Paul Jenner, et al. v. CVS, Inc., et al.

2011 DNH 043

• Court: District Court, D. New Hampshire
• Decided: March 22, 2011
• Docket: 10-CV-497-JL
• Status: Published

Opinion

UNITED STATES DISTRICT COURT DISTRICT OF RHODE ISLAND

Paul Jenner, et a l .

v. Civil N o . 10-cv-497-JL Opinion N o . 2011 DNH 043 CVS Pharmacy, Inc., et a l .

MEMORANDUM ORDER

This products liability case, transferred here from the

District of Rhode Island, arises from injuries allegedly

sustained by plaintiff Paul Jenner after ingesting the

prescription drug metoclopramide. Jenner and his wife, both

Massachusetts citizens, brought suit in Rhode Island Superior

Court against various manufacturers of the drug, as well as two

pharmacies that allegedly dispensed it to him, seeking to hold

them liable under state tort law for failing to warn of the

drug’s side effects. Some of the manufacturers removed the case

to federal court, see 28 U.S.C. § 1441, arguing that the

plaintiffs fraudulently joined the pharmacies as defendants for

the purpose of destroying federal diversity jurisdiction, see id.

§ 1332(a), and preventing removal. One of the pharmacies, Stop &

Shop Supermarket, is allegedly a citizen of the plaintiffs’ home

state, Massachusetts. The other pharmacy, CVS, is a citizen of

Rhode Island, which would have prevented removal from that state’s courts even if the parties were completely diverse. See

id. § 1441(b).

Plaintiffs have now moved to remand the case to Rhode Island

Superior Court, see id. § 1447(c), arguing that the pharmacies

were properly joined as defendants and that this court therefore

lacks diversity jurisdiction. For the reasons explained below,

the motion is granted (except as to the plaintiffs’ request for

attorneys’ fees). While it is difficult to hold a pharmacy

liable for failing to warn of a drug’s side effects, the removing

defendants have not met their “heavy burden” of showing that

“there is no possibility that the plaintiff[s] would be able to

establish” their claims against the pharmacies, as would be

required for this court to deem their joinder fraudulent. 16

James Wm. Moore, Moore’s Federal Practice § 107.14[2][c][iv][B],

at 107-63 to 107-67 (3d ed. 2010) (citing cases). Nor have the

defendants--who, as the parties invoking this court’s

jurisdiction, bear the burden of establishing it--persuaded this

court of their alternative argument that Stop & Shop is not

actually a Massachusetts citizen. Because the plaintiffs

properly joined an allegedly non-diverse defendant and assert

only state-law claims, this court lacks subject-matter

jurisdiction, and the case must be remanded.

2 I. Applicable legal standard

Where, as here, plaintiffs move to remand a case that has

been removed to federal court on a theory of fraudulent joinder

of non-diverse defendants, the case must be remanded unless the

removing defendants meet their “heavy burden” to “show either

that (1) there is no possibility that the plaintiff would be able

to establish a cause of action against the [non-diverse]

defendant in state court” or “(2) there has been outright fraud

in the plaintiff’s pleading of jurisdictional facts.” Id.

(citing cases). 1 In determining whether that showing has been

made, courts generally look to the complaint and removal notice,

along with any supporting materials submitted by the parties.

Id. at 107-67. As with a motion to dismiss, the “court must

evaluate all of the factual allegations . . . in the light most

favorable to the plaintiff[s].” Id. Unlike the consideration of

a motion to dismiss, however, the court also must resolve all

state-law ambiguities in the plaintiffs’ favor. Id. at 107-65,

107-70. The court must not “weigh the merits of the

1 While our court of appeals has not directly addressed the standard for analyzing fraudulent joinder, dicta in one of its decisions suggests that it agrees with the standard set forth above. See Polyplastics, Inc. v . Transconex, Inc., 713 F.2d 875, 877 (1st Cir. 1983) (“a finding of fraudulent joinder bears an implicit finding that the plaintiff has failed to state a cause of action against the fraudulently joined defendant”) (citing Moore’s).

3 [plaintiffs’] claim beyond determining whether the claim is

arguable under state law.” Id. at 107-66.

II. Analysis

A. Fraudulent joinder

The removing defendants have not accused the plaintiffs of

“outright fraud” in pleading jurisdictional facts. Rather, they

argue that the joinder of the two pharmacy defendants should be

deemed fraudulent because there is no possibility that the

plaintiffs would be able to hold the pharmacies liable for

failing to warn of metoclopramide’s side effects. Both sides

agree that, because the pharmacies allegedly dispensed the drug

in Massachusetts, the viability of the plaintiffs’ failure-to-

warn claims must be evaluated under Massachusetts law,

specifically Cottam v . CVS Pharmacy, 764 N.E.2d 814 (Mass. 2002).

Finding no fault with that position, this court will apply

Massachusetts law. See, e.g., Hodgkins v . New Eng. Tel. Co., 82

F.3d 1226, 1230 (1st Cir. 1996). As explained below, under the

framework set forth in Cottam, the plaintiffs’ failure-to-warn

claims against the pharmacies are at least arguable. Thus, the

removing defendants have not met their burden of showing

fraudulent joinder.

4 The Massachusetts Supreme Judicial Court ruled in Cottam

“that, generally, a pharmacy has no duty to warn its customers of

the side effects of prescription drugs,” but that a pharmacy “may

voluntarily assume a duty to provide information, advice, or

warnings.” 764 N.E.2d at 819-21. Whether a pharmacy has assumed

such a duty “is a fact-specific inquiry based on the totality of

the pharmacy’s communications with the patient and the patient’s

reasonable understanding, based on those communications, of what

the pharmacy has undertaken to provide.” Id. at 823. For

example, “merely affix[ing] a label warning” from the

manufacturer is not enough to assume a duty, but “a more detailed

list of warnings” could be enough if “the patient could

reasonably interpret [it] as a complete and comprehensive list of

all known side effects.” Id. at 822-23. The court concluded

that the pharmacy in Cottam assumed a duty to warn by giving the

patient its own warning form, which listed some but not all of

the drug’s side effects, and then by discussing the drug and at

least one side effect with the patient. Id. at 8 1 8 , 823.

The removing defendants argue that the plaintiffs’ complaint

fails to state a claim under Cottam because it does not allege

that the pharmacies did anything more than provide the

manufacturer’s warning (or “package insert”) for metoclopramide.

But the complaint expressly alleges that not only the “package

5 inserts,” but also “patient drug information forms, counseling,

warnings, or literature, provided to the pharmacy defendants’

customers, including plaintiff, by pharmacy defendants, were

inaccurate and failed to fully apprise patients, like plaintiff,

of the known or knowable risks associated with the use of” the

drug. Document n o . 1-1 at ¶ 124; see also id. at ¶ 35 (alleging

that the pharmacy defendants “provid[ed] patient counseling and

education monographs . . . to the Plaintiffs and consumers”).

Under Cottam, the pharmacies’ alleged provision of additional

documents and counseling arguably could give rise to a duty to

warn, and the alleged inadequacy in their warnings could give

rise to liability.

It is true that, as the removing defendants note, the

complaint also alleges that the “drugs that the pharmacy

defendants provided to plaintiff . . . were dispensed unchanged

from the original retail package of the manufacturer,” document

n o . 1-1, at ¶ 223, and that the pharmacy defendants “attach[ed]

labels to the bottle/vial before giving the same to the

patient/customer, without proper patient package inserts,

warnings, counseling, and information,” id. at ¶ 222. But those

allegations are not necessarily inconsistent with the ones set

forth above. Even if the pharmacies did not make changes to the

manufacturer’s package or provide “proper” warnings of their own,

6 they could nevertheless have provided improper warnings in

addition to the manufacturer’s package. Indeed, the plaintiffs

have confirmed in their briefing to this court that their

allegation is that the pharmacies provided additional, inadequate

warnings. See documents n o . 13-1 and 2 5 , each at 2 . In any

event, this court must construe the complaint in the light most

favorable to remand. See Part I , supra.

This is not to say that the plaintiffs’ failure-to-warn

claims against the pharmacies have a likelihood of succeeding on

the merits in state court. According to one treatise,

“plaintiffs have almost always been unsuccessful” in bringing

claims of this sort. 5 Louis R. Frumer & Melvin I . Friedman,

Products Liability § 50.03[1], at 50-20 (2010). Massachusetts,

however, is one of a handful of jurisdictions that have opened

the door to such claims, at least under certain circumstances.

Id. § 50.03[3][c], at 50-32 (listing Cottam as one of the notable

“exceptions” to the general rule that pharmacies cannot be held

liable for failure-to-warn, and suggesting that it may mark the

beginning of a broader trend in that direction). Construing both

the complaint’s allegations and Massachusetts law in the light

most favorable to the plaintiffs, then, it is at least arguable

that the plaintiffs could prevail against the pharmacy

7 defendants. That conclusion necessarily marks the end of the

court’s analysis of this issue. See Part I , supra.

B. Stop & Shop’s citizenship

In addition to fraudulent joinder, the removing defendants

argue in a footnote that Stop & Shop, the only defendant alleged

to be a citizen of the plaintiffs’ home state (Massachusetts), is

not really a citizen of that state. But the plaintiffs have

submitted a registration form, filed with the Rhode Island

Secretary of State, which indicates that Ahold U.S.A., Inc., the

alleged sole member of Stop & Shop (a limited liability company),

is incorporated in Maryland and has its “principal office” at

Stop & Shop’s headquarters in Quincy, Massachusetts. See

document n o . 13-5. 2 Ahold U.S.A.’s citizenship would make Stop &

Shop a citizen of both Maryland and Massachusetts for purposes of

diversity jurisdiction. See, e.g., 28 U.S.C. § 1332(c)(1) (“a

corporation shall be deemed to be a citizen of any State by which

it has been incorporated and of the State where it has its

2 The form also gives the same Quincy, Massachusetts address for each of Ahold U.S.A.’s officers and directors. See Hertz Corp. v . Friend, 130 S . C t . 1181, 1192 (2010) (explaining that a corporation’s principal place of business, for jurisdictional purposes, is its “nerve center,” meaning “the place where a corporation’s officers direct, control, and coordinate the corporation’s activities”).

8 principal place of business”); Pramco, LLC ex rel. CFSC

Consortium, LLC v . San Juan Bay Marina, Inc., 435 F.3d 5 1 , 54

(1st Cir. 2006) (“the citizenship of a limited liability company

is determined by the citizenship of all of its members”).

The removing defendants allege, in response, that Maryland

tax authorities have listed Ahold’s “principal office” as being

in Maryland. But the defendants neglected to submit that

competing form as an exhibit (their brief says “See Exhibit _ _ ” ) .

And even if they had submitted i t , “the mere filing of a form

. . . listing a corporation’s ‘principal executive offices’” is

not, “without more, . . . sufficient proof” for “the party

asserting” federal jurisdiction to establish that corporation’s

principal place of business. Hertz, 130 S . C t . at 1194-95.

Again, the defendants are the ones asserting diversity

jurisdiction here, and hence the ones with the burden to show

that Stop & Shop is not a Massachusetts citizen, as alleged. See

16 Moore’s, supra, § 107.11[3], at 107-44. They have not done

anything to meet that burden. Cf., e.g., Hertz, 130 S . C t . at

1186 (noting that the defendant there submitted a detailed, and

unchallenged, declaration refuting the plaintiffs’ allegation

regarding its principal place of business). Indeed, the

plaintiffs have made a stronger showing to the contrary.

9 Because the plaintiffs properly joined Stop & Shop, an

allegedly non-diverse defendant, and asserted only state-law

claims, this court lacks subject-matter jurisdiction, and the

case must be remanded. In light of that conclusion, this court

need not address the plaintiffs’ argument that the case should

also be remanded because the other pharmacy defendant, CVS, is a

citizen of the state where they brought the action, see 28 U.S.C.

§ 1441(b), or the defendant’s counter-argument that the

plaintiffs waived that issue by waiting more than 30 days after

removal before moving to remand. See id. § 1447(c) (requiring

plaintiffs to raise non-jurisdictional challenges to removal

within 30 days); Farm Constr. Serv., Inc. v . Fudge, 831 F.2d 1 8 ,

21-22 (1st Cir. 1987) (indicating that removal of a case brought

in one of the defendants’ home states is a procedural defect, not

a jurisdictional o n e ) .

C. Attorneys’ fees

Finally, the plaintiffs request that, in addition to

remanding the case, this court award them attorneys’ fees and

costs incurred in connection with the unsuccessful removal. See

28 U.S.C. § 1447(c) (“An order remanding the case may require

payment of just costs and any actual expenses, including attorney

fees, incurred as a result of the removal.”). “Absent unusual

10 circumstances,” however, “courts may award attorney’s fees under

§ 1447(c) only where the removing party lacked an objectively

reasonable basis for seeking removal.” Martin v . Franklin

Capital Corp., 546 U.S. 1 3 2 , 141 (2005). That is not the

situation here. While their arguments did not carry the day, the

removing defendants had a reasonable, good-faith basis for at

least attempting removal, especially given the lack of clarity in

the plaintiffs’ complaint. Moreover, the plaintiffs’ delay in

moving to remand also weighs against a fees award, see id.

(noting that as a permissible consideration), since it required

the defendants to conduct additional research and briefing on the

waiver issue, see Part III.B, supra.

IV. Conclusion

For the reasons set forth above, the plaintiffs’ motion to

remand3 is GRANTED, except as to their request for an award of

attorneys’ fees and costs, which is DENIED. The clerk shall

remand the case to Rhode Island Superior Court and close the case

here.

3 Document n o . 1 3 .

11 SO ORDERED.

Joseph N . Laplante United States District Judge

Dated: March 2 2 , 2011

cc: Donald A . Migliori, Esq. Leah J. Donaldson, Esq. Vincent L . Greene, IV, Esq. Joseph R. Weisberger, Jr., Esq. Jonathan R. Shank, Esq. Michaela A . Fanning, Esq. Brooks R. Magratten, Esq. Michael J. Daly, Esq. Andrew J. Calica, Esq. Henninger S . Bullock, Esq. John B . Daukas, Esq.