do we now have a request for a joint trial?

The Dunson court held that it all came down to what sort of bellwether trial was being sought.  Sometimes, rarely, the result of a bellwether trial will be binding on the other cases. (For the moment, we are using deliberately vague language on this point.  More to come.) That definitely would meet the definition of a joint trial.  If that is what the plaintiffs want, they must go to federal court.  But much more typical is a bellwether trial  that would not be binding, but would be merely illustrative.   Such a bellwether trial, according to the Dunson court, would not be a joint trial and would not support CAFA jurisdiction.  The Dunson court assumes that when plaintiffs ask for a bellwether trial, they are asking for the non-binding member of the species.  Putting the burden on the defendant to show that the plaintiffs were proposing a joint trial, the Dunson court held that such a showing had not been made, that the plaintiffs had not sought coordination “for all purposes” as in Corber, and that, thus, remand to state court was appropriate.  A dismal day for the defense.  (The Dunson court supported some of its reasoning by citing another less-than-delightful Ninth Circuit case, Briggs, which we dissected here.)

There are many problems with the Dunson decision, including its departure from the pragmatic approach of Corber.   Experienced defense counsel know precisely what the plaintiffs want. They want a process that permits asymmetrical discovery where the defendants have to cough up millions of pages and scores of company witness depositions, while most of the plaintiffs’ individual cases hardly get tested.  That is, plaintiffs want a settlement machine.  The Dunson court pooh-poohed the preclusive effect of a bellwether trial because it would not have such effect on other plaintiffs.  But the Dunson court was forced to acknowledge that, “True, a verdict favorable to the plaintiff in the bellwether trial might be binding on the defendant under ordinary principles of issue preclusion, but that is not enough” (emphasis in original). How fair is that?  Moreover, the Dunson court ignores the plaintiffs’ own admissions of what they were up to in their consolidation request.  The plaintiffs wanted to avoid the risk of “inconsistent adjudications” (we bet the plaintiffs are pretty selective when it comes to that aversion) and they defined that risk as “different results tried before different judge and jury, etc.” The Dunson court admitted that such language “does suggest that a joint trial would be needed to avoid the risk of inconsistent adjudication.”  Yes. Yes, it does.  But the plaintiffs parked that language in a portion of their briefs generally extolling the wonders of consolidation (and overlooking the massive prejudice to defendants that can arise from consolidation), and the plaintiffs did, after all, remember to insert a disclaimer that they were not seeking a joint trial.

Look, we clerked on the Ninth Circuit and will defend it against all the usual ideological attacks.  But this time, the Ninth Circuit got CAFA removal wrong.  It ignored the Supreme Court’s admonition in Standard Fire Ins. Co. v. Knowles — a case nowhere even cited in Dunson — not to “exalt form over substance” in assessing CAFA jurisdiction.  Perhaps another en banc decision will ride to the rescue.

We were wondering when the courts would catch on to this Catch 22.  In order to survive preemption, plaintiffs suing the manufacturers of pre-market approved (“PMA”) medical devices have to allege “parallel claims” in which all “common-law” claims must be genuinely equivalent to violations of FDA regulations. But under Grable & Sons Metal Products, Inc. v. Darue Engineering & Manufacturing, 545 U.S. 308 (2005), and Gunn v. Minton, 133 S. Ct. 1059 (2013), the more “federal” looking the cause of action, the more likely it is to support federal question jurisdiction.

Less than two weeks ago we blogged about an “analogous” GMO case where an agency fraud claim sufficed to support G-G federal question jurisdiction.  Now comes the real thing.  In Burrell v. Bayer Corp., 2017 WL 1032504 (W.D.N.C. March 17, 2017), we no longer need to speak of analogies in considering G-G PMA preemption removal.  To paraphrase Riegel v. Medtronic, Inc., 552 U.S. 312 (2008), Burrell IS PMA preemption removal.

Burrell involved the Essure contraceptive device – the other side’s current target in its quest to impose a tort tax on every new form of contraceptive (a phenomenon we discussed here).  Because this product is a pre-market approved medical device, the plaintiff filed a complaint consisting of almost entirely parallel violation claims.  Defendant removed the claim to federal court despite the presence of non-diverse prescribing physicians.  Not even bothering with fraudulent joinder and diversity jurisdiction, the defendant relied solely on federal question jurisdiction under G-G.

G-G jurisdiction involves a three-part test.

First, the action must involve a federal question that was “necessarily raised” as well as “actually disputed.”  Not hard at all.  The plaintiff’s parallel claim “necessarily raises federal law.”  Burrell, 2017 WL 1032504, at *2.

The Complaint is replete with references to the FDA. Federal oversight of the . . . defendants is a necessary part of this case, and plaintiff raises the question of the[ir] . . . duties under the FDCA, as amended by the MDA, and whether they complied with such responsibilities.  Accordingly, the plaintiff’s Complaint necessarily raises federal issues, particularly agency action and the MDA, and the actions of the . . . defendants and health providers under such federal oversight are the subject of this and the related suit.

Id.  The issue was not whether the FDCA created a cause of action itself, but only whether federal law was “necessarily implicated.”  Id.

In order to succeed, the plaintiff must demonstrate that the device or defendants’ conduct deviated from prevailing law.  In the case of the device’s marketing and manufacture, those relevant laws are federal in nature.  Accordingly, they are implicated here and in dispute.

Id. at *3.

Second, the question must be substantial.  Another variant of the prior plaintiff’s argument based on lack of a federal cause of action again failed.  Absence of a cause of action did not mean that the federal aspects of plaintiff’s parallel claim were insubstantial.  The G-G test “explicitly rejected” that equation.  Id. at *3.  Rather,

If the Supreme Court actually intended there to be two pathways to federal question jurisdiction (federally-created or “arising from” federal law), it simply cannot be that the lack of a federal cause of action would foreclose the second pathway.  The lack of a private, federally-created cause of action . . . is far from dispositive if the second pathway (“arising from” federal law) is to be of any real-world application.

Id.  Thus “that there is no private right of action under the FDCA is not dispositive.”  Id. at*4.  Rather, “the dispute is indeed substantial as it challenges the federal oversight of Class III medical device products.”  Id.

Third, and finally, the federal question must be capable of review “without disrupting the federal-state balance.”  The fact of extensive express preemption established where that balance properly lies.  “Congress in this case passed the MDA, explicitly pre-empting state law as a general rule.  It would be farcical to override that explicit Congressional act.”  Id. at *3.

In setting up the MDA, Congress acted with the intent that medical devices would be regulated exclusively by the FDA and state law would be generally preempted.  See 21 U.S.C. § 360k.  Accordingly, it would not upset the federal-state balance to have such claims be brought in federal court.

Id.  “Federal law governs those duties” that plaintiff alleged, such as the supposed “continuing duty to monitor and disclose the true character, quality and nature” of the product.  Id. at *4 (quoting complaint).  All plaintiff’s references to the FDA, necessary to plead a parallel claim under TwIqbal, also tipped the balance in favor of exercising federal jurisdiction.  Id.  “It does not upset the federal-state balance to allow federally-approved medical devices to be sued for alleged safety risks and labeling defects in federal court.”  Id.

That’s how it is done.

The existence of extensive federal preemption, in and of itself, is a strong indication that Congress preferred federal to state court jurisdiction in this aspect of the FDCA.  That plaintiff pleaded claims brimming with FDA standards and allegations of violations of federal law further demonstrated the propriety of federal jurisdiction.  Federal-state balance is not a code word for shrinking federal court dockets, but rather entails balancing the federal and state aspects of the plaintiff’s allegations.

 

As we’ve mentioned before, we watch state-law litigation over genetically-modified organisms (“GMOs”) because they tend to produce interesting results on federalism issues such as preemption, since anti-GMO zealots often try to interpose state law to gum up the works of federal regulatory decisions that they don’t like.  Those results are applicable by analogy (at least to our defense-oriented way of thinking) to litigation in our sandbox that attempts to litigate FDA-related issues in the context of product liability litigation.

The recent decision Bader Farms, Inc. v. Monsanto Co., 2017 WL 633815 (E.D. Mo. Feb. 16, 2017), is such an opinion – on the issue of federal question removability to federal court under Grable & Sons Metal Products, Inc. v. Darue Engineering & Manufacturing, 545 U.S. 308, 314 (2005).  The plaintiffs in Bader Farms brought state-law tort claims alleging that herbicide “drift” had damaged their crops.  The GMO aspect arose because the herbicide was “old” and the defendant had not provided a new type of herbicide to be used on genetically engineered crops.

Genetically engineered crops are “highly regulated” by the federal government.  2017 WL 633815, at *1.  In this case, the agent was a “plant pest” bacterium so-designated by a federal agency going by the interesting acronym “APHIS” – only a one-letter keyboard typo away from “aphid,” which would have other agricultural connotations.

But we digress.

Anyway, APHIS can “allow[] the commercialization and sale” of genetically modified seeds for agricultural use “only after a strenuous investigation process and only based on sound science.”  2017 WL 633815, at *1-2.  According to plaintiffs, herbicides for such GMOs are “custom[arily]” released at the same time as “complete crop system[s].” Id. at *2.  Plaintiffs’ injury claim was based on the allegation that the defendant released seeds for a genetically engineered crop, but did not simultaneously release a new herbicide − resulting in the “old” herbicide being used. Id.

Bader Farms was non-diverse, but the defendant removed it to federal court anyway, alleging Grable-based federal question jurisdiction, id. – something our drug/device clients have also attempted, unfortunately with limited success.  However, in Bader Farm the defendant succeeded and the removal stuck.  The court’s Grable rationale should prove useful to our clients as well.

One count of the plaintiffs’ complaint, for “fraudulent concealment,” “present[ed] a substantial federal question” under Grable.  Id. at *2.  That was all that was necessary to deny remand, whether the other counts were preempted (or not) didn’t matter:

The fraudulent conduct alleged in the petition is that “[defendant] knew of [APHIS’s and others’] ignorance of the truth and intentionally withheld the truth about its product and its risks,” and that “[defendant] intended that [APHIS and others] should act in ignorance in carrying out their…oversight responsibilities.”

Id.  That sure sounds like an allegation of fraud on a federal agency – and indeed the citation of Buckman Co. v. Plaintiffs Legal Committee, 531 U.S. 341 (2001), in Bader Farms was how we became aware of the decision.

The fraudulent concealment allegation was premised on plaintiffs’ assertion of a duty allegedly owed to the federal agency APHIS. “Plaintiffs must necessarily prove . . . that [defendant] had a duty to inform APHIS regarding the” risk in question.  2017 WL 633815, at *3.  Whether such a duty was owed to a federal agency constituted a substantial federal question justifying removal:

[P]laintiffs cannot dictate what duty was owed to APHIS, nor what kind of information should be material to APHIS’s decisions.  Nor can plaintiffs dictate the criteria under which APHIS was purportedly unable to perform its regulatory duties.

Id.  Rather, “the information [defendant] is required to disclose” was “set out in federal regulations.”  Id. (regulatory citations omitted).

The Buckman citation in Bader Farms did not involve preemption (the court did not have to reach that issue to deny remand), but instead concerned state-law litigation over what duties that the defendant owed to APHIS, the relevant federal regulatory agency.  Buckman held that “whether federal regulatory bodies fulfilled their duties with respect to the entities they regulate is ‘inherently federal in character.’”  2017 WL 633815, at *3 (Buckman citation omitted).  This type of question was both “substantial” and “federal”:

Count VII [for fraudulent concealment] is in a way a collateral attack on the validity of APHIS’s decision to deregulate the new seeds.  Despite plaintiffs’ argument that they are not challenging the agency decision itself, they can only succeed on that count if they establish that the agency decision was incorrect due to defendant’s fraudulent concealment.  Under these circumstances, disposition of Count VII presents a substantial federal question.

Id. (emphasis added).  Since “the outcome of the fraudulent concealment claim necessarily depends on the interpretation and application of the federal regulatory process,” remand was denied solely due to a substantial federal question in that one count.  Id.

An argument similar to Bader Farms can be made in drug/device cases where fraud on the FDA is alleged, even though a preemption defense, by itself, might not be sufficient to support removal.  As in Bader Farms, allegations that information was concealed or withheld from the FDA would require a court in an ostensibly state-law action to decide if the defendant had a duty, under relevant regulations, to supply the information in question and whether the information was “material” under the FDCA scheme.  Likewise, such claims only cause injury if the “agency decision was incorrect” as found by a state-law jury.  Thus, as in Bader Farms the substantial federal question would not be preemption, but rather the scope of disclosure duties owed to the FDA and whether or not those duties were met.  Finally, removability needs nothing more than that agency-fraud-based claim to succeed – whether that claim, or any other pleaded claim, was preempted (or “completely preempted”) isn’t decisive on the removal/remand issue.

Even though Buckman was decided back in 2001, plaintiffs still like to plead fraud on the FDA – even though Buckman preempts such claims.  But the availability of a federal preemption defense alone has not been enough in so many cases to support removal.  Bader Farms shows the value of focusing on a different federal issue, the nature of the duty owed to the FDA, as the substantial federal question.  Nor can plaintiffs “fix” things by amending out the offending count, as removability is determined at the moment of removal.

Now, at least in the Eastern District of Missouri, there is persuasive precedent supporting removal of agency fraud claims as presenting substantial federal questions.