Opinion
MDL Docket No. 1203, Civil Action No. 03-20765, 03-20622, 03-20766, 03-20613.
August 12, 2004
MEMORANDUM AND PRETRIAL ORDER NO.
Before the court are the motions of plaintiffs in the four above-captioned cases to remand to the Circuit Court for Escambia County, Florida on the ground that complete diversity of citizenship is lacking. See 28 U.S.C. § 1332. The motions to remand are before the undersigned as transferee judge in MDL 1203, the mass tort litigation involving Wyeth's diet drugs Pondimin and Redux.
All of the plaintiffs are citizens of Florida. They have sued a number of diverse defendants, including Wyeth, the manufacturer of Pondimin and Redux, as well as several phentermine manufacturers, and Interneuron Pharmaceuticals, Inc., now known as Indevus, a co-promoter of Redux. Plaintiffs have also brought claims against non-diverse defendants: Eckerd Corporation ("Eckerd"), a retail pharmacy chain that allegedly filled plaintiffs' diet drug prescriptions; and Wyeth's current and former sales representatives Arthur Vernon, Richard Coe, and Debra Berry. Plaintiffs assert claims for negligence, strict liability (defective design and failure to warn), fraudulent misrepresentation, fraudulent concealment, and civil conspiracy. No federal claim for relief is alleged.
Plaintiffs in these actions are all represented by the same counsel. Plaintiffs Wells, Kistler, and Gerwe have adopted and incorporated by reference, with certain substitutions, the remand motion of plaintiff Bankston. Wyeth has filed a consolidated response in opposition to the pending motions to remand Because these motions present nearly identical legal and factual issues, we will address them together.
Plaintiffs exercised their right of intermediate optout under the Nationwide Class Action Settlement Agreement ("Settlement Agreement") in Brown v. American Home Products Corporation, CIV.A. No. 99-20593 (E.D. Pa. Aug. 28, 2000) (Pretrial Order ("PTO") No. 1415), which encompassed the claims of persons who ingested Wyeth's diet drugs Pondimin and Redux. See e.g., Settlement Agreement at § IV(A), (B), and (D)(4). Under the Settlement Agreement, those who have exercised an intermediate or back-end opt-out may sue Wyeth for compensatory but not punitive damages in the tort system rather than obtain benefits from the AHP Settlement Trust. See Settlement Agreement § IV.D.3.c. In return for the prohibition against punitive damages, Wyeth has waived the statute of limitations.See Settlement Agreement § IV.D.3.c.
The complaints were originally filed in the Circuit Court of Escambia County, Florida on May 21, 2003, more than five years after Pondimin and Redux were withdrawn from the market in September, 1997. Wyeth timely removed the actions to the United States District Court for the Northern District of Florida. The cases were then transferred to this court as part of MDL 1203.
I.
Under the removal statute, "any civil action brought in a state court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or defendants, to the district court. . . ." 28 U.S.C. § 1441(a). Federal district courts have original jurisdiction over all civil actions between citizens of different states if the amount in controversy exceeds $75,000, exclusive of interest and costs.See 28 U.S.C. § 1332(a). Complete diversity is required. See Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996); Strawbridge v. Curtiss, 7 U.S. 267 (1806). If an action originally filed in a state court could have been brought in federal court pursuant to diversity jurisdiction, the defendants may remove it to federal court if they are not citizens of the state in which the action was originally filed. See 28 U.S.C. §§ 1441(a) and (b), and 1446. If a federal court subsequently determines that it does not have subject matter jurisdiction over a removed action or the proper removal procedures were not followed, it must remand the action to the state court. See 28 U.S.C. § 1447(c); Balazik v. County of Dauphin, 44 F.3d 209, 213.
Wyeth seeks to have the court ignore the citizenship of non-diverse defendants on the ground that they were fraudulently joined. Wyeth bears a heavy burden in this regard. See Boyer v. Snap-on Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990). In determining whether Wyeth has met its burden, the court must "resolve all contested issues of substantive fact in favor of the plaintiff." Id. We are also cognizant of the fact that the removal statute must be construed narrowly, and "all doubts should be resolved in favor of remand" Steel Valley Auth. v. Union Switch Signal Div., 809 F.2d 1006, 1010 (3d Cir. 1987) (citation omitted). The heavy burden placed upon Wyeth to establish fraudulent joinder does not mean we must accept blindly whatever plaintiffs may assert no matter how incredible or how contrary to the overwhelming weight of the evidence. The Supreme Court made it clear in Wilson v. Republic Iron Steele Co., 257 U.S. 92 (1921), that if a plaintiff contests a defendant's assertion that joinder of another defendant was a sham to defeat removal, the District Court must determine the facts from the evidence. Wilson, 257 U.S. at 98. We are not to decide automatically in favor of remand simply because some facts may be in dispute.
As an MDL court sitting within the Third Circuit, we must apply our Court of Appeals' fraudulent joinder standard. See In re Korean Airlines Disaster, 829 F.2d 1171, 1174 (D.C. Cir. 1987);In re Ikon Office Solutions, Inc., 86 F. Supp. 2d 481, 485 (E.D. Pa. 2000). This court must decide whether there is "a reasonable basis in fact or colorable ground supporting the claim against the joined defendant." Boyer, 913 F.2d at 111.
On matters of substantive law, "[i]f there is even a possibility that a state court would find that a plaintiff's 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." Boyer, 913 F.2d at 111 (citation omitted). We are mindful that our inquiry into Wyeth's claim of fraudulent joinder is less searching than that permissible when a party seeks to dismiss a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure. Batoff v. State Farm Ins. Co., 977 F.2d 848, 852 (3d Cir. 1992); see also, Gaul v. Neurocare Diagnostic, Inc., No. 02-CV-2135, 2003 WL 230800, at *2 (E.D. Pa. Jan. 3, 2003). Simply because a claim against a party may ultimately be dismissed for failure to state a claim does not necessarily mean that the party was fraudulently joined. The test is whether a claim is colorable, that is, not "wholly insubstantial and frivolous." Batoff, 977 F.2d at 852.
II.
We will first address whether Wyeth's in-state sales representatives were fraudulently joined solely for the purpose of destroying diversity of citizenship and preventing removal. Plaintiffs have brought claims in strict liability (defective design and failure to warn), negligence, fraudulent misrepresentation and fraudulent concealment, and civil conspiracy against these in-state sales representatives.
Wyeth asserts that plaintiffs Wells and Kistler have no colorable claims against the sales representatives because these plaintiffs ingested only Pondimin, and none of the sales representative defendants named in these actions promoted Pondimin. Plaintiffs maintain that the sales representatives were "in the business of marketing, promoting, selling and/or distributing the pharmaceutical drugs Redux and/or Pondimin in the State of Florida." Am. Compl. at ¶ 8. However, the sales representatives in this case offer evidence through their affidavits that they "never dispensed, supplied, designed, detailed, promoted, marketed, advertised, distributed, or sold Pondimin." In their efforts to refute the sales representatives sworn testimony, plaintiffs have produced voluminous exhibits that indicate Wyeth and its predecessors promoted Pondimin through its sales forces. See Pl.'s Mot. to Remand, Ex. C. However, the only evidence submitted by plaintiffs that appears to contradict the affidavit testimony of a sales representative named in these actions is a chart produced by Wyeth indicating that sales representative Richard Coe was purportedly responsible for the writing of 136 new Pondimin prescriptions by local doctors during the week ending July 12, 1996. See Pl.'s Mot. to Remand, Ex. C27. This evidence arguably refutes Mr. Coe's affidavit testimony that he "never dispensed, supplied, designed, detailed, promoted, marketed, advertised, distributed, or sold Pondimin."
With respect to the other named sales representative defendants, Arthur Vernon and Debra Berry, plaintiffs have offered no direct evidence to refute the affidavits of these sales representatives that they never promoted Pondimin. While plaintiffs' voluminous documentation of Wyeth's efforts to promote Pondimin may be probative of plaintiffs' claims against Wyeth, they contain nothing that arguably rebuts defendants Berry and Vernon's sworn testimony. See, e.g., Davis, et al. v. Wyeth, et al., CIV.A. No. 03-128 at 7 (M.D. Ga. June 10, 2004). As this court found in Memorandum and PTO No. 2886, in Rainey v. Wyeth, et al., CIV.A. No. 03-20128 (E.D. Pa. June 12, 2003), uncontroverted sales representatives' affidavits are sufficient to establish fraudulent joinder. Based on these affidavits, there is no possibility that plaintiffs Wells and Kistler can recover against defendant sales representatives Vernon and Berry. Thus, these two defendants are fraudulently joined as to plaintiffs Wells and Kistler.
Plaintiffs Bankston and Gerwe allegedly ingested Redux. It is undisputed that the sales representative defendants promoted this drug. Even assuming that sales representatives Coe, Berry and Vernon promoted Pondimin and/or Redux, we agree with Wyeth that its sales representatives do not assume individual liability merely by participating in their employer's purported failure to provide adequate information. Checkers Drive-In Rests., Inc. v. Tampa Checkmate Food Servs., Inc., 805 So. 2d 941, 944 (Fla.Dist.Ct.App. 2001) (citations omitted).
However, the sales representatives could be found individually liable for knowingly participating in fraudulent or tortious conduct. Id. Plaintiffs rely on Albertson v. Richardson-Merrell, Inc., 441 So. 2d 1146 (Fla.Dist.Ct.App. 1983), in which a Florida court reversed a dismissal of a misrepresentation claim against a pharmaceutical sales representative. In Albertson, the court, in deciding a motion to dismiss, was not required to look beyond the allegations in the complaint. In the fraudulent joinder context, however, we may consider the uncontroverted evidence presented through Wyeth's sales representatives' affidavits. Notably, in the diet drug cases where Florida federal courts have refused to find fraudulent joinder of the sales representatives, Wyeth had "presented nothing more . . . than an allegation that the nondiverse individual Defendants were fraudulently joined by Plaintiff." Little v. Wyeth-Ayerst Labs., Inc., No. 99-2244-CIV-T-17F, slip op. at 6 (M.D. Fla. Dec. 9, 1999). In these actions, on the other hand, Wyeth has offered sworn testimony that the three defendant sales representatives named in this action had no knowledge of any connection between the diet drugs and valvular heart disease while they were promoting the diet drugs. There is nothing in the record before us to contradict this testimony.
Plaintiffs have also brought claims against the sales representatives for strict liability (defective design and failure to warn). Wyeth contends that plaintiffs have no possibility of prevailing on these claims because Florida law applies strict liability to manufacturers of products and the sales representatives are not manufacturers. See e.g., West v. Caterpillar Tractor Co., 336 So. 2d 80, 87 (Fla. 1976). Here, the defendant sales representatives have offered unrefuted evidence that they played no role in the design, production or manufacture of Pondimin and Redux. Plaintiffs argue that "Florida courts have expanded the doctrine of strict liability to others in the distributive chain including retailers, wholesalers, and distributors." Siemens Energy Automation, Inc. v. Medina, 719 So. 2d 312, 315 (Fl.Dist.Ct.App. 1998) (citations omitted). However, the sales representatives here are not part of the "distributive chain" as they acted neither as distributors nor retailers. Id. Instead, the sales representative defendants served solely as a "conduit of information" between Wyeth and the physicians who ultimately prescribed Redux. See id.
In their affidavits, each of the sales representative defendants states that he or she has no specialized medical or pharmacological education other than training provided by Wyeth. Each has also declared that the Food and Drug Administration ("FDA")-approved package inserts and other information about Wyeth's diet drugs that they conveyed during their visits with physicians was derived exclusively from information provided by Wyeth. See e.g., Coe Decl. at ¶¶ 2-6. Based on the sales representatives' affidavit testimony, plaintiffs have no chance of succeeding on their strict liability claims against the sales representatives since under Florida law, sales representatives who served merely as conduits of information cannot be individually liable for Wyeth's allegedly harmful diet drugs.Siemens Energy Automation, Inc., 719 So. 2d at 315.
Plaintiffs have also brought civil conspiracy claims against the sales representative defendants. They allege that these defendants conspired with sales representatives from other companies to ensure that prescribing physicians were deliberately misled as to the safety of the diet drugs. Compl. at ¶ 77. In response, Wyeth asserts that plaintiffs' conspiracy claims lack a reasonable basis in fact because "a corporation cannot conspire with its own directors, officers, or employees." Greenberg v. Mount Sinai Med. Ctr., 629 So. 2d 252, 256 (Fla.Dist.Ct.App. 1993). In addition, "[u]nder Florida law, a civil conspiracy is derived from the underlying claim that forms the basis of the conspiracy." Allocco v. City of Coral Gables, 221 F. Supp. 2d 1317, 1360 (S.D. Fla. 2002) (citations omitted). Accordingly, "a claim that is found not to be actionable cannot serve as the basis for a conspiracy claim." Id. (citations omitted). "Because the claim underlying the plaintiffs' conspiracy count has failed, and the plaintiffs have not asserted any other unlawful action in support of their conspiracy count," plaintiffs' conspiracy claim against the sales representatives also must fail." Id.
III.
Plaintiffs also bring claims in strict liability, negligence, fraudulent misrepresentation, fraudulent concealment, and civil conspiracy against Eckerd, the in-state pharmacy that allegedly distributed and promoted Wyeth's diet drugs.Wyeth contends that plaintiffs have failed to provide a factual basis for their claims against Eckerd, which they are required to do when faced with a charge of fraudulent joinder. See Boyer, 913 F.2d at 111. Specifically, Wyeth points to the Blue Forms of plaintiffs Kistler and Wells to show that these plaintiffs purchased Pondimin at Mitchell's Drugs and The Prescription Shop, respectively, and not Eckerd. These plaintiffs have not presented any response that refutes these facts. In fact, plaintiffs do not even allege that Eckerd supplied the Pondimin that they obtained from their pharmacies. Because Eckerd has no connection to plaintiffs Wells' and Kistler's suits, there is no possibility that these plaintiffs can recover against defendant Eckerd. Accordingly, Eckerd is fraudulently joined as to plaintiffs Wells and Kistler.
We now turn to plaintiffs Bankston's and Gerwe's claims against Eckerd. Wyeth contends that plaintiffs' claims against Eckerd are not colorable because under Florida law, a pharmacy cannot be liable for correctly filling a prescription. McLeod v. W.S. Merrell Co., 174 So. 2d 736 (Fla. 1965); Johnson v. Walgreen Co., 675 So. 2d 1036 (Fla.Dist.Ct.App. 1996). However, plaintiffs maintain that they are suing Eckerd not only in its capacity as a retail pharmacy, but also as a distributor, marketer and promoter of Wyeth's diet drugs. Mot. to Remand at 40. According to plaintiffs, "Eckerd entered into formal and informal agreements with Wyeth regarding the distribution and promotion of Wyeth's pharmaceuticals, reimbursements for the costs of Wyeth pharmaceuticals, and actually was insured for injuries caused by Wyeth's diet drugs products." Id.
The federal courts in Florida that have previously addressed the issue of a pharmacist liability within this litigation have found that cases cited by Wyeth in support of its position are distinguishable. For example, in McLeod v. W.S. Merrell Co., the Florida Supreme Court proscribed strict liability for the retail selling of prescription drugs. However, as Judge Maurice M. Paul of the United States District Court for the Northern District of Florida found, "McLeod does not explicitly prohibit strict liability claims against retailers who market, advertise, and distribute prescription drugs to consumers like plaintiffs." Brown et, al. v. American Home Prods. Corp., et al., Case No. 99cv240 (N.D. Fla. Mar. 7, 2000). We agree with our sister court in the Northern District of Florida that the cases on which defendants rely do not extinguish plaintiffs' claims against Eckerd in its capacity as a distributor, marketer and promoter.
See e.g., Fazio v. Wyeth-Ayerst Labs., et al., Case No. 99-2656-CIV-T-24C (M.D. Fla. Jan. 20, 2000); Oberoi v. American Home Prods. Corp., et al., Case No. 99-2317-CIV-T-24C (M.D. Fla. Nov. 23, 1999).
Nevertheless, we are not persuaded by the evidence plaintiffs offer to support their claims against Eckerd in its capacity as a co-promoter of the diet drugs. For example, plaintiffs point to a document titled "Reimbursement Agreement," which plaintiffs claim is an agreement between Wyeth and Eckerd regarding the co-promotion of the diet drugs. They also include as exhibits to their remand motions certificates of insurance listing A.H. Robins Company, Inc. ("A.H. Robins") as the certificate holder and additional insured. Pl's Mot. to Remand, Ex. L. The "Reimbursement Agreement" to which plaintiffs refer is labeled "DRAFT," and is signed by neither Wyeth nor Eckerd. See Wyeth's Opp'n to Pl's Renewed Mot. to Remand, Ex. X. In addition, the most recent certificate of insurance is dated 1986, three years before Wyeth acquired A.H. Robins. Based on the record before us, we find that plaintiffs have no colorable claim against Eckerd for purportedly promoting Wyeth's diet drugs.
Plaintiffs further contend that Eckerd assumed a duty to warn of the alleged dangers of Wyeth's diet drugs and their interactions with other drugs through its own advertising. They rely on Sanderson v. Eckerd Corp., 780 So. 2d 930, 933 (Fla. Dist.Ct.App. 2002), in which a Florida court refused to dismiss an action against a dispensing retail pharmacist based on the "voluntary undertaking" doctrine. The Sanderson court found that where a pharmacist advertises that its computer system would detect and warn customers of adverse drug reactions and interactions and the pharmacist fails to do so, a plaintiff may have a cause of action against the pharmacist for breaching the duty that he or she voluntarily assumed. Id. at 933-34. Unlike the plaintiffs in Sanderson, plaintiffs in this action do not allege that Eckerd's pharmacist negligently operated its computer system or that the plaintiffs relied on Eckerd's advertised promise and for that reason had their prescription filled there. Id. at 933-34. Thus, there is "no reasonable basis in fact or colorable ground" supporting the claims against Eckerd. Boyer, 913 F.2d at 111.
IV.
For all of the reasons stated above, Wyeth has clearly demonstrated that Eckerd and the sales representative defendants are fraudulently joined. Accordingly, we will deny plaintiffs' motions to remand these actions to the Circuit Court of Escambia County, Florida and will dismiss the complaints as to Eckerd and the sales representative defendants.
PRETRIAL ORDER NO.
AND NOW, this day of August, 2004, for the reasons set forth in the accompanying Memorandum, it is hereby ORDERED that:(1) the motion of plaintiffs to remand is DENIED; and
(2) all claims against defendants Arthur Vernon, Richard Coe, Debra Ann Berry, and Eckerd Corporation are DISMISSED.