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In re Zoloft (Sertraline Hydrochloride) Products Liability Litigation

United States District Court, E.D. Pennsylvania

June 20, 2017

IN RE ZOLOFT (SERTRALINE HYDROCHLORIDE) PRODUCTS LIABILITY LITIGATION
v.
Pfizer, Inc., et al. Civil Action No. 16-1438 THIS DOCUMENT RELATES TO: D.B. No. 12-MD-2342

          MEMORANDUM OPINION

          HON. CYNTHIA M. RUFE Judge.

         Plaintiffs brought suit against Pfizer, Inc., Pfizer International LLC, J.B. Roerig & Co. and Greenstone LLC (collectively, “Pfizer”) and McKesson Inc., alleging numerous state-law claims, including failure to warn, negligence, and fraudulent concealment. Plaintiffs filed the action in California state court, Defendants removed it to federal court on the basis of diversity jurisdiction, and the case was transferred to this Court as part of the Zoloft Multidistrict Litigation (“MDL”).

         Plaintiffs have moved to remand the matter to California state court for lack of diversity jurisdiction, as Plaintiffs are California citizens and Defendant McKesson is a California corporation. Defendants argue that the lone California defendant, McKesson, is fraudulently joined and therefore complete diversity exists between the parties. This Court has considered the issue before, in both the Avandia and Zoloft MDLs. Consistent with those earlier decisions, the Court holds that Plaintiffs have pled sufficient facts to assert a claim against McKesson, [1] but that the history of the Zoloft litigation shows that Plaintiffs have no real intention to pursue claims against McKesson, such that McKesson was fraudulently joined.[2] Therefore, Plaintiffs' motion to remand will be denied.

         I. BACKGROUND

         Plaintiff D.B. was born in 2014 with a serious birth defect allegedly caused by Zoloft taken during pregnancy by his mother, Plaintiff Julie Parmley.[3] Plaintiffs allege Defendants aggressively marketed and sold Zoloft to pregnant women despite evidence that Zoloft increased the risk for birth defects, without informing doctors or consumers of these risks.[4] The only specific allegations related to McKesson state that McKesson is a Delaware corporation headquartered in California, and “at all times relevant hereto, Defendant McKesson was engaged in the business of researching, designing, developing, licensing, compounding, testing, producing, manufacturing, assembling, processing, packaging, inspecting, labeling, supplying, distributing, selling and/or warranting Zoloft…. Plaintiffs are informed and believe Defendant McKesson distributed the Zoloft that was dispensed to [Parmley].”[5] Plaintiffs also allege that, according to Pfizer's website, McKesson was the single largest distributor of Pfizer's pharmaceutical products.[6]

         II. LEGAL STANDARD

         Removal of a civil action from state to federal court is governed by 28 U.S.C. § 1441. The removal statutes “are to be strictly construed against removal and all doubts should be resolved in favor of remand.”[7] The party removing the case has the burden to prove that federal jurisdiction is proper at all stages of the litigation.[8] As is relevant here, Defendants may only “remove an action on the basis of diversity of citizenship if there is complete diversity between all named plaintiffs and all named defendants, and no defendant is a citizen of the forum State.”[9]

         III. DISCUSSION

         Plaintiffs argue that remand is proper because there is incomplete diversity between the Plaintiffs and all named Defendants.[10] Defendants argue that McKesson is fraudulently joined and therefore should not be considered in any diversity jurisdiction analysis and that, without McKesson, diversity jurisdiction is properly invoked. Defendants therefore seek to “establish that the non-diverse defendant[] [was] ‘fraudulently' named or joined solely to defeat diversity jurisdiction.”[11]

         In order to establish fraudulent joinder, a defendant must prove that “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 defendants or seek a joint judgment.”[12] A claim is colorable if it is not “wholly insubstantial and frivolous” in light of the relevant law.[13] With respect to a claim's factual basis, a “limited piercing of the allegations to discover fraudulent joinder” may be appropriate.[14] The limitation is significant, however, with the permissible inquiry being less probing than the review a district court conducts in deciding a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6).[15] Moreover, “if there is even a possibility that a state court would find that the complaint states a cause of action against any one of the resident defendants, the federal court must find that joinder was proper and remand the case to state court.”[16] A plaintiff's alleged failure to adequately plead a viable cause of action against a defendant must be “obvious according to the settled rules of the state.”[17] The heavy burden of demonstrating that a defendant was fraudulently joined rests with the defendant making the charge.[18] When evaluating a charge of fraudulent joinder, the “district court must resolve all contested issues of substantive fact” and “any uncertainties as to the current state of controlling substantive law in favor of the plaintiff.”[19]

         Defendants first argue that Plaintiffs' Complaint lacks specific allegations necessary to assert a claim against McKesson. The Court has explored, and rejected, this argument in the Avandia MDL, which included numerous motions to remand individual cases involving McKesson to California state court, and where the Court held that similar allegations against McKesson satisfied California's permissive pleading standard for the asserted failure to warn and strict product liability claims.[20] Thus, the Court finds the allegations sufficient for purposes of this motion.

         Defendants' next argument extends from the first: that the absence of specific allegations against McKesson in Plaintiffs' Complaint demonstrates a lack of good faith intent to pursue their claims against McKesson, and that the Court should find fraudulent joinder on that basis. However, as with Avandia, the Court finds that the facts pleaded are not implausible-it is possible that McKesson distributed Zoloft which ended up being consumed by Plaintiffs. Further, Plaintiffs' Complaint is not fatally inconsistent as it alleges a vague but plausible causal chain of events that could expose McKesson to liability. The general allegations do not, by themselves, indicate a lack of good faith on the part of Plaintiffs' to pursue claims against McKesson.[21]

         However, the Court finds merit in Defendants' contention that the generalized allegations and the history of the Zoloft litigation together demonstrate that Plaintiffs have no intention to pursue their claims against McKesson. Defendants assert that Zoloft plaintiffs, including others represented by Plaintiffs' counsel here, have regularly failed to propound discovery on McKesson and often have voluntarily dismissed McKesson as a named defendant. The Court considered a similar situation in the Avandia MDL, where the Court examined the history of the litigation and found that although the Avandia litigation had been ongoing for five years, and general discovery was completed in the state and federal matters, the plaintiffs' counsel had not sought discovery from McKesson and could offer no good explanation why it had not. The Court thus concluded that McKesson had been fraudulently joined by the California plaintiffs.[22]

         Here, the circumstances also evince no intent on the part of the plaintiffs to pursue claims against McKesson. As was the case in Avandia, the Court has been made aware of no instance in which any of the numerous Zoloft plaintiffs have propounded meaningful discovery on McKesson in either state or federal court, even though some cases have gone to trial. This failure to seek discovery includes other cases brought by Plaintiffs' counsel.[23] The ...


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