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Andrews v. Bayer Corp.

January 12, 2010

SUDRIA ANDREWS, PLAINTIFF,
v.
BAYER CORPORATION, BAYER HEALTHCARE PHARMACEUTICALS INC.; BAYER HEALTHCARE, LLC; MCKESSON CORPORATION CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Dean D. Pregerson United States District Judge

ORDER GRANTING PLAINTIFF'S MOTION TO REMAND AND DENYING AS MOOT DEFENDANTS' MOTION TO STAY

[Motions filed on December 8, 2009 and December 17, 2009]

This matter comes before the Court on (1) a Motion to Stay Proceedings Pending Transfer by the Judicial Panel on Multidistrict Litigation to MDL 2100 filed by the defendants Bayer Corporation, Bayer Healthcare LLC, and Bayer Healthcare Pharmaceuticals, Inc. (the "Bayer Defendants") and (2) a Motion to Remand filed by the plaintiff Sudria Andrews ("Plaintiff"). Having reviewed the papers submitted by the parties, the Court GRANTS the motion to remand, DENIES as moot the motion to stay, and adopts the following Order.

I. BACKGROUND

Plaintiff filed suit in Los Angeles Superior Court on October 31, 2007, alleging that she suffered a pulmonary embolism as a proximate result of ingesting Yasmin, an oral contraceptive created and produced for public consumption by the Bayer Defendants and distributed by McKesson Corporation ("McKesson"). (Compl. ¶¶ 4-18.) Plaintiff is a California citizen who resides in Los Angeles County. (Id. ¶ 3.) None of the Bayer Defendants is a citizen of California for purposes of diversity jurisdiction.*fn1 (Notice of Removal ¶ 8.) McKesson is a Delaware corporation with its principal place of business in California. (Id. ¶ 9.) On November 25, 2009, the Bayer Defendants removed to this Court, arguing that McKesson was fraudulently joined in order to defeat removal and that its citizenship should therefore be disregarded for purposes of diversity jurisdiction. (Id. ¶ 16.)

On October 1, 2009, the Judicial Panel on Multidistrict Litigation established MDL No. 2100, In re Yasmin and Yaz (Drospirenone) Marketing, Sales Practices and Products Liability Litigation. The Bayer Defendants identified this action as a potential "tag-along" to MDL No. 2100, and a conditional transfer order was filed on December 17, 2009. Plaintiff filed an opposition to the conditional transfer order on January 4, 2010.

On December 8, 2009, the Bayer Defendants filed a motion to stay all proceedings in this action and to vacate all existing dates and deadlines pending transfer of this action to MDL No. 2100. On December 17, 2009, Plaintiff filed a motion to remand, arguing that there is no diversity jurisdiction because McKesson, a properly joined defendant, is a California corporation.

II. DISCUSSION

"[F]ederal courts normally must resolve questions of subject matter jurisdiction before reaching other threshold issues." Potter v. Hughes, 546 F.3d 1051, 1061 (9th Cir. 2008). The Supreme Court has held that "engaging subject-matter jurisdiction at the outset of a case is often the most efficient way of going," and that in removal actions "both expedition and sensitivity to state courts' coequal stature should impel the federal court to dispose of that issue first." Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 587-88 (1999) (internal quotation marks and citation omitted). The Court therefore addresses the motion to remand prior to the motion to stay.*fn2

A. Legal Standard

A defendant who seeks to remove a case from state to federal court has the burden of establishing federal subject matter jurisdiction. Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97 (1921). Furthermore, courts "strictly construe the removal statute against removal jurisdiction." Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). Removal is governed by substantive and procedural requirements. Pursuant to 28 U.S.C. § 1441(a), an action brought in state court may be removed to federal court if the civil action is one "of which the district courts of the United States have original jurisdiction."

Section 1332 provides that district courts have original jurisdiction "of all civil actions where the matter in controversy exceeds the sum of value of $75,000, exclusive of interest and costs and is between citizens of different States." 28 U.S.C. § 1332(a)(1). Complete diversity of citizenship is required, meaning each of the plaintiffs must be a citizen of a different state than each of the defendants. Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996).

Nevertheless, "one exception to the requirement of complete diversity is where a non-diverse defendant has been 'fraudulently joined.'" Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir. 2001). "Fraudulently joined defendants will not defeat removal on diversity grounds." Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1318 (9th Cir. 1998). "[T]here is a general presumption against fraudulent joinder," Hamilton Materials, Inc. v. Dow Chemical Corp., 494 F.3d 1203, 1206 (9th Cir. 2007), but fraudulent joinder will be found "[i]f the plaintiff fails to state a cause of action against a resident defendant, and the failure is obvious according to settled rules of the state." Ritchey, 139 F.3d at 1318.

The party asserting fraudulent joinder bears the burden of proof, United Computer Systems, Inc. v. AT&T Corp., 298 F.3d 756, 763 (9th Cir. 2002), and remand must be granted unless the defendant establishes that there is no possibility that the plaintiff could prevail on any cause of action it asserted against the non-diverse defendant. See Levine ...


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