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Vu v. Ortho-McNeil Pharmaceutical

March 9, 2009

MELANNIE VU AND KEN VU, INDIVIDUALLY AND AS SUCCESSORS-IN-INTEREST TO CONNOR VU, DECEASED, PLAINTIFFS,
v.
ORTHO-MCNEIL PHARMACEUTICAL, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Susan Illston United States District Judge

ORDER DENYING MOTION TO REMAND AND GRANTING MOTION TO TRANSFER VENUE

Defendant Costco filed a motion to transfer venue to the Central District of California. Plaintiffs subsequently moved to remand this case to state court. The motions are scheduled for hearing at 9:00am on March 13, 2009. Pursuant to Civil Local Rule 7-1(b), the Court finds this matter appropriate for resolution without oral argument, and hereby VACATES the hearing. Having considered the arguments of counsel and the papers submitted, the Court hereby DENIES plaintiffs' motion to remand and GRANTS Costco's motion to transfer venue to the Central District of California.

BACKGROUND

Plaintiffs filed this wrongful death and products liability suit in California Superior Court in San Francisco County on November 13, 2008. The complaint, which named Ortho-McNeil Pharmaceutical, Inc., Costco Wholesale Corporation, Johnson & Johnson Services, Inc., and Keiko Shibata, asserts claims under strict products liability, negligence, fraudulent concealment, and violation of California Civil Code § 1750, et seq.*fn1

Plaintiffs' basic claim involves the death of their son, Connor Vu. Plaintiffs allege that on September 28, 2007, Connor Vu, who was otherwise a healthy child, died after he was given Children's Tylenol Plus Multi-Symptom Cold medication ("medication") to treat a runny nose. At some point prior to giving Connor Vu the medication, plaintiffs allege that Melanie Vu, his mother, consulted with his pediatrician about giving the medication to her son, and his pediatrician approved such use. According to plaintiffs, this conversation occurred after the FDA had issued warnings not to use this or other similar cold medications on children under the age of two, in part because their active ingredients had been linked to numerous infant deaths prior to 2006. Connor Vu was just short of five months old when he died.

On December 22, 2008, defendant Costco removed the case to this Court under 28 U.S.C. § 1332, diversity jurisdiction. In its notice of removal, Costco contendsthat Keiko Shibata -- the only defendant who resides in California -- was fraudulently joined in this action. Costco then moved pursuant to 28 U.S.C. § 1404 to transfer the case to the Central District of California. While that motion was pending, plaintiffs moved to remand the case to the Superior Court in San Francisco County. Both motions are now before the Court.

DISCUSSION

The Court must determine whether or not it has subject-matter jurisdiction before considering whether the venue is proper. See Bookout v. Beck, 354 F.2d 823, 825 (9th Cir.1965) ("jurisdiction must be first found over the subject matter and the person before one reaches venue"); see also Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 94 (1998) ("Without jurisdiction the court cannot proceed at all in any cause. Jurisdiction is power to declare the law, and when it ceases to exist, the only function remaining to the court is that of announcing the fact and dismissing the cause." (quoting Ex parte McCardle, 74 U.S. (1 Wall.) 506, 514 (1868))).

I. Plaintiffs' Motion to Remand

Plaintiffs move to remand this case on the ground that there is no diversity jurisdiction, because Keiko Shibata, a sales representative for Ortho-McNeil Pharmaceutical, Inc., is a California resident and would defeat complete diversity. See Pls.' Mot. to Remand at 6-7; Shibata Decl. ¶¶ 1-2. Costco contends that removal is proper under the doctrine of fraudulent joinder because plaintiffs lack a cognizable claim against Shibata. The parties do not dispute, and the Court agrees, that there is complete diversity among the remaining defendants and that there is more than $75,000 in controversy. Thus, the only remaining issue is whether Shibata was fraudulently joined to defeat diversity.

A defendant can remove "any civil action brought in a State court of which the district courts of the United States have original jurisdiction ... to the district court of the United States for the district and division embracing the place where such action is pending." 28 U.S.C. § 1441(a). A district court has diversity jurisdiction over any civil action between citizens of different states as long as the amount in controversy exceeds $75,000, excluding interest and costs. 28 U.S.C. § 1332. If at any time before final judgment it appears that a district court lacks subject matter jurisdiction over a case that has been removed to federal court, the case must be remanded. 28 U.S.C. § 1447(c).

The party that seeks to remain in federal court has the burden of proof on a motion to remand to state court. See Conrad Assocs. v. Hartford Accident & Indem. Co., 994 F. Supp. 1196, 1198 (N.D. Cal. 1998). "The strong presumption against removal jurisdiction means that the defendant always has the burden of establishing that removal is proper." Emrich v. Touche Ross & Co., 846 F.2d 1190, 1195 (9th Cir. 1988) (citations omitted).

Fraudulent joinder is one exception to the requirement of complete diversity under 28 U.S.C. § 1332. Fraudulent joinder "is a term of art" used to describe a non-diverse defendant who has been joined to an action for the sole purpose of defeating diversity. McCabe v. Gen. Foods Corp., 811 F.2d 1336, 1339 (9th Cir. 1987). In order to prove fraudulent joinder, the defendant must prove that the plaintiff "fails to state a cause of action against a resident defendant, and the failure is obvious according to the settled rules of the state." Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir. 2001) (citing McCabe, 811 F.2d at 1339). "If there is a non-fanciful possibility that plaintiff can state a claim under California law against the non-diverse defendants the court must remand." Macey v. Allstate Prop. & Cas. Ins. Co., 220 F. Supp. 2d 1116, 1118 (N.D. Cal. 2002).

This Court must determine whether it is well-settled under California law that plaintiffs cannot state a claim against Shibata. Costco contends that plaintiffs fail to allege facts sufficient to state a claim for negligence against Shibata because Shibata never communicated directly with plaintiffs, nor did she market the drug at issue in this case -- Children's Tylenol Plus Multi-Symptom Cold -- to Connor Vu's physician. See Shibata Decl. ¶ 5. Shibata states that she only detailed Concerta -- a medication used to treat ADHD -- and Risperdal -- an antipsychotic medication -- to physicians in 2007. Id. ¶ 3. Additionally, Shibata states that the only over-the-counter medications she provided to physicians were Tylenol Infant Drops, Children's Motrin Suspension, and ...


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