Shannon Muller et al v. American Medical Systems Inc et al
Filing
12
MINUTES OF IN CHAMBERS - COURT ORDER by Judge Percy Anderson: Defendants have failed to carry their heavy burden of persuasion to demonstrate that the plaintiffs were fraudulently joined. Thus, defendants have not met their burden to establish comple te diversity of citizenship between the parties. Accordingly, the Court remands this action to the Los Angeles County Superior Court, Case No. BC515042, for lack of federal subject matter jurisdiction. ( Case Terminated. Made JS-6 ) Court Reporter: Not Reported. (Attachments: # 1 CV-103 Remand Transmittal Letter) (gk)
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JS-6
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.
CV 13-6276 PA (RZx)
Title
Shannon Muller, et al. v. American Medical Systems, et al.
Present: The
Honorable
Date
August 29, 2013
PERCY ANDERSON, UNITED STATES DISTRICT JUDGE
Paul Songco
Not Reported
N/A
Deputy Clerk
Court Reporter
Tape No.
Attorneys Present for Plaintiffs:
Attorneys Present for Defendants:
None
None
Proceedings:
IN CHAMBERS - COURT ORDER
Before the Court is a Notice of Removal filed by defendants American Medical Systems, Inc.,
American Medical Systems Holdings, Inc., Endo Pharmaceuticals, Inc., and Endo Health Solutions, Inc.
(“Defendants”). Defendants assert that this Court has jurisdiction over the action brought against them
by plaintiffs Shannon Muller, et al. (“Plaintiffs”) based on the Court’s diversity jurisdiction. See 28
U.S.C. § 1332.
Federal courts are courts of limited jurisdiction, having subject matter jurisdiction only over
matters authorized by the Constitution and Congress. See, e.g., Kokkonen v. Guardian Life Ins. Co.,
511 U.S. 375, 377, 114 S. Ct. 1673, 1675, 128 L. Ed. 2d 391 (1994). A suit filed in state court may be
removed to federal court if the federal court would have had original jurisdiction over the suit. 28
U.S.C. § 1441(a). A removed action must be remanded to state court if the federal court lacks subject
matter jurisdiction. 28 U.S.C. § 1447(c). “The burden of establishing federal jurisdiction is on the party
seeking removal, and the removal statute is strictly construed against removal jurisdiction.” Prize Frize,
Inc. v. Matrix (U.S.) Inc., 167 F.3d 1261, 1265 (9th Cir. 1999). “Federal jurisdiction must be rejected if
there is any doubt as to the right of removal in the first instance.” Gaus v. Miles, Inc., 980 F.2d 564,
566 (9th Cir. 1992).
In attempting to invoke this Court’s diversity jurisdiction, Defendants must prove that there is
complete diversity of citizenship between the parties and that the amount in controversy exceeds
$75,000. 28 U.S.C. § 1332. To establish citizenship for diversity purposes, a natural person must be a
citizen of the United States and be domiciled in a particular state. Kantor v. Wellesley Galleries, Ltd.,
704 F.2d 1088, 1090 (9th Cir. 1983). Persons are domiciled in the places they reside with the intent to
remain or to which they intend to return. See Kanter v. Warner-Lambert Co., 265 F.3d 853, 857 (9th
Cir. 2001). “A person residing in a given state is not necessarily domiciled there, and thus is not
necessarily a citizen of that state.” Id. For the purposes of diversity jurisdiction, a corporation is a
citizen of any state where it is incorporated and of the state where it has its principal place of business.
28 U.S.C. § 1332(c); see also Indus. Tectonics, Inc. v. Aero Alloy, 912 F.2d 1090, 1092 (9th Cir. 1990).
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JS-6
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.
CV 13-6276 PA (RZx)
Date
Title
August 29, 2013
Shannon Muller, et al. v. American Medical Systems, et al.
The sixty-six (66) plaintiffs in this action allege injuries from the surgical implantation of one or
more AMS pelvic surgical mesh devices. For purposes of diversity, Plaintiffs are citizens of
Massachusetts, Ohio, Virginia, California, Indiana, New Jersey, New Mexico, Texas, Georgia, Alabama,
Kentucky, Tennessee, Utah, West Virginia, Florida, and Louisiana; Plaintiff Redethia Davis is a citizen
of Delaware and Plaintiff Patricia Zeiber is a citizen of Pennsylvania; American Medical Systems, Inc.
is a citizen of Delaware and Minnesota; American Medical Systems Holdings, Inc. is a citizen of
Delaware and Minnesota; Endo Pharmaceuticals, Inc. is a citizen of Delaware and Pennsylvania; and
Endo Health Solutions, Inc. is a citizen of Delaware and Pennsylvania.
The Ninth Circuit has recognized an exception to the complete diversity requirement where a
non-diverse defendant has been “fraudulently joined.” Morris v. Princess Cruises, Inc., 236 F.3d 1061,
1067 (9th Cir. 2001). If a 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, the joinder of the resident defendant is
fraudulent.” McCabe v. Gen. Foods Corp., 811 F.2d 1336, 1339 (9th Cir. 1987). If the Court finds that
the joinder of a non-diverse defendant is fraudulent, that defendant’s presence in the lawsuit is ignored
for the purposes of determining diversity. See, e.g., Morris, 236 F.3d at 1067.
“There is a presumption against finding fraudulent joinder, and defendants who assert that
plaintiff has fraudulently joined a party carry a heavy burden of persuasion.” Plute v. Roadway Package
Sys., Inc., 141 F. Supp. 2d 1005, 1008 (N.D. Cal. 2001). A claim of fraudulent joinder should be denied
if there is any possibility that the plaintiff may prevail on the cause of action against the in-state
defendant. See id. at 1008, 1012. “The standard is not whether plaintiffs will actually or even probably
prevail on the merits, but whether there is a possibility that they may do so.” Lieberman v. Meshkin,
Mazandarani, 1996 WL 732506, at *3 (N.D. Cal. Dec. 11, 1996). A court should remand a case “unless
the defendant shows that the plaintiff ‘would not be afforded leave to amend his complaint to cure [the]
purported deficiency.’” Padilla v. AT&T Corp., 697 F. Supp. 2d 1156, 1159 (C.D. Cal. 2009) (quoting
Burris v. AT&T Wireless, Inc., 2006 WL 2038040, at *2 (N.D. Cal. July 19, 2006)).
Here, Defendants argue that the citizenship of two plaintiffs, Redethia Davis and Patricia Zeiber,
should be ignored for diversity purposes based on fraudulent misjoinder. In order for Plaintiffs to join
their claims into a single action, the claims must (1) arise out of “the same transaction, occurrence, or
series of transactions or occurrences;” and (2) contain “any question of law or fact common to all”
plaintiffs. Fed. R. Civ. P. 20(a). Defendants cite Eleventh and Fifth Circuit cases in support of the
doctrine of fraudulent misjoinder. “Misjoinder may be just as fraudulent as the joinder of a resident
defendant against whom a plaintiff has no possibility of a cause of action.” Tapscott v. MS Dealer Serv.
Corp., 77 F.3d 1353, 1360 (11th Cir. Ala. 1996), abrogated on other grounds, Cohen v. Office Depot,
Inc., 204 F.3d 1069 (11th Cir. 2000); accord In re Benjamin Moore & Co., 318 F.3d 626, 630-31 (5th
Cir. 2002) (recognizing that misjoinder of plaintiffs should not be allowed to “circumvent diversity
jurisdiction”). The Eleventh Circuit further stated, “[w]e do not hold that mere misjoinder is fraudulent
joinder, but we do agree with the district court that Appellants’ attempt to join these parties is so
egregious as to constitute fraudulent joinder.” Tapscott, 77 F.3d at 1360. However, other than the
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CIVIL MINUTES - GENERAL
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JS-6
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.
CV 13-6276 PA (RZx)
Date
Title
August 29, 2013
Shannon Muller, et al. v. American Medical Systems, et al.
Eleventh and Fifth Circuits, no other circuit court has adopted the fraudulent misjoinder doctrine; the
Ninth Circuit has not expressly adopted it. See Caouette v. Bristol-Myers Squibb Co., 2012 U.S. Dist.
LEXIS 113980, 28-33 (N.D. Cal. Aug. 10, 2012).
Several district courts “have criticized Tapscott, arguing that questions of joinder under state law
do not implicate federal subject matter jurisdiction, federal jurisdiction is to be narrowly construed, and
the fraudulent misjoinder doctrine has created an unpredictable and complex jurisdictional rule.” In re
Prempro Prods. Liab. Litig., 591 F.3d 613, 621-22 (8th Cir. 2010) (citing cases); see also In re Yasmin
& Yaz Mktg., Sales Pracs. & Prods. Liab. Litig., 779 F. Supp. 2d 846, 854-55 (S.D. Ill. 2011) (citing
cases). “Many of these courts also opine that the better approach is for parties to seek severance in state
court prior to removal.” Id. at 855; see also Caouette, 2012 U.S. Dist. LEXIS at 28-33.
Even if the Court were to adopt the doctrine of fraudulent misjoinder and conclude that
plaintiffs’ claims are not properly joined in this action, it is not clear that the joinder is egregious or
grossly improper. See Tapscott, 77 F.3d at 1360; Prempro, 591 F.3d at 622-24 (“absent evidence that
plaintiffs’ misjoinder borders on a ‘sham,’ [the Court] decline[s] to apply Tapscott to the instant case”).
Defendants have failed to carry their heavy burden of persuasion to demonstrate that the plaintiffs were
fraudulently joined. Thus, defendants have not met their burden to establish complete diversity of
citizenship between the parties. Accordingly, the Court remands this action to the Los Angeles County
Superior Court, Case No. BC515042, for lack of federal subject matter jurisdiction. See 28 U.S.C. §
1447(c).
IT IS SO ORDERED.
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