Sallee v. Medtronic Incorporated

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 David Sallee, No. CV-22-00270-TUC-JCH (DTF)

10 Plaintiff, ORDER

11 v.

12 Medtronic Incorporated, et al.,

13 Defendants. 14 15 Before the Court is Plaintiff's Motion to Remand to State Court ("Motion I") (Doc. 16 13), and Defendants' Motion to Dismiss for Failure to State a Claim ("Motion II") (Doc. 17 14) and Motion for Summary Disposition of Motion II ("Motion III") (Doc. 19). For the 18 reasons below, the Court grants Motion I. The Court therefore cannot, and does not, reach 19 Motions II and III. 20 I. Background 21 The issue here involves the action's procedural history.1 In 2021, Plaintiff filed case 22 number C20211049 ("Case 1") in Arizona state court against the Arizona Board of Regents 23 and the State of Arizona. On March 10, 2022, Plaintiff filed case number C20220934 24 ("Case 2") in state court against Defendants. The next day, Plaintiff filed case number 25 C20220957 ("Case 3") in state court against Dr. Bull and Geena Wu, M.D. Cases 1 and 3 26 are between Arizona citizens. Case 2 is between an Arizona citizen and citizens of other

27 1 The Court draws this history from the Magistrate’s Report and Recommendation 28 (“R&R”) unless otherwise noted because Defendants did not object to the R&R’s statement of facts. (See Doc. 24; Doc. 23 at 1:25–2:23.) 1 states.2 In April, Plaintiff moved for the state court to consolidate the three cases. In May, 2 the state court ordered the three actions "consolidated into case number C20211049 [Case 3 1] for all further proceedings." The state court further ordered "all pleadings from [Case 2] 4 and [Case 3] be transferred to [Case 1]." 5 On June 9, Defendants filed a Notice of Removal from state court under case 6 number C20220934 (Case 2). (Doc. 1 (the "Notice").) The Notice asserts Case 2 remains 7 distinct for removal purposes despite the state court's consolidation of Cases 1–3. (Id. at 7– 8 8.) On June 23, the case was referred to Magistrate Judge Leslie A. Bowman for all pretrial 9 proceedings and a report and recommendation ("R&R"). (Doc. 12.) On June 28, Plaintiff 10 timely sought remand to state court through Motion I. (Doc. 13.) Motion I asserts Case 2 11 cannot be removed separately from Cases 1 and 3 because the state court consolidated all 12 three. (Id. at 5–6.) In July, the case was reassigned to Magistrate Judge D. Thomas Ferraro. 13 (Doc. 18.) In September, Judge Ferraro issued his R&R recommending that the Court 14 should grant Motion I. (Doc. 23.) The R&R reasoned that remand is required under Arizona 15 law. (Id. at 4.) Defendants filed an Objection to the R&R analysis and conclusion, (Doc. 16 24), and Plaintiff filed a Reply. (Doc. 25.) 17 II. Standard of Review 18 The Court reviews de novo any portion of a Magistrate Judge's R&R to which 19 objection is made. 28 U.S.C. § 636(b)(1); see also Fed. R. Civ. P. 72(b); United States v. 20 Remsing, 874 F.2d 614, 617 (9th Cir. 1989). 21 III. Analysis 22 Defendants object to the R&R's conclusion and analysis of Motion I. (See Doc. 24 23 at 2.) The Court must therefore, in essence, review Motion I de novo. The Court concludes 24 that remand is required because Defendants cannot carry their burden of establishing 25 federal jurisdiction. Arizona law does not settle the issue, and the Court declines to predict 26 2 Plaintiff is a citizen of Arizona. (Doc. 1 at 5.) Defendant Medtronic, Inc. is a citizen of 27 Minnesota. (Id. at 3.) Defendant Covidien Holding, Inc. is a citizen of Delaware and 28 Massachusetts. (Id.) Defendant Covidien Sales, LLC, is a citizen of Massachusetts, Colorado, and Minnesota. (Id. at 3–4.) 1 Arizona's approach because removal statutes are construed strictly against removal. 2 A. Remand is required given "any doubt" of federal jurisdiction. 3 A state-court defendant may remove the action to federal court if the federal court 4 has "original jurisdiction" over the action. 28 U.S.C. § 1441(a) (2003). Federal courts have 5 original jurisdiction over certain disputes between citizens of different states. 28 6 U.S.C. § 1332. Specifically, federal "diversity jurisdiction" requires (1) an amount in 7 controversy over $75,000, and (2) "complete diversity"—each plaintiff must be a citizen 8 of a different state from each defendant. 28 U.S.C. § 1332(a); Lincoln Prop. Co. v. Roche, 9 546 U.S. 81, 84 (2005). 10 The removing defendant has the burden to demonstrate federal jurisdiction. Abrego 11 Abrego v. Dow Chemical Co., 443 F3d 676, 685 (9th Cir. 2006). Put differently, the Court 12 presumes it lacks jurisdiction unless the removing defendant shows otherwise. See id. This 13 requirement is easily justified. A federal proceeding is void if it lacks jurisdiction. See U.S. 14 v. Berke, 170 F.3d 882, 883 (9th Cir. 1999); Fed. R. Civ. P. 12(h)(3), 60(b). Presuming 15 jurisdiction, then, would risk tremendous waste of resources. If jurisdiction later turned out 16 to be lacking, the parties and the Court would have wasted their time seeking a resolution 17 properly left to the state. That is why removal statutes are "strictly construed against 18 removal." Luther v. Country Home Loans Servicing LP, 533 F.3d 1031, 1034 (9th Cir. 19 2008) (citation omitted). Critically, "any doubt" is resolved against removability. Id.; Abels 20 v. State Farm Fire & Cas. Co., 770 F.2d 26, 29 (3d Cir. 1985). 21 Here, the Court has diversity jurisdiction over Case 2 only if it is distinct from Cases 22 1 and 3. All three cases involve an amount in controversy over $75,000. (See Doc. 1 at 9; 23 Doc 15 at 5 n. 6.) If Case 2 is distinct, the Court has diversity jurisdiction because Plaintiff 24 is from Arizona and Defendants Medtronic, Covidien Holding, and Covidien Sales are not. 25 (See Doc. 1 at 3–5.) But if Cases 1–3 are no longer distinct, the Court does not have 26 diversity jurisdiction because Plaintiff and Defendants Dr. Bull, Geena Wu, M.D., the 27 Arizona Board of Regents, and the State of Arizona are all from Arizona. (Doc. 23 at 2.) 28 The issue is whether Cases 1–3 remained distinct for removal purposes after the state court 1 consolidated them. Because federal courts examine state law to determine the effect of a 2 state-court consolidation order for removal, Bridewell-Sledge v. Blue Cross of Cal., 798 3 F.3d 923, 925 (9th Cir. 2015), the Court turns to Arizona's case-consolidation law. 4 B. Arizona has not decided the effect of a general consolidation of cases. 5 In actions involving a common question of law or fact, an Arizona court may "(1) 6 join for hearing or trial any or all matters at issue in the actions; (2) consolidate the actions; 7 or (3) issue any other orders to avoid unnecessary cost or delay." Ariz. R. Civ. P. 42(a). 8 Few Arizona cases interpret Rule 42(a), and the two most relevant cases do not apply under 9 the facts of this case. In Yavapai County v. Superior Court, the court held that Rule 42(a) 10 "consolidation of cases 'for trial' . . . does not merge the suits into a single cause, or change 11 the rights of the parties." 13 Ariz. App. 368, 370 (1970). Yavapai in turn cited Torosian v. 12 Paulos, which held that Rule 42(a) "consolidation of actions for limited purposes or for the 13 trial of certain issues only . . . does not thereby effect a merger of the cases consolidated." 14 82 Ariz. 304, 315 (1957). 15 But these cases concern only a limited-purpose consolidation of cases "for trial." 16 That is different from the current case, where the consolidation order contained no limiting 17 language. The state court consolidated Cases 2 and 3 "into [Case 1] . . . for all further 18 proceedings," not merely for trial, and further ordered "all pleadings from [Case 2] and 19 [Case 3] be transferred to [Case 1]." (Doc. 1-3 at 58–59.) The distinction between a limited 20 consolidation and a more general consolidation is significant. Although Yavapai and 21 Torosian did not refer to Rule 42(a)'s sub-sections, a limited consolidation presumably 22 takes place under Rule 42(a)(1), which permits an Arizona court to join cases "for hearing 23 or trial." A more general consolidation presumably takes place under Rule 42(a)(2), which 24 permits an Arizona court to "consolidate the actions" differently from Rule 42(a)(1). 25 Defendants identify—and the Court can find—no Arizona cases for the proposition that a 26 general consolidation under Rule 42(a)(2) has the same effect as a limited consolidation 27 28 1 for trial under 42(a)(1).3 2 In fact, Defendants cite no Arizona cases at all in support of their Notice or their 3 Response to Motion I—only federal cases. (See Doc. 1; Doc 15.) Most of Defendants' cases 4 interpret Federal Rule 42(a). (See Doc. 1 at 7–8 (citing Johnson v. Manhattan Ry. Co., 289 5 U.S. 479 (1933) (interpreting the processor to Rule 42(a)); In re iBasis, Inc. Derivative 6 Litig., 551 F. Supp. 2d 122, 125 (D. Mass 2008)); Doc. 15 at 4 n. 4 (citing Cella v. Togum 7 Constructeur Ensembleier en Industrie Alimentaire, 173 F.3d 909, 912 (3d Cir. 1999); In 8 re Joint E. & S. Districts Asbestos Litig., 124 F.R.D. 538, 541 (E.D.N.Y. 1989).) These 9 cases do not support Defendants' position because this case does not involve consolidation 10 under Federal Rule 42(a). Defendants also cite two unpublished Arizona district court 11 orders and one New Mexico district court order in a similar posture to this case. (See Doc. 12 1 at 7 (citing Monroe v. Gagan, 2008 WL 4418155, *3 (D. Ariz. Sept. 29, 2008); Fressadi 13 v. Glover, 2019 WL 2549609, *7 (D. Ariz. June 20, 2019), vacated in part on other 14 grounds, 2020 WL 805237 (D. Ariz. Feb. 18, 2020)); Doc. 15 at 3 (citing Chaara v. Intel 15 Corp., 410 F. Supp. 2d 1080, 1094 (D.N.M. 2005), aff'd without pub'd opinion, 245 Fed. 16 Appx. 784 (10th Cir. 2007)). Defendants urge the Court to consider them for their 17 persuasive value. (See Doc. 15 at 4 n. 3.) 18 In 2005, the New Mexico district court considered the effect of consolidation under 19 New Mexico Rules of Civil Procedure. Chaara, 410 F. Supp. 2d at 1090. The district court 20 noted that the New Mexico rule was identical to Federal Rule 42(a), and that "New Mexico 21 courts have recognized that, when a New Mexico Rule of Civil Procedure is substantially 22 23 3 Tangentially related cases point in different directions. In one, an Arizona court considering Arizona Civ. P. Rule 54 expressed its “alignment” with a Fifth Circuit view 24 that “we see no reason why a proper consolidation may not cause otherwise separate actions to thenceforth be treated as a single judicial unit . . . when the consolidation is 25 clearly unlimited[.]” Powers Reinforcing Fabricators, L.L.C. v. Contes, 249 Ariz. 585 ¶ 18 26 (2020) (quoting Ringwald v. Harris, 675 F.2d 768, 771 (5th Cir. 1982)). In another case, an Arizona court considering a family law rule “based on [Arizona] Rule 42(a)” ignored 27 the distinction between general and limited consolidation, and referred to federal language 28 about limited consolidation as though it applied in all cases. See Brummond v. Lucio, 243 Ariz. 360 ¶ 20 (App. 2017). 1 similar to a Federal Rule of Civil Procedure, federal cases interpreting the Federal rules are 2 persuasive in interpreting the New Mexico Rule at issue." Id. at 1090–91. The district court 3 concluded that because "a majority of the Circuits" agree that consolidation does not 4 destroy the separate character of the underlying cases under the federal rule, New Mexico 5 courts likely would take the same approach under the similar New Mexico rule. Id. at 1094. 6 In 2008, the Arizona district court cited Chaara and proceeded similarly when 7 considering the effect of consolidation under Arizona Rule 42(a). Monroe, 2008 WL 8 4418155, at *2. But unlike in Chaara, in Monroe the court did not explain its citation to 9 federal law. See id. Instead, the Monroe court implied without explanation that the federal 10 interpretation was persuasive and provided a good basis for predicting Arizona's own 11 interpretation of its rules. See id. The court quoted Chaara for the colorful proposition that 12 "[c]onsolidation is not like a marriage, producing one indissoluble union from two distinct 13 cases." Id. Rather, "consolidation is an artificial link formed by a court for the 14 administrative convenience of the parties; it fails to erase the fact that, underneath 15 consolidation's façade, lie two individual cases." Id. 16 In 2019, the Arizona district court again considered the effect of consolidation under 17 Arizona Rule 42(a). Fressadi, 2019 WL 2549609 at *6. The Fressadi court conducted a 18 thorough, step-by-step analysis. Id. First, the court observed that Arizona law has not 19 established the effect of a general consolidation under Rule 42(a). Id. at *7 (citing Torisian 20 and Yavapai). Second, the court determined that "in the absence of a 'clear state court 21 exposition of a controlling principle, district courts must use their 'best judgment' in 22 predicting how a state's highest court would decide the issue." Id. (citing Takahashi v. 23 Loomis Armored Car Serv., 625 F.2d 314, 316 (9th Cir. 1980)). Third, the court considered 24 that Arizona courts "give great weight to the federal interpretations of the [Federal Rules 25 of Civil Procedure]" because Arizona's rules of civil procedure are "substantially adopted" 26 from them. Id. (citing Edwards v. Young, 486 P.2d 181, 182 (Ariz. 1971)). Fourth, the court 27 observed that federal law is "fairly uniform in holding that orders consolidating actions 28 under Federal Rule 42(a), whether limited or general, do not merge two actions into one." 1 Id. (citing, among others, Chaara and Monroe). Finally, the court concluded that "Arizona 2 would likely follow federal law as to the effect of a general consolidation order like the 3 one here at issue." Id. at 9. The court also found that the factual history of the case supported 4 the court's conclusion because the first case was litigated for a year before the second was 5 filed, and the cases sought different claims against different entities and individuals. Id. 6 Defendants ask the Court to follow Fressadi and Monroe to conclude that Case 2 is 7 removable separate from Cases 1 and 3. 8 C. Absent settled Arizona law, Defendants cannot carry their burden. 9 Defendants do not carry their burden to demonstrate federal jurisdiction because 10 only settled Arizona law could assist them. Defendants' argument for jurisdiction does not 11 demonstrate—it speculates. But speculation about jurisdiction, by definition, cannot 12 remove "any doubt." The Court therefore must remand. In reaching this result, the Court 13 departs from Fressadi in two ways. First, the Court understands its mandate to use its "best 14 judgment" in the absence of controlling state law differently in the removal context. In 15 Takahashi, for example, the Ninth Circuit instructed that a district court "sitting in diversity 16 must use its own best judgment in predicting how the state's highest court would decide 17 the case." 625 F.2d at 316 (emphasis added). A court considering a motion to remand is 18 not yet sitting in diversity; it is considering whether it can sit in diversity. Moreover, 19 the Ninth Circuit instruction to use "best judgment" implicitly applies only where 20 applying state law is required to decide the case. In a removal context, the case is 21 decided by the removing party's failure to demonstrate jurisdiction. 22 Second, even if the Court attempted to predict Arizona law's development, the Court 23 is not convinced Arizona would adopt the federal approach. Arizona courts often look to 24 federal interpretations of similar law when developing Arizona's law. See Edwards, 486 25 P.2d at 182. The federal approach is also a reasonable one, as illuminated by a recent 26 Supreme Court decision on the topic. See Hall v. Hall, 138 S. Ct. 1118, 1123–1131 (2018). 27 But Arizona courts also often look to California law when developing Arizona's law. State 28 v. Vallejos, 89 Ariz. 76, 82 (1960) (following "reasonable" California interpretations of a 1 California statute "nearly identical" to an Arizona statute); see also, e.g., U.S. v. Hankes, 2 2013 WL 1878935, *4 (D. Ariz. May 3, 2013) (same); Crawford Prof'l Drugs, Inc. v. CVS 3 Caremark Corp., 748 F.3d 249, 260 (5th Cir. 2014) (same, interpreting Arizona law). 4 California's consolidation statute is nearly identical to the Arizona and the federal rule. 5 Compare CA CIV PRO § 1048, with Ariz. R. Civ. P. 42(a). Yet California courts have 6 consistently treated consolidated actions as "merged into a single proceeding with only one 7 verdict or set of findings and one judgment, and the actions treated as if only one complaint 8 had originally been filed." Bridgewell-Sledge, 798 F.3d at 929 (citing Hamilton v. Asbestos 9 Corp., 998 P.2d 402, 415 (Cal. 2000)). Reviewing this alternative to the federal approach 10 to consolidation, the Court cannot conclude that Arizona would not follow it. More 11 importantly, the diversity of reasonable approaches available to Arizona only reinforces 12 the Court's doubt of its jurisdiction over the present case. Defendants have not removed 13 that doubt because they cannot without settled Arizona law. 14 For these reasons, the Court resolves its doubt by strictly construing the removal 15 statutes against removability. 16 IV. Order 17 Accordingly, 18 IT IS ORDERED GRANTING Plaintiff's Motion to Remand to State Court 19 (Doc. 13). This case is remanded to Arizona Superior Court, Pima County, Case 20 Number C20211049. The Clerk of the Court is directed to close this case; 21 IT IS FURTHER ORDERED GRANTING IN PART AND DENYING IN 22 PART the Report and Recommendation (Doc. 23) for the reasons stated above; 23 /// 24 /// 25 /// 26 /// 27 /// 28 /// 1 IT IS FURTHER ORDERED DENYING AS MOOT Defendants' Motion to 2|| Dismiss for Failure to State a Claim (Doc. 14) and Motion for Summary Disposition of 3 || Motion to Dismiss for Failure to State a Claim (Doc. 19). 4 Dated this 23rd day of November, 2022. 5 6

onorable John C. Hinderaker 8 United States District Judge 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

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