Opinion
Civil Action No. 01-2127 Section "C" (4)
August 28, 2001
Before the Court are Defendants' Motion to Stay Proceedings Pending Action by the Judicial Panel on Multidistrict Litigation, and Plaintiffs Motion to Remand. Having reviewed both motions, the record, the arguments of counsel and the applicable law, IT IS ORDERED that the Motion to Remand is DENIED. IT IS FURTHER ORDERED that Defendants' Motion to Stay Proceedings is hereby GRANTED.
Background
Plaintiff commenced this action on or about June 7, 2001 by filing a Class Action Petition in the Civil District Court for the Parish of Orleans, State of Louisiana, alleging state antitrust and deceptive trade practice claims pursuant to Louisiana Revised Statutes 51:1405, 51:137 and 51:123 against Defendants Schering-Plough Corporation, Upsher-Smith Laboratories, Inc., and American Home Products Corporation (collectively "Defendants"). The Petition is brought on behalf of Plaintiff and all other similarly situated Louisiana indirect purchasers of the prescription drug, which are estimated to be in the thousands.
See Petition at ¶ 15 ("There are, at a minimum, thousands of indirect purchasers located throughout Louisiana that have purchased K-Dur during the Class Period.").
Pursuant to 28 U.S.C. § 1441, Defendants removed the case to federal court on July 11, 2001, invoking diversity and federal question jurisdiction. Defendants argue that jurisdiction is appropriate because all of the parties are diverse, and the damages plus the attorneys fees at issue in this case brings the amount in controversy over $75,000. Alternatively, Defendants maintain that this Court has federal question jurisdiction because resolution of Plaintiffs state law claims will "require resolution of substantial issues of federal law and involve collateral attacks on the settlement and dismissal of federal patent litigation." Defendants also suggest that federal question jurisdiction exists because they believe that any claim that Plaintiff attempts to bring under Louisiana state law must actually be brought under the federal Sherman Act. Even assuming arguendo that Plaintiffs claims are pure state law claims and require neither resolution of federal law issue nor disruption of federal patent litigation, the Court finds that Defendant has demonstrated that diversity jurisdiction exists in this case.
See Joint Notice of Removal at ¶¶ 6-14.
See id. at ¶¶ 15-26.
See id. at ¶¶ 27-34.
Analysis
The parties may neither consent to nor waive federal subject matter jurisdiction. See Simon v. Wal-Mart Stores. Inc., 193 F.3d 848 (5th Cir. 1999). Where jurisdiction is premised on diversity of citizenship, the parties must be diverse and the amount in controversy must exceed $75,000. See 28 U.S.C. § 1332 (a). The removing defendant must prove by a preponderance of the evidence that the jurisdictional minimum exists. See Simon, 193 F.3d at 850. This showing may be made by either: (1) demonstrating that it is apparent on the face of the complaint that the claims are likely to exceed $75,000; or (2) setting forth the facts in controversy that support a finding of the jurisdictional minimum. See id.
Once a defendant has satisfied his burden, a plaintiff may only defeat jurisdiction by showing to a "legal certainty" that the amount in controversy will not satisfy the jurisdictional requirements. See St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 289 (1938); De Aguilar v. Boeing Company, 47 F.3d 1404, 1412 (5th Cir. 1995). Parties seeking to prevent removal may meet this legal certainty standard by offering a binding stipulation to prove to a legal certainty that recovery will not exceed the jurisdictional minimum, but that stipulation must be filed in the state court before removal occurs. See id. at 1412;see also 14C Wright, Miller, Cooper, Fed. Prac. Proc.: Jurisdiction 3d § 3726 (1998).
In her state court petition, Plaintiff stipulated that her damages are less than $75,000, and "expressly disclaim[ed] any individual recovery in excess of $75,000" for the other members of the putative class. Plaintiff correctly points out, and Defendant does not dispute, that damages may generally not be aggregated for the purposes of satisfying the amount in controversy requirement for diversity jurisdiction. See Ard v. Transcontinental Gas Pipe Line Corp., 138 F.3d 596, 600 (5th Cir. 1998) (citing Synder v. Harris, 394 U.S. 332, 335 (1969)). At least one individual plaintiff must have damages of at least $75,000 in order to justify removal to federal court. See id.
See Petition at ¶ 7. Some courts have expressed concern about limiting the recovery of putative class members who are not yet identified for the purposes of avoiding federal jurisdiction. See. e.g.,Pendleton v. Parke-Davis, 2001 WL 96408 at *5-6 (E.D. La. 2001) (Porteous, J.).
Defendant, however, relies on In re Abbott Laboratories, 51 F.3d 524 (5th Cir. 1995), aff'd. 529 U.S. 333 (2000), for the proposition that, in some circumstances, the Court may attribute the attorney's fees awarded in a class action to one plaintiff, and thereby bring one party over the $75,000 threshold amount and the case within the jurisdiction of the federal courts. In Abbott, the Fifth Circuit examined Article 595 of the Louisiana Code of Civil Procedure, which states that "[t]he court may allow the representative parties their reasonable expenses of litigation, including attorney's fees, when as a result of the class action a fund is made available or a recovery or compromise is had which is beneficial, to the class." La. Civil Code art. 595.
The district courts in this circuit are split as to whether Article 595 alone is sufficient to permit aggregation. See Braxton v. IMC Phosphates MP. Inc., 2000 WL 1576827 at *2 (E.D. La. 2000) (Clement, J.) (describing the split of opinion among Louisiana federal judges). Some courts believe that Article 595 is sufficient in all cases, see e.g., McKnight v. Illinois Cent. R.R., 967 F. Supp. 182 (E.D. La. 1997) (Duval, J.);Kimball v. Modern Woodmen of Am., 939 F. Supp. 479 (M.D. La. 1996) (Parker, J.); Brooks v. Georgia Gulf Corp., 924 F. Supp. 739 (M.D. La. 1996) (Polozola, J.), while others insist that there must be some other statutory "hook" to support the attribution of attorney's fees to a single plaintiff. See. e.g., Ryder v. Gilbert S. Corp., 2000 WL 1499274 "(E.D. La. Sept. 21, 2000) (Sear, J.); Johnson v. Cytec Indus., Inc., 1999 WL 212753 (E.D. La. Apr. 13, 1999) (Vance, J.); Greer v. Mobil Oil Corp., 1997 WL 180477 (E.D. La. Apr. 14, 1997) (Clement, J.); Ace Pest Control Co. v. K-Mart Corp., 979 F. Supp. 443 (E.D. La. 1997) (Porteous, J.); Cooper v. Koch Pipeline, 1995 WL 931091 (E.D. La. Dec. 11, 1995) (Fallon, J.). However, in this case, as in Abbott, Plaintiff has brought a claim under Louisiana Revised Statute 51:137, which specifically provides for the award of attorney's fees to a plaintiff. See La. R.S. 51:137 ("Any person who is injured in his business or property by any person by reason of any act of thing forbidden by this Part may sue in any court of competent jurisdiction and shall recover threefold the damages sustained by him, the cost of suit, and a reasonable attorney's fee.") (emphasis added).
The Court finds that the Defendant has satisfied its burden of proving by a preponderance of the evidence that the attorney's fees in this action will be sufficient to bring the named plaintiff over the jurisdictional amount. The Complaint clearly states that the putative class may be comprised of, "at a minimum, thousands of indirect purchasers" of K-Dur. Based on this information, as well as the Court's assessment of the complexity of the allegations made against the numerous Defendants in the Petition, the Court finds that Defendants have met their burden of demonstrating that the attorneys fees for this class action would bring the damages of the named Plaintiff, to whom the attorneys fees would be attributed, over S75,000. Furthermore, the Court also notes that Plaintiff has made no binding stipulation that would cap its potential award of attorneys fees.
The Court rejects Plaintiffs argument that Abbott is inapplicable to this case because Plaintiff did not specifically cite Louisiana Civil Code article 595. Plaintiff brought this class action in state court pursuant to article 591 of the Louisiana Civil Code, and prayed on behalf of the class for "damages, treble damages, and attorneys fees as permitted by Louisiana law," see Petition at ¶ 68, which includes the damages provision of the class action statute. See La. Civil Code art. 595.
In Butler v. Carolina Nat'l Trans. Co., 2001 US Dist. LEXIS 1445 (E.D. La. 2001), which is relied upon by Plaintiff, Judge Vance had no evidence before her regarding the potential size of the class or any indication on how to quantify the recovery of the parties so as to "perform even a rudimentary calculation of attorneys fees." However,Butler involved the claims of individuals allegedly harmed as a result of exposure to chemicals after an accident caused the transporting truck to overturn. The Court finds Butler inapposite, as it presented an entirely different factual scenario from this case, which involves a very large number of consumers of K-Dur during a period of approximately four years. See Petition at ¶ 8 (identifying the class period as June 17, 1997 to the present).
The Fifth Circuit has made clear that once a Defendant shows by a preponderance of the evidence that the jurisdictional minimum has been met, unless Plaintiff can demonstrate "to a legal certainty" that the $75,000 amount in controversy will not be satisfied in this case, Defendants are entitled to remove the case to federal court. The Court finds that Plaintiff has not met this difficult standard. Therefore, IT IS ORDERED that Plaintiffs Motion to Remand is hereby DENTED. Conclusion
In light of the fact that motions to remand have been filed in the other related cases pending before the MDL panel, see Defendant's Reply Memorandum in Support of Motion to Stay at n. 2 (listing cases), the Court shall not express any view on whether Defendant's other arguments for removal have merit.
Having satisfied itself that jurisdiction is proper in this matter, IT IS ORDERED that all further proceedings in this case are hereby STAYED pending action by the Judicial Panel on Multidistrict Litigation regarding the motion to transfer, and that the Clerk of Court mark this action closed for statistical purposes. IT IS FURTHER ORDERED that the Court shall retain jurisdiction and that the case shall be restored to the trial docket upon motion of a party if circumstances change, so that it may proceed to final disposition; this order shall not prejudice the rights of the parties to this litigation.
Apparently, the MDL panel has not yet classified this matter as a related case. See Defendant's Supplemental Memorandum Appendix 1.