United States District Court, E.D. Pennsylvania
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For MURIEL KALLMAN, STANLEY KALLMAN, W/H, Plaintiffs: ROSEMARY PINTO, LEAD ATTORNEY, FELDMAN & PINTO PC, PHILADELPHIA, PA.
For MD CRAIG ARONCHICK, Defendant: GEORGE J. MURPHY, STEPHEN J. FINLEY, GIBBONS PC, PHILADELPHIA, PA.
For SALIX PHARMACEUTICALS, INC., SALIX PHARMACEUTICALS, LTD., INKINE PHARMACEUTICAL COMPANY, INC., Defendants: JOSEPH E. O'NEIL, LEAD ATTORNEY, LAVIN O'NEIL RICCI CEDRONE & DISIPIO, PHILADELPHIA, PA.
ROBERT F. KELLY, SENIOR UNITED STATES DISTRICT JUDGE.
Presently before the Court is Plaintiffs, Murial Kallman and Stanley Kallman's (collectively, " Plaintiffs" ), Motion to Remand, Defendants, Craig Aronchick, M.D. (" Dr. Aronchick" ), Salix Pharmaceuticals, Inc., Salix Pharmaceuticals, Ltd. (" Salix Defendants" ), and InKine Pharmaceutical Company, Inc.'s (" InKine" ) (collectively, " Defendants" ), Response, and Plaintiffs' Reply. For the reasons stated below, the Motion for Remand is denied.
Plaintiffs filed the instant Complaint on August 8, 2013, against Defendants in the Court of Common Pleas of Philadelphia County alleging that Murial Kallman suffers with " Stage 4 Kidney Disease" as a result of ingesting the Salix Defendants' prescription medication known as " OsmoPrep."  Am. Compl. ¶ ¶ 14-15. Plaintiffs allege that on or about December 20, 2011, Murial Kallman orally ingested OsmoPrep tablets in preparation for a colonoscopy without knowledge of the significant health risks it created for consumers. Id. ¶ ¶ 14, 49. Plaintiffs assert that in January of 2012, after taking OsmoPrep, Murial Kallman had a routine blood test which indicated that her Glomerular Filtration Rate was at 18. Id. ¶ 15. As a result of this test, Plaintiffs claim that she underwent a renal biopsy which indicated that she suffers from " Stage 4 Kidney Disease." Id.
The Salix Defendants and InKine were served with Plaintiffs' Complaint on August 9, 2013. Also on this date, Defendants removed this action to this Court based on diversity of citizenship and the inapplicability of the forum defendant rule set forth in 28 U.S.C. § 1441(b)(2). Defendants assert that the forum defendant rule is inapplicable because Dr. Aronchick had not been properly joined and served with Plaintiffs' Complaint at the time of the removal and, in the alternative, had been fraudulently joined in this action. (Defs' Resp. Mot. Remand at 4.) The Salix Defendants and InKine filed Motions to Dismiss for failure to state a claim on August 29, 2013 (Doc. Nos. 6-7), and Plaintiffs filed the instant Motion to Remand on August 30, 2013. (Doc. No. 8).
Plaintiffs subsequently filed an Amended Complaint on September 12, 2013. (Doc. No. 12.) In the Amended Complaint, Plaintiff, Muriel Kallman, asserts the following causes of action: (1) Count I- Fraud against all Defendants; (2) Count II- Negligent Misrepresentation against all Defendants; (3) Count III- Strict Liability (Design Defect) against all Defendants; (4) Count IV- Strict Liability (Failure to Warn) against all Defendants; (5) Count V- Negligence against the Salix Defendants; (6) Count VI- Negligence against Dr. Aronchick; (7) Count VII- Negligent Undertaking against Dr. Aronchick; (8) Count VIII- Civil Conspiracy against all Defendants; (9) Count IX- Breach of Implied Warranty of Merchantability against the Salix Defendants; (10) Count X- Breach of Warranty of Fitness for a Particular Purpose against the Salix Defendants; (11) Count XI- Breach of Express Warranty against the Salix Defendants; (12) Count XII- Violation of Consumer Protection Laws against all Defendants; (13) Count XIII- Failure to Supply Pre-Complaint Discovery;  (14) Count XIV- Claims under the New Jersey Product Liability Act against all Defendants; and (15) Count XV- Alter Ego against the Salix Defendants. In addition, Plaintiff, Stanley Kallman, asserts a claim for Loss of Consortium against all Defendants (Count XVI).
The Salix Defendants and InKine filed additional Motions to Dismiss on September 26, 2013. (Doc. Nos. 15-16.) Dr. Aronchick also filed a Motion to Dismiss on this same date. (Doc. 17.) Plaintiffs filed their Responses to these Motions on October 17, 2013. (Doc. Nos. 21-23.)
A. Choice of Law
Plaintiffs assert that their Complaint and Amended Complaint are " designed to state causes of action under both Pennsylvania and New Jersey law since without discovery Plaintiff[s] [do] not have enough information to make a choice of law analysis." (Pls.' Resp. Mot. Dismiss at 9-10.) Plaintiffs further state that " [a]s to the Salix Defendants, it may be that New Jersey law applies to the Product Liability claims, but as to Dr. Aronchick the analysis is complicated and Plaintiff's [sic] do not have the necessary discovery to argue one way or the other." (Id. at 10.) However, a choice of law analysis is necessary in order for this Court to determine if Plaintiffs have any possible cause of action against Dr. Aronchick under Pennsylvania or New Jersey law and to make a determination whether Dr. Aronchick was fraudulently joined.
We first note that the Court of Appeals for the Third Circuit (" Third Circuit" ) has stated that " '[a] federal court cannot engage in a choice of law analysis where diversity jurisdiction is not first established,' precluding a court from performing a choice of law analysis at the fraudulent joinder stage so long as the plaintiff's proffered choice of law is colorable." State Farm Fire and Cas. Co. v. Abels, 770 F.2d 26, 32-33 n.10; see also Moore v. Johnson & Johnson, 907 F.Supp.2d 646, 662-63 (E.D. Pa. 2012); Gibboni
v. Hyatt Corp., No. 10-2629, 2011 WL 1045047, at *3 n.1 (E.D. Pa. Mar. 22, 2011).
However, diversity jurisdiction is established in this Court. As noted, Plaintiffs are residents of New Jersey. The
Salix Defendants' principal places of business are in North Carolina and Delaware, and InKine's principal place of business is in North Carolina. Am. Compl. ¶ ¶ 2-4. Dr. Aronchick is a Pennsylvania resident. Even if we were to determine that Dr. Aronchick was not fraudulently joined, complete diversity of citizenship would still exist between all the parties. Thus, we will make a choice of law analysis.
This Court must apply the forum's choice of law rules. Chin v. Chrysler, LLC, 538 F.3d 272, 278 (3d Cir. 2008); Shuder v. McDonald's Corp., 859 F.2d 266, 269 (3d Cir. 1988). Pennsylvania's choice of law approach adopts a " flexible rule which permits analysis of the policies and interests underlying the particular issue before the court."
United Air Lines, Inc., 416 Pa. 1, 203 A.2d 796, 805 (Pa. 1964); See also Knipe v. SmithKline Beecham, 583 F.Supp.2d 602, 613 (E.D. Pa. 2008). Pennsylvania's analysis consists of three steps. First, the court must determine whether a real conflict exists, that is, whether these states would actually treat the relevant issues any differently. Hammersmith v. TIG Ins. Co., 480 F.3d 220, 229-30 (3d Cir. 2007). If there is no substantive difference between the laws of the competing states, no real conflict exists and forum law applies. Id. at 230. Where a real conflict exists, the court moves to the second step and examines the governmental policies underlying each law in order to classify the conflict as true, false or an unprovided for situation. Id. A false conflict occurs where only one state's interests would be impaired, and the law of the interested state applies. LeJeune v. Bliss-Salem Inc., 85 F.3d 1069, 1071 (3d Cir. 1996). Where, on the other hand, each jurisdiction has a governmental policy or interest that would be impaired by the application of the other state's law, a true conflict exists. Id. Where there is a true conflict, the court turns to the third step to " determine which state has the ...