We’d thought, because that’s what we’d seen, that subject-matter jurisdiction/fraudulent joinder issues in would-be diversity cases in federal court are to be decided early in the litigation.  Turns out that’s not necessarily so – at least according to the Second Circuit’s recent decision in a Zyprexa case, Brown v. Eli Lilly & Co., ___ F.3d ___, 2011 WL 3625105, slip op. (2d Cir. Aug. 18, 2011).
Brown was originally filed in Mississippi state court, and the plaintiff purported to bring negligent discharge claims against two local hospitals – along with the usual Zyprexa allegations – in order to destroy diversity and keep the case out of federal court.
The procedural posture (how the case got where it was) can only be described as “convoluted.”
Brown was originally filed in Mississippi state court in October, 2007.  Before removal, both hospitals filed dispositive motions in state court on statutory issues unique to:  (1) malpractice claims, and (2) Mississippi community hospitals.
Brown was removed to federal court in January, 2008.  That’s more than 30 days after suit was filed, which is usually a no-no, but apparently the plaintiff didn’t notice, so timeliness of removal was waived.  Fraudulent joinder of the hospitals was alleged, tracking the hospitals’ pending motions.
A couple of months later, in rather leisurely fashion, the plaintiff moved to remand.
Later, in August, 2008, the MDL got involved and the case was transferred to the Zyprexa MDL – with all of the various motions still pending (nobody – plaintiff, defendants, or the court – seemed to have pressed things much during this seven-month period).
The Zyprexa MDL judge, of course, is Hon. Jack Weinberg, who rarely does things the same way as any other judge.  All these preliminaries are recounted at 2011 WL 3625105, *2-3.Continue Reading The Long And Weinstein Road To Fraudulent Joinder