We’re not law professors.  We don’t typically read opinions with an eye to where they fit (or don’t) in some grand jurisprudential scheme.  We’re litigators, so we read opinions with an eye to whether they can help our clients win.

Thus, when Johnson v. American Towers, LLC,___ F.3d ___, 2015 WL 1321535 (4th Cir. March 25, 2015), popped up in one of our automatic searches (due to a stray citation to Riegel v. Medtronic, Inc., 552 U.S. 312 (2008)), we were inclined to pass it by, since preemption under the Federal Communications Act is not exactly something that arises in our sandbox very often.  If you have an FCC tort preemption issue, you’ll want to read Johnson for that reason, but our discussion here won’t interest you much.

Continue Reading “Common” Defense No Bar to Removal in Preemption Case

This just happened yesterday down in Texas.  The defendant in this 77-plaintiff action raised fraudulent joinder/misjoinder and lack of personal jurisdiction in removing the case. Locke v. Ethicon, C.A. No. 4:14-CV-2648, slip op. (S.D. Tex. Nov. 10, 2014).  The defendant won, as the out-of-state (and non-diverse) plaintiffs were dismissed due to lack of personal jurisdiction under Daimler AG v. Bauman, 134 S. Ct. 746 (2014).  No other remand-related grounds (such as fraudulent (mis)joinder) had to be reached.

Of even greater importance is the “how to” aspect of Locke.  Can a court determining a remand petition decide a question of personal jurisdiction (the Bauman issue) prior to a question of subject matter jurisdiction (fraudulent (mis)joinder)?  The Locke court said “yes,” relying on Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 586-87 (1999).  Slip op. at 3-4 & n.3.  That’s critical, because unless a court can reach the Bauman issue first, it would have to find some basis to dismiss the non-diverse plaintiffs under fraudulent (mis)joinder standards – and those standards are much more difficult to satisfy.  The Supreme Court, however, had resolved this issue in Ruhrgas.

[T]he Court notes that the two motions present the Court with a procedural dilemma.  If the Court addresses the question of subject matter jurisdiction first, then [one of the plaintiffs’] New Jersey citizenship destroys diversity, thereby justifying remand for the Texas state court to resolve the personal jurisdiction issue.  Alternatively, if the Court addresses the question of personal jurisdiction first and finds for the defendants, dismissal would simultaneously reduce the number of plaintiffs to one and permit the Court to retain jurisdiction over the case.  It is well settled that a district court has discretion to dispose of jurisdictional questions in a manner that promotes judicial economy.

Locke, slip op. at 3 (citing Ruhrgas and other cases following it).  This is the first time (we ran a search) that Ruhrgas has been invoked in a fraudulent (mis)joinder remand where the basis for fraudulent joinder is inability of nondiverse plaintiffs to obtain personal jurisdiction over the defendant under Bauman.

Continue Reading Breaking News: Win On Post-Bauman Personal Jurisdiction Avoids Fraudulent (Mis)Joinder Pitfalls

Like pharmaceutical and medical device manufacturers, it is not surprising that compounding pharmacies facing personal injury/products liability litigation prefer the typically more defense-friendly federal arena over the often more challenging (to put it mildly) state court system.  But as today’s case demonstrates, that may not be the easiest path for compounders to follow.

The case

Some plaintiff lawyers seem horrified at the prospect of showing up in federal court.  How else to explain the machinations to prevent diversity jurisdiction?  What is it about federal courts that they dislike so much?  The assignment of one judge who will stick with the case and thereby come to learn its frailties?  The proclivity

This post is from the non-Reed Smith side of the blog only.

We often struggle for a clever title or catchy phrase on which to hang our posts.  Hence, the frequent sidebars into pop culture, sports, history, and music.  But today, the court handed us our opening on a silver platter – permitted gamesmanship v.

Things are often done differently down in Louisiana.  For one thing, Louisiana is the nation’s only civil law state.  It’s also the only state not to have enacted the Uniform Commercial Code.  We blogged about one such difference before – the state’s unique claim for “redhibition.”  Today we’re examining another Louisiana legal peculiarity.  This peculiarity

We have reported before on defendants’ efforts to remove cases from the Philadelphia County Court of Common Pleas to federal court.  We don’t spend a lot of time examining their motives, other than to express our wholehearted approval of the strategy and noting at times that the Philadelphia CCP has taken its share of criticism. 

(This post is from the Cozen side of the blog only.)

Whenever you remove a complaint that is an obvious case of fraudulent joinder, you think to yourself, “Why don’t they just admit it?”  “They” being the plaintiffs’ lawyers, and the admission being that they joined the hometown doctor or pharmacy or sales rep solely 

A while ago, when we posted primarily about TwIqbal and removed complaints, we commented briefly on a different, but related question – whether TwIqbal (that is to say the Supreme Court’s landmark pleading decisions in Bell Atlantic v. Twombly and Ashcroft v. Iqbal) also applied to a fraudulent joinder evaluation of a plaintiff’s allegations for purposes of remand.  We said that we didn’t think so, but that there wasn’t much law, and left it at that.  We recently returned to this same issue after being tapped for some in-firm (this is the Reed Smith side) continuing legal education on removal issues.

It turns out that, while we’d still say application of TwIqbal is a minority position in the remand/fraudulent joinder context, it’s better backed precedentially than we had previously thought.  In a couple of circuits it is backed (at least arguably) by pre-TwIqbal appellate precedent authorizing use of Rule 12 standards in fraudulent joinder cases.  See Simpson v. Thomure, 484 F.3d 1081, 1084 (8th Cir. 2007); Smallwood v. Illinois Central Railroad Co., 385 F.3d 568, 573 (5th Cir. 2003).

Continue Reading TwIqbal In The Remand Context?

We’ve heard the term used often enough.  New York is the financial nerve center of our country.  A kitchen is the nerve center of a home.  It’s the title of show on the Science Channel.  There’s even the medical definition: a cluster of nerve cells governing a specific bodily process.  Perhaps it was actually that definition that the Supreme Court had in mind when it adopted the “nerve center” test for determining a company’s principal place of business.  According to the Supreme Court, a corporation’s principal place of business is “the place where the corporation’s high level officers direct, control, and coordinate the corporation’s activities.”  Hertz Corp. v Friend, 130 S.Ct. 1181, 1186 (2010).  But what does that mean and why is it important for us?

The second question is easy – a lot of prescription drug/device litigation originates in state courts that defendants would prefer not to be in.  For instance, plaintiffs from all around the country have flocked to both Pennsylvania and New Jersey in an effort to avoid federal court.  That’s because, over the years, a lot of large manufacturers have chosen to locate here for what we assume to be a host of good and legitimate business reasons.  But the litigation climate in both these states leaves quite a bit to be desired.  So, to get to federal court, you have to know (or be prepared to argue) where your client’s “nerve center” is.

That was the one of the central questions in Moore v. Johnson & Johnson, No. 12-490, slip op. (E.D. Pa. Nov. 1, 2012).  It’s a Tylenol case and the Tylenol in question was produced by a subsidiary of Johnson & Johnson, McNeil-PPC, Inc. (also a defendant) at a Pennsylvania facility.  Plaintiff also sued two J&J executives and Costco (where plaintiff bought the Tylenol).  Plaintiff is from Washington state but brought her suit in Pennsylvania.  Defendants removed and plaintiffs filed a motion to remand arguing in part that McNeil-PPC is a citizen of Pennsylvania and therefore barred from removing a Pennsylvania state court action.  Slip op. at 2.  Plaintiff contended that McNeil’s “nerve center” was in Pennsylvania because three out of four of its highest-ranking officers are based in Pennsylvania.  Id. at 5.

Continue Reading What is a Nerve Center?