Monroe v. Smithkline Beecham Corporation et al

Memorandum Defendant GlaxoSmithKline LLC's Amended Memorandum in Opposition to Plaintiffs' Motion to Remand re MOTION to Remand

E.D. Pa.June 28, 2010

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA THOMAS MONROE, JR. and AL VINIA MONROE, Plaintiffs, Civil Action No. 2:10-cv-02140-JCJ v. SMITHKLINE BEECHA CORPORATION d/b/a GLAXOSMITHKLINE; and GLAXOSMITHKLINE LLC, Defendants. DEFENDANT GLAXOSMITHKLINE LLC'S AMENDED! MEMORANDUM IN OPPOSITION TO PLAINTIFFS' MOTION TO REMAD Plaintiffs' motion to remand, which was not timely filed under 28 U.S.C. 1447(c), reflects a pivotal misunderstanding of corporate structue and its effect on the jursdictional analysis. To begin with, Plaintiffs, citizens of New York, sued a corporation that had already converted to a limited-liability company at the time of filing. SmithKine Beecham Corporation was then and is now GlaxoSmithKine LLC ("GSK LLC"). As a limited-liability company, GSK LLC is a citizen of any state in which its members are citizens. GSK LLC's only member is GlaxoSmithine Holdings (Americas) Inc. ("GSK Holdings"), a Delaware corporation with its principal place of business in Delaware. GSK LLC is therefore a citizen of Delaware - not Pennsylvana - and so removal is not defeated by the resident-defendant rule set forth in 28 U.S.C. § 1441(b). i GlaxoSmithKline LLC's original Memorandum in Opposition to Plaintiffs' Motion to Remand has been amended to bring an important issue to the Cour's attention-that Plaintiffs' motion to remand was filed outside of the 30-day time period prescribed by 28 U.S.c. § 1447(c). See infra Argument, Section I., p.5. GSK LLC's Amended Memorandum is timely, as it is fied within the period allowed for a response under Local Rules 5.1.2(8)( e) and 7 .1 (c). Case 2:10-cv-02140-JCJ Document 17 Filed 06/28/10 Page 1 of 19 Plaintiffs argue that GSK LLC is stil a citizen of Pennsylvana because its "nerve center" is allegedly there, but that misses the point. GSK LLC is not a corporation to which the "nerve center" test applies. It is a limited-liability company, and its citizenship is determined by that of its members. Because GSK LLC's sole member, GSK Holdings, is a Delaware citizen, so too is GSKLLC. Beyond that, Plaintiffs argue only that SmithKine Beecham Corporation is stil subject to suit in Pennsylvania under a statute that subjects dissolved corporations to suit for two years. But SmithKine Beecham did not "dissolve" in the sense of Section 1979, the statute Plaintiffs cite. It "domesticated itself under the laws of another jursdiction" as provided in Section 1980. The purose of Section 1979 - that creditors or other plaintiffs remain able to sue the corporate entity - has no application in this instace because the Pennsylvania corporation did not in any sense "dissolve," but rather converted into a Delaware limited-liability company that can stil be sued. Under established law, GSK LLC is a Delaware citizen. The cour should deny Plaintiffs' untimely motion to remand and grant GSK LLC's unopposed motion to transfer venue to the Eastern District of New York or, alternatively, the Middle District of North Carolina. FACTUAL BACKGROUND SmithKine Beecham Corporation was previously incorporated under Pennsylvana law. On October 27, 2009, SmithKine Beecham converted into a Delaware corporation and then subsequently converted into a Delaware limited-liability company. The purose of this corporate restructung, as explained below, was to allow for efficient movement of certin assets into a new joint ventue and to allow for both the restructuing and movement of those assets without dissolution of the operating entity that has been sued in this litigation. The HIV assets that 2 Case 2:10-cv-02140-JCJ Document 17 Filed 06/28/10 Page 2 of 19 prompted the restructurng are not involved in this suit, but movement of those assets effected a change in corporate structue that impacted GSK LLC's citizenship. In April 2009, GlaxoSmithKline pIc ("GSK") and Pfizer anounced a joint ventue to discover, develop, and commercialize HIV/AIDS medications. Declaration of Julian Heslop ("Heslop Decl.") ir 5, attached as Exhibit A to GSK LLC's Response in Opposition to Plaintiffs Motion to Remand. The new joint ventue, ViiV Healthcare ("ViiV"), was designed to provide paricular focus and renewed emphasis on both the sale and creation of innovative HIV treatments in the United States and worldwide, in contrast to the efforts that had previously been conducted separately by GSK and Pfizer. ¡d. Formation of ViiV required the separation of GSK's HIV assets from other GSK entities. ¡d. To accomplish the movement of assets to ViiV in the maner deemed most efficient from a corporate structue and taxation point of view, SmithKine Beecham converted from a corporation to a limited-liability company. ¡d. at ir 6. Absent the conversion, the transfer of the u.s. HIV business from SmithKine Beecham to ViiV would have triggered a tax of hundreds of milions of dollars. ¡d. GSK would not have established the ViiV joint ventue if doing so would have resulted in such a sizable tax bil. ¡d. Another importt par of the restrctung was conversion to the LLC form without dissolution of the operating entity. Under Pennsylvania law, conversion to an LLC would have entailed a termination of the SmithKine Beecham entity and movement of assets into a newly- formed LLC entity. See 15 Pa. Cons. Stat. § 8956(a), (c) (allowing a Pennsylvana corporation to merge into a limited-liability company); but see 15 Pa. Cons. Stat. § 8959(a), (b) (the effect of. such a merger is to terminate the existence of the corporation and to vest the assets of the corporation in the suriving limited-liability company). Under Delaware law, by contrast, the 3 Case 2:10-cv-02140-JCJ Document 17 Filed 06/28/10 Page 3 of 19 conversion could be done without any break in the continuity of the legal entity. See 6 DeL. Code § 18-214. Continuity of the legal entity was deemed important for a varety of reasons, paricularly having to do with avoiding (a) complex effects on many third-pary agreements that contained restrictions on transfer and assignment and (b) issues related to ownership of intellectual propert rights. Heslop Decl. ir 10. Delaware domestication was deemed preferable for that reason. Additionally, under Delaware law, the owner/member of an LLC is considered a distinct legal entity and is not liable for the debts of the LLC. 6 DeL. Code § 18-303(a). The key puroses of entity formation could thus be accomplished under a Delaware LLC strctue in ways not available in Pennsylvania. On October 27,2009, nearly six months before this lawsuit was filed, SmithKine Beecham became a Delaware corporation and then converted into a limited-liability company organized under Delaware law - GSK LLC? Heslop Decl. irir 8-9. GSK Holdings is the sole member of GSK LLC. ¡d. at ir 11. GSK Holdings is incorporated under Delaware law and is headquarered in Delaware. ¡d. at irir 13-14. It holds financial assets and liabilities, largely in relation to the GSK group of companes. ¡d. at ir 15. It has a simple structue and narow asset management fuction, but is nevertheless an importt entity in the overall corporate organzation. ¡d. In recent years, it has owed more than $10 bilion of intra-group debt, which arose as par of the restructung required with the GlaxoWellcome and SmithKine Beecham merger in 2000, and subsequently repaid that debt. ¡d. GSK Holdings formally approves such issues as the timing and magnitude of dividend payments up the corporate chain to its shareholder. ¡d. It pays taxes, and it has litigated over its rights and obligations. !d. GSK Holdings does not manufactue or sell any products or services. 2 Because Pennsylvania law requires a corporation to terminate before forming as an LLC, SmithKline Beecham first became a Delaware corporation and then imediately converted into an LLC. Once SmithKline Beecham was a Delaware corporation, it could take advantage of Delaware law that allows a domestic corporation to convert directly into an LLC without any termination or dissolution. See 6 DeL. Code § 18-214. 4 Case 2:10-cv-02140-JCJ Document 17 Filed 06/28/10 Page 4 of 19 Id. By contrast, GSK LLC was organized for the purose of researching, developing, and marketing pharaceutical products. Id. at ir 16. GSK Holdings does not conduct board-of- directors meetings in concert with any meetings of GSK LLC. !d. ARGUMENT I. Plaintiffs' Motion to Remand Is Untimely Plaintiffs missed the window in which they could file a motion to remand. GSK LLC filed its Notice of Removal on May 10,2010. On June 10,2010 - 31 days later - Plaintiffs fied their Motion to Remand, alleging that GSK LLC is a citizen of Pennsylvana and that removal was improper under the resident-defendant rule set fort in 28 U.S.C. § 1441(b). See Mot. to Remand 3. Because Plaintiffs' motion to remand is based on an alleged procedural defect in removal, it should have been filed within 30 days of the Notice of Removal pursuant to 28 U.S.C. § 1447(c). Plaintiffs' motion is untimely, and therefore this Cour should deny the motion to remand. 28 U.S.C. § 1447(c) provides, "A motion to remand the case on the basis of any defect other than lack of subject matter jursdiction must be made within 30 days after the filing of the notice of removal under section 1446(a)." Section 1441(b)'s resident-defendant rule is considered a procedural defect in removal, and purorted noncompliance with the rule "does not deprive a federal cour of subject matter jursdiction." Korea Exch. Bank, NY v. Trackwise Sales Corp., 66 F.3d 46, 50-51 (3d Cir. 1995) (finding that the distrct cour had no statutory authority to remand a case based on the resident-defendant rule after the 30-day period under 1447(c)); see also Roxbury Condo. Assoc., Inc. v. Anthony S. Cupo Agency, 316 F.3d 224, 227 (3d Cir. 2003) ("Section 1441 is a procedural rather than jursdictional statute."); Ramsaur v. 5 Case 2:10-cv-02140-JCJ Document 17 Filed 06/28/10 Page 5 of 19 Mossman, No. Civ.A. 04-6062, 2005 WL 418043, *1 (E.D. Pa. Feb. 22, 2005) ("The in-state defendant defect is deemed waived if it is not raised within thirt days."). Plaintiffs' motion to remand was not filed within the 30-day time period prescribed by 28 U.S.C. § 1447(c), and therefore Plaintiffs have waived their opportity to challenge removal procedure-specifically, their assertion that GSK LLC is a citizen of Pennsylvana. Plaintiffs' opportty to file a motion to remand on these grounds expired on June 9-30 days after GSK filed its Notice of RemovaL. Each time this Cour has addressed this issue since 2004, it has held that plaintiffs have 30 days - and 30 days only - from the filing of the notice of removal in which to file a motion to remand. See Ramos v. Quien, 631 F. Supp. 2d 601,609 (E.D. Pa. 2008) (Baylson, J.) (motion to remand filed 31 days after removal was untimely because the 30-day period to file a motion to remand under section 1447(c) is not extended by Federal Rule of Civil Procedure 6( d), as the period to file a motion to remand commences when the defendant files a notice of removal, not when the notice is served) (providing comprehensive analysis of Rule 6 and rejecting previous case law from 1992 and 1995); Brown v. Modell's PA II, Inc., CIV. A. 08- 1528 (E.D. Pa. July 1, 2008) (Yohn, J.) (same); In re Diet Drugs, No. Civ.A. 03-20614, 2004 WL 2062894, *2 (E.D. Pa. Sept. 14,2004) (Barle, C. J.) (same). Plaintiffs' motion to remand is untimely and must be denied. II. The Citizenship of GSK LLC Is Controlled by the Citizenship of GSK Holdings Plaintiffs incorrectly assert that the location of GSK LLC's "principal place of business" determines its citizenship. Because it is an LLC, what matters is the citizenship of its members, and here, GSK LLC's only member is a Delaware corporation whose principal place of business is in Delaware. Thus, GSK LLC is a citizen of Delaware rather than Pennsylvana, and removal is not defeated by the resident-defendant rule. 6 Case 2:10-cv-02140-JCJ Document 17 Filed 06/28/10 Page 6 of 19 An LLC is not a corporation, and the corporate citizenship test does not apply. It is well established that a non-corporate entity, like a parnership or LLC, is considered a citizen of any state in which one of its members is a citizen. Carden v. Arkoma Assoc., 494 U.S. 185, 195-196 (1990) (limited parership); Zambell Fireworks Mfg. Co., Inc. v. Wood, 592 F.3d 412,418 (3d Cir. 2010) (LLC); see 13F Charles Alan Wright & Arhur R. Miler, Federal Practice and Procedure §§ 3630, 3630.1 (3d ed. 2009) (discussing history and application of rule and citing cases). GSK LLC has one member: GSK Holdings. Therefore, the citizenship of GSK LLC depends entirely on the citizenship of GSK Holdings. In Zambell, the Third Circuit recently clarfied the distinction in the rules for determining the citizenship of an LLC. The plaintiff, a Pennsylvania citizen, asserted diversity jursdiction on the basis that one of the defendants was "a Nevada limited liability company with its principal place of business (in Nevada)." Id. at 418. That defendant, however, had one member, a Louisiana LLC, and that LLC in tu had at least one member who was a Pennsylvana citizen. !d. at 420. Tracing citizenship back up "though the layers," the cour found that the Louisiana LLC was a citizen of (among other states) Pennsylvania, and that the Nevada LLC was therefore also considered a citizen of that state. !d. On ths basis, the cour concluded that complete diversity did not exist. In doing so, it emphasized the distinction between determining the citizenship of an LLC and the citizenship of a corporation. "Although limited liability entities resemble corporations in many respects . . . , the Supreme Cour has flatly rejected arguments in favor of extending the rule of corporate citizenship to analogously formed business entities." Id. Instead of attempting to locate the "principal place of business" of an LLC, cours must inquire into the citizenship of the LLC's members. Id.; see also Pippett v. Waterford Dev., LLC, 166 F. Supp. 2d 233, 236 (E.D. Pa. 2001) (finding diversity jurisdiction 7 Case 2:10-cv-02140-JCJ Document 17 Filed 06/28/10 Page 7 of 19 when plaintiffs were citizens of New Jersey and Pennsylvania and defendant was an LLC whose members were Connecticut citizens). There is no question that GSK Holdings and GSK LLC are separate business entities organized in a traditional parent-subsidiar structure and that there are legitimate and compelling business reasons for using this type of structue. Plaintiffs' suggestion that SmithKline Beecham's conversion to GSK LLC was an "effortr) at corporate maneuvering" is based on an incomplete understanding of the facts. As explained above, SmithKine Beecham converted into an LLC to facilitate the creation of a joint ventue dedicated to the discovery, development, and commercialization of innovative HIV / AIDS medications. This conversion was not an attempt to manipulate diversity jursdiction rules, but was instead done for legitimate business reasons in light ofthe evolving business interests of GSK. See supra pp. 3_4.3 Once it became necessar for SmithKine Beecham to convert into a limited-liability company, there were compellng reasons for completing this conversion in Delaware instead of Pennsylvana. Delaware law allows a corporation to directly convert into a limited-liability company without first terminating the corporation. See 6 DeL. Code § 18-214. Here, the converted business entity surived, and this avoided complex known and unown effects on many third-pary agreements that contained restrictions on transfer and assignment. Heslop Decl. ir 10. A direct conversion also avoided issues related to ownership of intellectual propert rights. Id. As a limited-liability company, GSK LLC's citizenship depends entirely on the citizenship of its sole member - GSK Holdings. In tu, GSK Holdings' citizenship is 3 In addition to the reasons described on pages 3-4, there are other business reasons supporting conversion to an LLC. For example, in contrast to statutes governing corporations' by-laws, the laws of most states allow an LLC's members great flexibility in determining how the LLC wil be governed by placing very few limitations, if any, on what may be included in, or excluded from, the LLC's operating agreement. See, e.g., 6 DeL. Code § 18-101(7). 8 Case 2:10-cv-02140-JCJ Document 17 Filed 06/28/10 Page 8 of 19 determined by the dual-citizenship rule applicable to corporations - making it a citizen of the state of its incorporation and the state where it has its principal place of business. 28 U.S.c. § 1332(c). As described more fully below, GSK Holdings is incorporated in Delaware and maintains its principal place of business in Wilmington, Delaware - making both it and GSK LLC citizens of Delaware alone. III. GSK Holdings' Principal Place of Business Is Located in Delaware It is undisputed that GSK Holdings is incorporated in Delaware. See Delaware Deparment of State: Division of Corporations Entity Details for GlaxoSmithKine Holdings (Americas) Inc., attched as Exhibit B to GSK LLC's Response in Opposition to Plaintiffs Motion to Remand. Therefore, the only remaining question is the location of GSK Holdings' principal place of business. As the Supreme Cour recently held, the "nerve center" test is now applied to determine the principal place of business of a corporation. Hertz Corp. v. Friend, 130 S. Ct. 1181 (2010). In Hertz, the Supreme Cour resolved a circuit split regarding the appropriate test for determining a corporation's principal place of business. The Cour adopted the "nerve center" test - determining a corporation's principal place of business to be "where a corporation's officers direct, control, and coordinate the corporation's activities." Id. at 1192. The Cour rejected other tests that focused on a corporation's general business activities, such as the place of inventory, employees, or physical plants. See id. at 1191. Under the "nerve center" test, "( c )ours do not have to tr to weigh corporate fuctions, assets, or revenues different in kind, one from the other." Id. at 1194. GSK Holdings' directors and officers "direct, control, and coordinate" its activities from Delaware. Because GSK Holdings has a narow asset management fuction, it requires 9 Case 2:10-cv-02140-JCJ Document 17 Filed 06/28/10 Page 9 of 19 relatively little operational direction, control, and coordination. Heslop Decl. ir 15. GSK Holdings' fuction does not include directing or managing GSK LLC, its pharaceutical subsidiar. Id. at ir 16. GSK LLC is a manager-managed LLC, and its member, GSK Holdings, has elected individuals to manage the business and operations of GSK LLC. Id. at ir 12. Thus, little action is required from GSK Holdings as the sole member of GSK LLC. GSK Holdings' Board of Directors holds quarerly meetings in Delaware. !d. at ir 22. At the quarerly meetings, the Board of Directors reviews and approves the corporate accounts, and reviews, controls, and ratifies the key business activities of GSK Holdings. Id. Minutes reflecting the actions of the GSK Holdings Board are stored with the corporate secretar at corporate headquarers in Wilmington, Delaware. Id. The administrative fuctions attendant to the meetings of the directors, including the keeping of minutes and other efforts of the GSK Holdings' Secretar and Assistat Secreta, are centralized in Wilmington, Delaware. Id. GSK Holdings' activities are controlled and coordinated though the actions and decisions of its officers and directors. Id. at ir 19. Being a holding company, those activities are relatively few and are controlled and managed primarly through review and ratification of financial accounts. Id. GSK Holdings' Delaware headquarers is the center of its direction, coordination, and control- its nerve center. Plaintiffs point to GSK LLC's corporate offices in Pennsylvana and assert that the "nerve center" of its pharaceutical business is in Pennsylvana. Mot. to Remand 5. Again, that is not the issue. The issue is the citizenship of GSK Holdings. If Plaintiffs are suggesting that the two entities are really one and the same, so that the corporate form should be disregarded for this purpose, Plaintiffs are wrong. As explained above, GSK Holdings is a separate company engaged in holding financial assets and certain obligations of the GSK group of companes. It is 10 Case 2:10-cv-02140-JCJ Document 17 Filed 06/28/10 Page 10 of 19 not engaged in manufacturng or sellng any products or services. Heslop Decl. ir 15. GSK Holdings has a simple structue and a limited fuction, and, consequently, the only direction that GSK Holdings requires relates to financial and strategic decisions on its notes, loans, and investments. That direction is delivered primarly in the form of review and approval of financial accounts at the quarerly Directors meetings in Delaware. For operational activity of GSK Holdings that occurs outside of Delaware, in paricular treasur, ta-planng, or other financial activities, the direction and supervision is given ultimately by personnel resident in London, not in Philadelphia. !d. at ir 22. So long as the corporate formalities are maintained, a cour must base a determination of citizenship solely on the attbutes of the entity in question. See Topp v. CompAir, Inc., 814 F.2d 830, 835 (1st Cir. 1987) ("(S)o long as the entity's corporate form is entitled to credibility, the nerve center test looks for the localized nerve center from which the corporation in issue is directly run."). GSK Holdings is ru from Delaware, not Pennsylvania. Plaintiffs also cite unelated cour documents suggesting that GSK LLC is a Pennsylvania citizen. These documents do not change the result. The Third Circuit has recognized that statements of a corporation's principal place of business in prior pleadings "have no intrinsic capacity either to establish or disestablish jursdiction." Mennen Co. v. At!. Mut. Ins. Co., 147 F.3d 287, 293 (3d Cir. 1998).4 Moreover, two of the pleadings Plaintiffs cite were related to patent infngement cases, where the cour's jursdiction was based on a federal question, and so the phrase "a principal place of business" was not being used to establish diversity of citizenship, pursuant to 28 U.S.C. § 1332(c). See 28 U.S.C. §§ 1331, 1338. The third pleading cited by 4 Because Mennen was decided before Hertz, the court's determination of the par's principal place of business was based on the former "center of corporate activities" test, which is no longer applicable. However, the Third Circuit's evaluation of the effect of prior statements ofa corporation's principal place of business was not overrled. 11 Case 2:10-cv-02140-JCJ Document 17 Filed 06/28/10 Page 11 of 19 Plaintiffs in the Woodson-Gatson matter simply included a present-tense statement regarding the citizenship of SmithKline Beecham Corporation, the name of the entity before its conversion to GSK LLC. The substance of the statement is correct (Smithline Beecham was a Pennsylvania corporation with its principal place of business in Pennsylvania) and in no way conficts with the citizenship position taken in the Notice of Removal that GSK LLC filed in this case. In sum, the pleadings cited by Plaintiffs do not change any of the relevant facts showing that GSK Holdings, and therefore GSK LLC, is a Delaware citizen. The procedure for determining corporate citizenship is clearly set out by statute and the Supreme Cour's decision in Hertz. Plaintiffs seem to ask for a different result solely because GSK LLC - a separate corporate entity - performs publicly-visible activities in Pennsylvana. But the Supreme Cour addressed ths issue and held that publicly-visible activities occurrng in one state wil not determine the location of a corporation's principal place of business if the corporation is being directed and controlled by officers in another state. Hertz, 130 S. Ct. at 1194. The Cour recognized that "seeming anomalies will arse" under the new test, but that we must accept them "in view of the necessity of having a clearer rule." Id. at 1194. That is, in adopting the "nerve center" test, the Supreme Cour recognized that other tests had proven too difficult to apply, unecessarly complicated matters, and wasted judicial resources. To the extent Plaintiffs ask this Cour to analyze the entire corporate strctue and varous business activities of separate GSK entities, Plaintiffs would be undermining the Supreme Cour's basis for adopting a simpler test. Indeed, the inquiry must be limited to the location where GSK Holdings' activities are directed, controlled, and coordinated. See Hertz, 130 S .Ct. at 1192. GSK Holdings is not engaged in manufactung or selling products or services, and its fuction is limited, but it nevertheless has a genuine corporate headquarers and performs 12 Case 2:10-cv-02140-JCJ Document 17 Filed 06/28/10 Page 12 of 19 genuine and important corporate fuction. An untold number of other corporate families include holding companies, and there is no question that these are separate and independent corporate entities so long as the corporate formalities have been observed, and that is the case here. The "nerve center" of GSK Holdings is located in Delaware, and so, GSK Holdings has its principal place of business in Delaware, not Pennsylvania. iv. SmithKline Beecham Corporation Was Converted into GSK LLC and Cannot Be Sued as a Dissolved Corporation Plaintiffs rely on the Southern District of Ilinois's interpretation of Pennsylvania statutes to support their claim that SmithKine Beecham can be sued as a dissolved corporation. However, this reasoning is based on a misinterpretation of Pennsylvana law and a misunderstanding of the events related to SmithKine Beecham's conversion into a Delaware limited-liability company. Therefore, the Cour should decline to adopt the Ilinois cour's reasoning. A. SmithKline Beecham Did Not Dissolve Under Pennsylvania Law On October 27, 2009, nearly six months before this lawsuit was filed, SmithKline Beecham "domesticated itself under the laws of another jursdiction" as allowed by Pennsylvana law. See 15 Pa. Cons. Stat. § 1980. In accordance with that law, Smithine Beecham surendered its corporate charer under the laws of Pennsylvana by filing modified aricles of dissolution with the Pennsylvania Deparment of State. As explained in the offcial commentar to Section 1980, this fiing did not cause an actual dissolution, but rather simply confrmed the change in status: 13 Case 2:10-cv-02140-JCJ Document 17 Filed 06/28/10 Page 13 of 19 This section (1980) is intended to provide a procedure under which a domestic business corporation that has domesticated itself under the laws of another jursdiction can clarfy its status in Pennsylvania. ... The effect of filing under this section is not to dissolve the corporation in the ordinary sense but simply to terminate its status as a domestic business corporation. The existence of the corporation is not affected because the same entity continues to exist in the new jursdiction of incorporation. 15 Pa. Cons. Stat. § 1980 cmt (West 2010) (emphasis added). Smithline Beecham's aricles of dissolution noted, "Smithine Beecham Corporation is being domesticated to Delaware and subsequently converted to a Delaware Limited Liability Company under Delaware and Pennsylvana law." See Excerpt from Aricles of Dissolution, attched as Exhbit C to GSK LLC's Response in Opposition to Plaintiffs Motion to Remand. The certificate of formation of GSK LLC also indicates that GSK LLC "shall be a continuation of Smithline Beecham Corporation." Heslop Decl. ir 9. The aricles of dissolution merely terminated SmithKine Beecham's status as a domestic business corporation under Pennsylvana law, and the entity continued to exist under Delaware law. Ths is distinguishable in material ways from the situation where a corporation actually dissolves. In an actual dissolution, a corporation ceases to exist, and its assets are distrbuted to the shareholders. Under the procedure SmithKine Beecham followed, however, it was only required to disclose its name and address (and those of its directors and offcers), its date of incorporation, the statute under which it was incorporated, and a statement that its shareholders had approved the filing. See 15 Pa. Cons. Stat. § 1977(b)(1)-(4). Had Smithine Beecham actually been "dissolving" in the sense Plaintiffs use that term, it would have been required to include all of the following information in its aricles of dissolution: . A statement that all of the liabilities of the corporation had been discharged, or that adequate provision had been made therefor; 14 Case 2:10-cv-02140-JCJ Document 17 Filed 06/28/10 Page 14 of 19 . A statement that all of the remaining assets of the corporation would be distributed to the shareholders of the corporation; . A statement that no actions or proceedings were pending against the corporation in any court or that adequate provisions had been made for the satisfaction of any judgment that may be obtained against the corporation; and . A statement that notice of the winding-up proceedings of the corporation had been mailed to each known creditor and claimant of the corporation. See 15 Pa. Cons. Stat. § 1977(b)(5)-(8). But because SmithKline Beecham did not dissolve, it was not required to distrbute its assets to its shareholders, make provisions for its liabilities, or wind-up its affairs, and so it was not required to make such statements in its modified aricles of dissolution. The procedure was also consistent with Delaware law. The Delaware Code explains that "(u)nless otherwise agreed for all purposes of the laws of the State of Delaware or as required under applicable non-Delaware law, the converting other entity shall not be required to wind-up its affairs or pay its liabilities and distribute its assets, and the conversion shall not be deemed to constitute a dissolution of such other entity and shall constitute a continuation of the existence of the converting other entity in the form of a corporation of this State." 8 DeL. Code § 265(f) (emphasis added).5 Although the filing used to domesticate in another state contains some of the information required for the fiing used to dissolve a corporation, a plain reading of the statute and its commentar makes it apparent that SmithKine Beecham merely "surender( ed) its charer under the laws of (Pennsylvana)." See 15 Pa. Cons. Stat. § 1980. SmithKine Beecham never dissolved - it converted into a limited-liability company and continues to exist under Delaware law. 5 Similarly, when SmithKline Beecham converted into GSK LLC under Delaware law, the conversion was "not deemed to affect any obligations or liabilities of (SmithKline Beecham) incured prior to its conversion to a domestic limited liability company." 6 DeL. Code § 18-214(e). 15 Case 2:10-cv-02140-JCJ Document 17 Filed 06/28/10 Page 15 of 19 B. Plaintiffs' Interpretation Is Inconsistent with the Purpose of the Pennsylvania Survival Statute Plaintiffs rely on the Southern District of Ilinois's interpretation of the modified aricles of dissolution to argue that SmithKine Beecham can be sued under Pennsylvana's surival statute - which is applicable only to corporations that no longer exist. Such an interpretation of the surival statute is inconsistent with its purose. When a corporation dissolves, it distributes all of its assets to its shareholders and ceases to exist. Without a surival statute, a corporation could dissolve and distribute its assets to its shareholders to avoid its debts. Creditors of the dissolved corporation would have no way to recover. However, when a corporation domesticates itself to another state, as SmithKline Beecham did, the corporation continues to exist under the laws of the other state. See 8 DeL. Code § 265(g). Its liabilities and debts are preserved against the entity in the new state. See 8 DeL. Code § 265(f) (When a non-Delaware entity converts into a Delaware corporation, "all debts, liabilities and duties of the other entity that has converted shall remain attched to the (Delaware corporation) to which such other entity has convertedr) and may be enforced against it to the same extent as if said debts, liabilities and duties had originally been incured or contracted by it in its capacity as a (Delaware corporation)."). The successor entity's responsibility for the debts and liabilities of the converted entity is not based on the surival statute. The Southern Distrct of Ilinois misapplied Pennsylvana's surival statute. See Alexander v. SmithKline Beecham Corp., No. 09-cv-1072-DRH, 2010 WL 750031 (S.D. IlL. Apr. Mar. 3,2010). The cases that cour relied on do not suggest that a corporation should be subject to the surival statute when it merely domesticates to another state. Instead, the cases ilustrate the strict procedure in place for corporations to dissolve and cease to exist. See F.P. Woll & Co. 16 Case 2:10-cv-02140-JCJ Document 17 Filed 06/28/10 Page 16 of 19 v. Fifh & Mitchell Sf. Corp., No. Civ.A.96-CV-5973, 2001 WL 34355652, at *2 (E.D. Pa. Dec. 13, 2001) ("Pennsylvania has a detailed statutory scheme for voluntar corporate dissolution.") (internal citations omitted and emphasis added). The Southern District of Ilinois overlooked this detailed statutory scheme and, instead, focused only on four of the eight requirements for actual corporate dissolution under 15 Pa. Cons. Stat. § 1977(b). The purose of the surival statute is "to set up an orderly procedure for the dissolution of a business corporation and at the same time to fix a time beyond which the shareholders need no longer concern themselves about the possibility that creditors might assert claims which could upset the dissolution and resurect the corporation for the purose of defending against the alleged claims." See Am. Optical Co. v. Phi/a. Elec. Co., 228 F. Supp. 293,295 (E.D. Pa. 1964). When a corporation does not actually dissolve, there is no question of resurection because it continues to exist in another form. Plaintiffs' interpretation of the statute ignores its very purose and intent. As the successor entity, GSK LLC succeeded to the liabilities of SmithKine Beecham, thus GSK LLC - not SmithKine Beecham - is the entity subject to suit. CONCLUSION Plaintiffs' motion to remand was not timely filed under 28 U.S.C. § 1447(c). The citizenship of GSK LLC is determined solely by the citizenship of GSK Holdings. The Supreme Cour's decision in Hertz and the facts ofthis case lead to only one conclusion - GSK Holdings has its principal place of business in Delaware, making it - and GSK LLC - citizens of Delaware alone. Complete diversity exists as between the New York plaintiffs and the Delaware defendant, and the resident-defendant rule does not defeat removal because GSK LLC is not a citizen of Pennsylvania. SmithKine Beecham did not dissolve and canot be sued under the Pennsylvania surival statute regarding dissolved corporations. The Cour should deny 17 Case 2:10-cv-02140-JCJ Document 17 Filed 06/28/10 Page 17 of 19 Plaintiffs' untimely motion to remand and grant GSK LLC's unopposed motion to transfer venue to the Eastern District of New York or, alternatively, the Middle Distrct of North Carolina. Dated: June 28, 2010 Of Counsel: Timothy A. Thelen, Esquire Assistant General Counsel GlaxoSmithKine LLC 5 Moore Drive Research Triangle Park, NC 27709 Respectfully submitted, lsI Ellen Rosen Rogoff Ellen Rosen Rogoff Danel T. Fitch Leslie M. Greenspan Pa. Attorney Nos. 43468, 53717, 91639 STRADLEY, RON ON, STEVENS & YOUNG, LLP 2600 One Commerce Square Philadelphia, PA 19103-7098 (215) 564-8000 Brian P. Johnson JOHNSON, TRENT, WEST & TAYLOR, L.L.P. 919 Milam Street, Suite 1700 Houston, TX 77002 (713) 222-2323 Admitted Pro Hac Vice Madeleine McDonough SHOOK, HAY & BACON L.L.P. 1155 F Street, NW, Suite 200 Washington, D.C. 20004-1305 (202) 639-5600 Admitted Pro Hac Vice Attorneys for Defendant, GlaxoSmithKine LLC 18 Case 2:10-cv-02140-JCJ Document 17 Filed 06/28/10 Page 18 of 19 CERTIFICATE OF SERVICE I, Ellen Rosen Rogoff, Esquire, hereby certify that on June 28, 2010, I caused a true and correct copy of the foregoing Defendant GlaxoSmithKine LLC's Amended Memorandum in Opposition to Plaintiff s Motion to Remand to be filed with the Cour via the Electronic Cour Filing system. The document is available for review and downloading on the Electronic Cour Filing system and such electronic fiing automatically generates a Notice of Electronic Filing constituting service of the filed document on all counsel of record identified on the docket and listed below: Lee B. Balefsky, Esquire Michelle Tiger, Esquire KLINE & SPECTER, P.C. 1525 Locust Street, 19th Floor Philadelphia, P A 19102 Justin G. Witkin, Esquire A YLSTOCK, WITKIN, KRIS & OVERHOLTZ, PLLC 803 Nort Palafox Street Pensacola, FL 32564 Attorneys for Plaintif lsI Ellen Rosen Rogoff Ellen Rosen Rogoff Case 2:10-cv-02140-JCJ Document 17 Filed 06/28/10 Page 19 of 19