STACY SHERFEY, as an administrator of the estate of Tracen Sherfey, a minor, deceased, STACEY SHERFEY, and CIVIL ACTION NEIL SHERFEY, Plaintiffs,
JOHNSON & JOHNSON, et al., Defendants.
ROBERT F. KELLY, Sr., District Judge.
Presently before the Court is Plaintiffs, Stacy Sherfey, as the administrator of the Estate of Tracen Sherfey, a minor, deceased, Stacy Sherfey, and Neil Sherfey's, (collectively, "Plaintiffs"), Motion to Remand, Defendants, Johnson & Johnson ("J&J"), McNeil-PPC, Inc. ("McNeil"), Johnson & Johnson Sales & Logistics Company, LLC ("JJSLC"), Wal-Mart Stores, Inc. ("Wal-Mart"), Peter B. Luther, Ashley A. McEvoy, Gary Benedict, Edwin K. Kuffner, M.D., Lorraine K. Bailer, William C. Weldon, Colleen Goggins, Rosemary Crane, Inmar Inc. ("Inmar"), Carolina Supply Chain Services, LLC ("CSCS"), and Carolina Logistics Services, LLC's ("CLS") (collectively, "Defendants"), Responses, and Plaintiffs' Replies thereto. For the reasons stated below, the Motion to Remand is denied.
Plaintiffs filed the Complaint on June 27, 2012, against Defendants in the Court of Common Pleas of Philadelphia County. Plaintiffs assert in their Complaint that: (1) J&J is a New Jersey corporation with its principal place of business in New Brunswick, New Jersey. Compl. ¶ 30; (2) McNeil is a corporation organized under the laws of the State of New Jersey, with its principal place of business in Fort Washington, Pennsylvania. Id . ¶ 31; (3) JJSL is a New Jersey limited liability company with its principal place of business in Skillman, New Jersey. Id . ¶ 32; (4) Wal-Mart is a corporation existing under the laws of the State of Delaware with its principal place of business in Arkansas. Id . ¶ 33; (5) Defendant, Peter Luther ("Luther"), is President of McNeil, and a resident of New Jersey. Id . ¶¶ 34, 92; (6) Defendant, Ashley McEvoy ("McEvoy"), is President of McNeil Consumer Healthcare, and a resident of Pennsylvania. Id . ¶¶ 35, 210; (7) Defendant, Gary Benedict ("Benedict"), is Vice-President of Sales and Strategy at J&J and Vice-President of Sales at McNeil, and is a resident of Pennsylvania. Id . ¶¶ 36, 245; (8) Defendant, Edwin K. Kuffner, M.D. ("Dr. Kuffner"), is a Senior Medical Director of McNeil, and a resident of Pennsylvania. Id . ¶¶ 37, 267; (9) Defendant, Lorraine Bailer ("Bailer"), is the Supply Chain Director at McNeil, and a resident of Pennsylvania. Id . ¶¶ 38, 255; (10) Defendant, William C. Weldon ("Weldon"), is J&J's Chairman of the Board and Chief Executive Officer, and is a resident of Pennsylvania. Id . ¶¶ 39, 192; (11) Defendant, Colleen Goggins ("Goggins"), is Worldwide Chairman of J&J's Consumer Group, and is a resident of New Jersey. Id . ¶¶ 40, 201; (12) Defendant, Rosemary Crane ("Crane"), was a Company Group Chairperson for J&J, and is a resident of Pennsylvania. Id . ¶¶ 41, 233; (13) Inmar is a North Carolina corporation with its principal place of business in North Carolina. Id . ¶ 42; and (14) CSCS and CLS are limited liability companies with principal places of business in North Carolina. Id . ¶¶ 43-44.
This is a strict liability, breach of warranty, and negligence action brought by Plaintiffs, Stacy and Neil Sherfey, against the manufacturers, distributors, and retailers of allegedly defective and recalled Infant's Tylenol, which they claim killed their two-week-old son, Tracen Sherfey ("Tracen"). In their Complaint, Plaintiffs allege that on February 16, 2009, Stacy Sherfey gave Tracen a recommended dose of Infant's Tylenol based on the suggestion of Tracen's doctor. Id . ¶ 103. The following morning, Stacy Sherfey gave Tracen another dose of Infant's Tylenol according to the packaging instructions, and later this same day, gave Tracen another dose. Id . ¶¶ 104-105. Tracen began vomiting blood, and Stacy Sherfey took him to the local emergency room. Id . Tracen was later airlifted to Children's Primary Hospital in Salt Lake City, Utah. Id . ¶ 107. On February 19, 2009, Tracen died from acute liver failure. Id . ¶ 108.
Plaintiffs assert the following causes of action: (1) Count I- Strict Liability against J&J, McNeil, JJSLC, and Wal-Mart; (2) Count II- another Count of Strict Liability against J&J, McNeil, JJSLC, and Wal-Mart; (3) Count III- Recklessness against J&J, McNeil, JJSLC, and Wal-Mart; (4) Count IV- Negligence against J&J, McNeil, JJSLC, and Wal-Mart; (5) Counts V-XII-Negligence against Weldon, Goggins, McEvoy, Luther, Crane, Benedict, Bailer, and Dr. Kuffner; (6) Count XIII- Breach of Express Warranty against J&J, McNeil, JJSLC, and Wal-Mart; (7) Count XIV- Breach of Implied Warranty against J&J, McNeil, JJSLC, and Wal-Mart; (8) Count XV- Negligent Infliction of Emotional Distress against J&J, McNeil, JJSLC, Wal-Mart, Weldon, Goggins, McEvoy, Luther, Crane, Benedict, Bailer, and Dr. Kuffner; (9) Count XVI- Violation of Nevada Consumer Protection Law against all Defendants; (10) Count XVII- Civil Conspiracy against all Defendants; (11) Count XVIII- Aiding and Abetting against Inmar, CSCS, and CLS; and (12) Count XIX- Punitive Damages against all Defendants.
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 McNeil's principal place of business is in Skillman, New Jersey, not Fort Washington, Pennsylvania, as Plaintiffs allege, and therefore, is not a "forum defendant" precluded from removing this action to this Court by 28 U.S.C. § 1441(b). (Defs.' Not. Removal ¶ 20.) Defendants also claim that the forum defendant rule is inapplicable because Weldon, McEvoy, Benedict, Dr. Kuffner, Bailer, and Crane are citizens of Pennsylvania and have had been fraudulently joined in this action. (Id. ¶ 21.)
Plaintiffs filed the instant Motion to Remand on August 12, 2012. (Doc. No. 18). Defendants filed Responses to this Motion on September 28, 2012. (Doc. Nos. 34, 36.) As noted, this case was originally assigned to Judge McLaughlin. At that time, Judge McLaughlin also had a very similar action on her docket, Moore v. Johnson & Johnson, No. 12-490. In that case, Plaintiffs, a husband and wife, filed suit in the Philadelphia Court of Common Pleas against seventeen defendants, asserting twelve separate claims, all stemming from the death of their son from ingesting Children's Tylenol. (Doc. No. 1.) These Defendants included five common corporate Defendants that were named in the instant action, and four common individual Defendants. (Id.) The common corporate Defendants are J&J, McNeil, Inmar, CSCS, and CLS. The common individual Defendants are Weldon, Goggins, Crane, and Luther. Moreover, the parties are represented by the same counsel in both actions.
The instant action and the Moore case have followed almost identical procedural histories. Defendants in Moore removed that action from the Philadelphia Court of Common Pleas to this Court on January 30, 2012. (Doc. No. 1.) Plaintiffs filed a Motion to Remand on February 19, 2012. (Doc. No. 19.) After the parties filed several briefs in support of their positions, Judge McLaughlin rendered a decision on November 1, 2012, denying the Remand. See Moore v. Johnson & Johnson , 907 F.Supp.2d 646 (E.D. Pa. 2012). In that decision, Judge McLaughlin determined that McNeil's principal place of business is Skillman, New Jersey, and as a New Jersey citizen, McNeil was permitted to remove the underlying Pennsylvania state court action to this Court. Id. at 661. Judge McLaughlin further concluded that J&J executives and Pennsylvania residents, Weldon and Crane, were fraudulently joined and, thus, their Pennsylvania citizenship presented no bar to removal. Id. at 662. Plaintiffs, subsequently, filed a Motion for Reconsideration on November 13, 2012. (Doc. No. 75.) After extensive litigation by the parties on the issues in the Motion for Reconsideration, including several briefings, an evidentiary hearing on July 19, 2013, and post-evidentiary filings, Judge McLaughlin denied the Motion for Reconsideration and reiterated her findings. See Moore v. Johnson & Johnson, No. 12-490, 2013 WL 5298573, at *1 (E.D. Pa. Sept. 20, 2013).
On October 16, 2013, we removed this matter from civil suspense and placed it back on our active docket, and the parties were ordered to file supplemental briefs solely on the issue of fraudulent joinder. (Doc. No. 45.) Oral argument on this issue was scheduled for December 6, 2013. The parties filed such briefs on November 1, 2013. (Doc. Nos. 46-49.) On December 3, 2013, counsel for Defendants sent this Court a letter-brief requesting us to allow them to address an issue at the scheduled oral argument on December 6, 2013, that they had not address in prior briefings due to their own oversight. The issue that Defendants requested to address concerned the application of Pennsylvania's statute of limitations to the individual Defendants in this action. On this same date, Plaintiffs' counsel faxed us a letter objecting to this request stating that this issue has never been properly raised or preserved. Also on this same date, we informed both counsel that we would allow Defendants to address this issue at the oral argument, but would give Plaintiffs the opportunity to fully address and brief this issue thereafter. Oral argument was held on December 6, 2013, and the parties were permitted to address the issue of the statute of limitations. On December 16, 2013, Plaintiffs' counsel sent us a detailed letter-brief addressing this issue, and Defendants' counsel sent a letter-brief in response on December 20, 2013.
A. McNeil's Principal Place of Business
As noted above, counsel for all parties agreed that the remand issues in this case are almost identical to those issues before Judge McLaughlin in Moore. In fact, the issue of McNeil's principal place of business is one of the issues before us. Because the issue is identical, all counsel agreed that we should not decide the Motion to Remand until Judge McLaughlin rendered her decision in Moore. On November 1, 2012, Judge McLaughlin denied the Remand, and determined that McNeil's principal place of business is Skillman, New Jersey. See Moore , 907 F.Supp.2d at 661. As also noted, Plaintiffs then filed a Motion for Reconsideration, and counsel again agreed that this Court should stay its decision on the Motion for Remand until Judge McLaughlin ruled. On September 20, 2013, Judge McLaughlin denied the Motion for Reconsideration and reiterated her findings, once again holding that McNeil's principal place of business is in Skillman, New Jersey. See Moore, 2013 WL 5298573, at *1.
We believe it is important to note that there are at least three other pending actions in this District against McNeil for damages related to the distribution of alleged defective Infant and Children's Tylenol in which McNeil has removed the state action to the Eastern District of Pennsylvania, and Plaintiffs have filed motions to remand back to state court. In each, plaintiffs assert that McNeil's principal place of business is in Fort Washington, Pennsylvania and defendants argue that it is in Skillman, New Jersey. In each of these actions, the presiding Court indicated that it was either waiting for Judge McLaughlin to render her decision in Moore before deciding the issue of McNeil's principal place of business and/or relied on her initial decision finding that McNeil's principal place of business is in Skillman, New Jersey.
In Brown v. Johnson & Johnson, et al., No. 12-4929, plaintiffs moved to remand arguing that McNeil is a citizen of Pennsylvania and that under the "forum defendant" rule, is barred from removing this action to a federal court sitting in Pennsylvania. The Honorable Paul Diamond noted that Plaintiffs relied on the same evidence presented to Judge McLaughlin in Moore. (Doc. No. 36.) Judge Diamond also noted that Judge McLaughlin ruled that removal was proper because McNeil's principal place of business is in Skillman, New Jersey. (Id.) In coming to his decision denying remand, on February 8, 2013, Judge Diamond stated that "I agree with Judge McLaughlin and adopt her reasoning here." (Id.) The docket indicates that Plaintiffs elected not to file a motion for reconsideration.
Likewise, in another Children's Tylenol case before Judge Diamond that was also removed to this Court, and plaintiff filed a motion to remand arguing that McNeil's principal place of business is in Pennsylvania, Judge Diamond denied the motion on October 12, 2012, without prejudice, and stated that "[P]laintiff may resubmit her Motion after Judge McLaughlin rules on the remand question in Moore." See Epperson v. Johnson & Johnson, et al., Civil Action No. 12-1533 (Doc. No. 14.) Plaintiff, however, elected to not re-file the motion for remand after Judge McLaughlin's September 20, 2013 decision denying reconsideration.
A very similar action to the instant case is also presently before the Honorable Gene Pratter. See Ardt v. Johnson & Johnson, et al., No. 12-6633. Unlike Plaintiffs in Brown and Epperson, plaintiffs in Ardt,  like the case before us, also brought causes of action against individual corporate officers, Luther, McEvoy, Benedict, Dr. Kuffner, Bailer, Weldon, Goggins, and Crane. Defendants removed the action from state court to this Court, and plaintiffs filed a Motion to Remand. Judge Pratter placed the action in suspense on August 26, 2013, pending the "outcome of the motion to remand in Moore." (Doc. No. 27.) On October 8, 2013, Judge Pratter ordered that in consideration of the recent decision in Moore, the parties were to file supplemental briefs relating to the Moore decision and also scheduled oral argument to be heard in December 2013. (Doc. 28.) To date, Judge Pratter has yet to render a decision on the Motion to Remand.
We discuss these related actions because all the motions to remand in those actions involve the issue of whether McNeil's principal place of business is in Skillman, New Jersey, or Fort Washington, Pennsylvania, and in all these actions, the presiding Judges decided to wait for Judge McLaughlin to hand down her decision in Moore. As noted above, after extensive litigation by the parties on the issues in the Motion for Reconsideration, including several briefings, an evidentiary hearing on July 19, 2013, and post-evidentiary filings, Judge McLaughlin denied the Motion for Reconsideration and reiterated her findings. See Moore, 2013; WL 5298573, at *1. In the instant action, after a careful reading of Judge McLaughlin's decisions in Moore and in consideration of the numerous briefings filed by the parties before us, we agree with the Court's rationale in Moore and adopt it here. Accordingly, we find that McNeil's principal place of business is in Skillman, New Jersey.
B. Fraudulent Joinder
We now move onto the issue of whether any one or all of the individual Pennsylvania Defendants in this action, Weldon, McEvoy, Benedict, Dr. Kuffner, Bailer and Crane,  were fraudulently joined as a Defendant in this action. Under 28 U.S.C. § 1447(c), a plaintiff may remand an action to state court if removal was "procedurally defective." Snider v. Sterling Airways, Inc., No. 12-3054 , 2013 WL 159813, at *1 (E.D. Pa. Jan. 15, 2013). A removal is procedurally defective if it violates the "forum defendant rule." Id . Under the forum defendant rule, a civil action that is "otherwise removable solely on the basis of [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." 28 U.S.C. § 1441(b).
"Removal statutes are to be strictly construed, with all doubts to be resolved in favor of remand." Batoff v. State Farm Ins. Co. , 977 F.2d 848, 851 (3d Cir. 1992). "The removing party carries a heavy burden of persuasion" in establishing fraudulent joinder. Id . "Joinder is fraudulent where there is no reasonable basis in fact or colorable ground supporting the claim against the joined defendant, or no real intention in good faith to prosecute the action against the defendant or seek a joint judgment." Id.
"In evaluating the alleged fraud, the district court must focus on the plaintiff's complaint at the time the petition for removal was filed, " and "must assume as true all factual allegations of the complaint." Id. at 851-52. The court must also "resolve any uncertainties as to the current state of controlling substantive law in favor of the plaintiff." Id. at 852. Significantly, the court's inquiry into the validity of a complaint when faced with an assertion of fraudulent joinder is less searching than that triggered upon the filing of a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). Id ...