|UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TENNESSEE AT KNOXVILLE
|CHRISTOPHER RYE and BRYAN RYE
individually and on behalf of the ESTATE
OF JAMES RYE,
ALZA CORPORATION and SANDOZ INC.,Defendants.
PLAINTIFFS’ REPLY TO DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTION FOR LEAVE TO FILE AMENDED COMPLAINT
COME NOW Christopher Rye and Bryan Rye, individually and on behalf of the estate of James Rye, and file this their Reply to Defendants Alza and Sandoz’ Opposition to Plaintiffs’ Motion for Leave to Amend Complaint and Remand to State Court and set forth as follows:
I. INTRODUCTION & SUMMARY
Defendants Alza Corporation and Sandoz, Inc. (collectively, the “Patch Defendants”) oppose Plaintiffs’ Motion for Leave to Amend Original Complaint adding Dr. Robert LaGrone and Center for Inflammatory Disease, P.C. d/b/a Tennessee Rheumatology (together the “Health Care Providers”). Plaintiffs’ motion should be granted. First, Plaintiffs’ will be significantly prejudiced if their motion is denied because they will be forced to assume the inconvenience and expense of parallel proceedings in state and federal court involving common questions of law and fact. Second, Plaintiffs will be prejudiced because they will suffer the risk of inconsistent verdicts as the Patch Defendants and Health Care Providers attribute fault to each other in an effort to evade liability. Third, the Patch Defendants will not be prejudiced by granting the motion for leave to amend and remanding the state court because they have no “right” to a federal forum in the absence of complete diversity. Fourth, all parties agree that the Plaintiffs’ have asserted viable claims against the Health Care Providers and the unsettled and nebulous doctrine of “fraudulent misjoinder” should not apply. Finally, even applying the doctrine of fraudulent misjoinder, Plaintiffs’ claims against the Patch Defendants and the Health Care Providers arise out of the same “transaction or occurrence” within the meaning of Fed. R. Civ. P. 20. For these reasons, set forth more fully below, the Court should grant Plaintiffs’ Motion to Amend adding the non-diverse Health Care Providers and remand the case to state court.
II. ARGUMENT & AUTHORITIES
A. Amendments to pleadings should be freely allowed.
“Motions to amend under Rule 15(a) may be filed to cure a defective pleading, to correct insufficiently stated claims, to amplify a previously alleged claim, to change the nature or theory of the case, to state additional claims, to increase the amount of damages sought, to elect different remedies, or to add, substitute or drop parties to the action.” Wausau Underwriters Ins. Co. v. Schifler, 190 F.R.D. 341, 343. (E.D. Pa. 1999) (citing CHARLES ALAN WRIGHT, ARTHUR R. MILLER, MARY KAY KANE, FEDERAL PRACTICE AND PROCEDURE: CIVIL 2D § 1474 (1990)); see also Goodman v. Mead Johnson & Co., 534 F.2d 566, 569 (3d Cir. 1976) (district court improperly denied amendment to add claims and substitute parties), cert. denied, 429 U.S. 1038(1977); Martin Herend Imports, Inc. v. Diamond and Gem Trading, 195 F.3d 765, 777 (5th Cir. 1999) (absent substantial reason, discretion of trial court not broad enough to support denial of motion to amend).
The decision on a motion to amend is within the sound discretion of the district court. Nonetheless, “the leave sought should, as the rules require, be ‘freely given.’” Foman v. Davis, 371 U.S. 178, 182 (1962). Absent “undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [or] futility of amendment,” the moving party should be allowed to test his claim on the merits. Id. Courts have interpreted Rule 15(a) “liberally, in line with the Federal Rules= overall goal of resolving disputes, insofar as possible, on the merits and in a single judicial proceeding.” Spartan Grain & Mill Co. v. Ayers, 517 F.2d 214, 220 (5th Cir. 1975); see also Hurn v. Retirement Fund Trust, 648 F.2d 1252, 1254 (9th Cir. 1981) (leave to amend should be freely given since “the purpose of pleadings is to facilitate a proper disposition on the merits”); Shipner v. Eastern Air Lines, 868 F.2d 401, 407 (11th Cir.) (The policy of Rule 15 “circumscribes the exercise of the district court’s discretion; unless a substantial reason exists to deny leave to amend, the discretion of the district court is not broad enough to permit denial”).
B. Plaintiffs Motion for Leave to Amend should be granted under 28 U.S.C. § 1447.
28 U.S.C. 1447(e) provides that “if after removal the Plaintiff seeks to join additional defendants who would destroy subject matter jurisdiction, the court may deny joinder, or permit joinder and remand the action to State court.” In this determination, the Court must balance the original defendant’s interest in maintaining a federal forum with the competing interest in not having parallel lawsuits. Hensgens v. Deere & Co., 833 F.2d 1179, 1182 (5th Cir. 1987). In Hensgens, the U.S. Court of Appeals for the Fifth Circuit identified four criteria to consider in balancing these competing interests (the Hensgens factors): (1) the extent to which the purpose of the amendment is to defeat federal jurisdiction; (2) whether the plaintiff has been dilatory in asking for the amendment; (3) whether Plaintiffs will be significantly injured if the amendment is not allowed; and (4) any other factors bearing on the equities. Id. at 1182. Defendants do not specifically allege that the Health Care Providers were added for the sole purpose of destroying diversity or that Plaintiffs were dilatory in seeking leave to amend. Rather, the Patch Defendants claim that Plaintiffs will not be significantly prejudiced if the amendment is disallowed. Alternatively, the Patch Defendants claim that they will suffer prejudice if the amendment is allowed and the case is remanded.
1. Plaintiffs will be prejudiced by a denial of their motion because it will force them to unnecessarily bear the time and expense of parallel proceedings and assume the risk of inconsistent verdicts.
Plaintiffs will be significantly prejudiced if they are not allowed to amend their complaint to add the Health Care Providers as Defendants because they will bear the additional expense and inconvenience of parallel federal and state court proceedings. Filing duplicate proceedings in state court would prove inefficient and be a waste of judicial resources since the Plaintiffs claim that the fault on the part of the Health Care Providers and the Patch Defendants jointly caused Plaintiffs’ damages. Considerations of cost, judicial efficiency, and possible inconsistent results militate in favor of not requiring Plaintiffs to prosecute two separate claims in two separate forums when both claims arise from the same set of facts. Plaintiffs allege that the Health Care Providers failed to properly prescribe the patch and that the Patch Defendants’ defective product administered a toxic dose of fentanyl to the decedent – both of which played a role in his pronounced respiratory depression and death. Accordingly, Plaintiffs’ theory of the case will raise issues of intervening causation, necessitating one trial about one series of occurrences ending in death, with all potentially responsible parties as defendants. This approach will be both more just and more economical than a series of trials against different defendants. Further, combining all claims and defendants in one case would present common questions of fact regarding the cause of Mr. Rye’s death and the resulting damages that might be awarded if liability is found, as well as common questions of law relating to damages. See Lyons v. Lutheran Hospital of Indiana, 2004 U.S. Dist. LEXIS 20255 at *5 (N.D. Ill. Sept. 15, 2004); see also Cashman v. Montefiore Medical Center, 191 B.R. 558, 562-63 (S.D.N.Y. 1996) (judicial economy did not weigh in favor of severance of third-party products liability claim from medical malpractice action stemming from silicone implants).
Additionally, Plaintiffs will be prejudiced by disallowance of the amendment because they will bear the risk of inconsistent verdicts. In a series of separate trials, each defendant can defend itself by blaming the absent party. In other words, the Patch Defendants may assert that the fentanyl patch was mis-prescribed and the Health Care Providers may claim that the decedent died from a defective product. Put another way, severance of the medical malpractice claims from the product liability claims would “permit each defendant in separate trials to defend itself by putting a proverbial ‘empty chair’ on trial, thus posing a significant risk of inconsistent verdicts that would all go against plaintiff.” Lyons, 2004 U.S. Dist. LEXIS 20255 *17, n. 3; see also In re Prempro Prods. Liab. Litig., 2007 U.S. Dist. LEXIS 20214 (E.D. Ark. 2007) (“These Defendants probably should not be separated because, when the time for apportioning fault comes, the drug manufacturers and the physicians may well blame each other.”); B.D. v. DeBuono, 193 F.R.D. 117, 126 (S.D.N.Y. 2000); Kirk v. Metro. Transp. Auth., 2001 U.S. Dist. LEXIS 85 (S.D.N.Y. Jan. 3, 2001) (courts generally abstain from severing claims where separate trials risk inconsistent jury verdicts).
The Patch Defendants cite to a collection of inapposite cases in support of their argument that Plaintiffs’ Motion for Leave should be denied. For instance, they rely on Denton v. Critikon, Inc., 137 F.R.D. 236 (M.D. La 1991), a case where the plaintiff filed a product liability action against the manufacturer of a defective intravenous catheter. After removal, the plaintiff in Denton filed a motion for leave to add a non-diverse hospital as a defendant. The Court denied plaintiff’s amendment reasoning that “[i]t is doubtful that the hospital is a joint tortfeasor with the original defendants under Louisiana law.” Id. at 237-38. By contrast, the Patch Defendants and Health Care Providers in the instant case are clearly “joint” tortfeasors in the sense that the Plaintiffs’ claims against each arise from the same series of occurrences that ultimately culminated in James Rye’s death. The Patch Defendants’ reliance on DeGidio v. Centocor, 2009 U.S. Dist. LEXIS 61412 (N.D. Ohio 2009), is similarly misplaced, as the plaintiff in that case did not allege that the non-diverse doctor prescribed or administered the offending medication to the injured party – a fact which the court found “particularly relevant in light of Ohio’s ‘learned intermediary’ statute.” Id. at *9. And in Miller v. Dow Corning Corp., 771 F.Supp. 1171 (M.D. La. 1990), a product liability case involving a defective knee-prosthesis, the Court denied the plaintiff’s amendment adding the treating doctor as a defendant on the grounds that the product manufacturer had completed a “substantial amount” of discovery in the federal forum and it would be unduly prejudicial to defendant to suddenly remand the case. Id. at 1172. In this case, Plaintiffs’ Original Complaint was filed in state court on October 20, 2009 and the case was removed to federal court on November 19, 2009. No discovery has occurred since the date of removal and the Patch Defendants have no similar grounds upon which they may claim to be prejudiced by a remand of the case to the state court in which it was originally filed.
A denial of Plaintiffs’ motion for leave to amend will force Plaintiffs to unnecessarily bear the time and expense of parallel proceedings in state and federal court. Additionally, denial would force Plaintiffs to assume the risk of inconsistent verdicts as each Defendant will try to evade liability by blaming the other for James Rye’s death. Plaintiffs will clearly be prejudiced by a denial of their motion adding the Health Care Providers to this action. For these reasons, set forth more fully above, Plaintiffs’ Motion for Leave to Amend Original Complaint and Remand Case to State Court should be granted.
2. The Health Care Providers Are Not Prejudiced by Allowance of the Amendment.
The Patch Defendants equivocally assert that they will be prejudiced if the case is remanded and they are “stripped of their right to a federal forum.” Def. Mot. at 6. But Defendants have no “right” to a federal forum in the absence of complete diversity. See Bank One, N.A. v. Brainard, 144 F. Supp. 2d 640, 2001 U.S. Dist. LEXIS 5699 (S.D. Miss. 2001) (“In this case…[Defendant] would have no “right” to a federal forum in the absence of diversity jurisdiction.) Since the Health Care Providers are proper defendants and are also necessary for complete and just adjudication of Plaintiffs’ claims, this Court does not have diversity jurisdiction and should remand this case to state court.
B. The Health Care Providers Are Properly Joined Under Fed. R. Civ. P. 20.
1. The Court Should Decline to Apply the “Fraudulent Misjoinder” Doctrine.
The Patch Defendants also contend that should the Court allow Plaintiffs’ amendment adding the prescribing doctor as a defendant, their claims would be “misjoined” under Fed. R. Civ. P. 20. According to this theory, the medical malpractice claims asserted against the Health Care Providers are improperly joined with the products-liability claims against the Patch Defendants because the medical malpractice claims are “factually and legally distinct” from the products-liability claims. Accordingly, the Patch Defendants argue, the claims against the Health Care Providers should be severed from the claims against the Patch Defendants, with the Court retaining jurisdiction over the products-liability claims but dismissing or remanding the medical malpractice claims. Courts have referred to this judicially-created doctrine as “fraudulent misjoinder.” See, e.g. Bird v. Carteret Mortg. Corp., 2007 U.S. Dist. LEXIS 24872, *7-13 (S.D. 2007) Asher v. 3M, 2005 U.S. Dist. LEXIS 42266, *27-37 (E.D. Ky. 2005); Osborn v. Metro. Life Ins. Co., 341 F. Supp. 2d 1123, 1127-29 (E.D. Cal. 2004). “Fraudulent joinder” of defendants addresses the viability of claims against a defendant. “‘Fraudulent misjoinder,’ on the other hand, addresses the joinder of the claims rather than their viability.” Asher, 2005 U.S. Dist. LEXIS 42266, at *28.
The fraudulent misjoinder doctrine was first articulated by the Eleventh Circuit in Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353, 1360 (11th Cir. 1996). Fraudulent misjoinder occurs when a plaintiff attempts to defeat removal by “misjoining” the unrelated (but viable) claims of non-diverse party plaintiffs against a defendant. In other words, “[w]ith fraudulent misjoinder, the charge is that the joined claims are unrelated and have been improperly joined in one action to destroy diversity.” Asher, 2005 U.S. Dist. LEXIS 42266, at *28. As noted by the Defendants, the Sixth Circuit has not adopted or even addressed the doctrine. Bird, 2007 U.S. Dist. LEXIS 24872 at *7; Asher, 2005 U.S. Dist. LEXIS 42266, at *28. Consequently, the federal district courts within the Sixth Circuit addressing a fraudulent misjoinder argument have reached divergent conclusions on whether (and how) to apply the doctrine. Compare Bird, 2007 U.S. Dist. LEXIS 24872, at *12 (“In this Court’s view, the cases declining to adopt the fraudulent misjoinder rule are the better reasoned and are more consistent with the oft-repeated maxim that removal jurisdiction is to be strictly construed, and all doubts about the propriety of removal are to be resolved in favor of remand.”) (citing Coyne v. American Tobacco Co., 183 F.3d 488, 493 (6th Cir. 1999)), with Asher, 2005 U.S. Dist. LEXIS 42266, at *37-38 (applying the Tapscott holding and explaining that “[t]he Court agrees with those courts that have applied the same rationale to fraudulent misjoinder as to fraudulent joinder and have held that something more than ‘mere misjoinder’ is required before this Court may take the extraordinary step of exercising jurisdiction over an action where jurisdiction is lacking on the face of the complaint”), and Adams v. 3M, No. 6:04-521-DCR, 2005 U.S. Dist. LEXIS 27404, *22 (E.D. Ky. Jan. 27, 2005) (conducting a fraudulent misjoinder analysis, and finding that the court need not make a finding that plaintiffs’ joinder conduct was “egregious” under Tapscott). Various federal district courts around the country have likewise reached divergent conclusions on the doctrine’s applicability.
Without controlling Sixth Circuit authority and in light of the Sixth Circuit’s well-settled rule that removal jurisdiction should be “strictly construed” and all doubts about the propriety of removal resolved in favor of remand, the Court in Geffen v. General Electric Company, 575 F. Supp. 2d 865 (N.D. Ohio 2008), declined to adopt the “fraudulent misjoinder” doctrine:
Conducting fraudulent misjoinder analysis in this case necessarily requires the Court to wade into a thorny thicket of unsettled law; disagreements exist as to numerous questions about the doctrine, and the last thing the federal courts need is more procedural complexity. Whether to apply the doctrine in the first place, whether the doctrine requires egregious misjoinder or some other level of bad faith before it can be invoked, whether to apply state or federal joinder law, and whether a federal court should be deciding issues of state joinder law in the first instance are among the unresolved inquiries the Court declines to decide here.
Geffen, 575 F. Supp. 2d at 871 (internal quotation marks and citation omitted). See also Livingston v. Hoffmann-La Roche, Inc., 2009 U.S. Dist. LEXIS 70242, (N.D. Ill. 2009) (declining to adopt the doctrine of “fraudulent misjoinder”).
Without direction from the Sixth Circuit, and in light of the rule of strict construction of the removal statute coupled with a significantly unsettled landscape surrounding application of the doctrine in federal courts, this Court should also decline to adopt a doctrine that will further complicate the question of removal and federal jurisdiction. Absent the fraudulent misjoinder doctrine, the Court is left merely with a complaint that includes Plaintiffs and Defendants that are both citizens of Tennessee, thus destroying diversity and, as a result, depriving this Court of subject matter jurisdiction.
2. Even applying the doctrine of fraudulent misjoinder, Plaintiffs’ claims against the Healthcare Defendants arise out of the same “transaction or occurrence” within the meaning of Fed. R. Civ. P. 20.
Even if the Court were to apply the doctrine of “fraudulent misjoinder,” it should still permit Plaintiffs to amend their Complaint adding the Health Care Providers. According to the Patch Defendants, Plaintiffs’ claims against them are “wholly unrelated,” “involve distinct legal standards” and are “not part of the same ‘transaction or occurrence’ [nor] share common issues of law or fact as required under Rule 20.” Def. Mot. at 9. Again, Defendants cite to an array of cases in support of their position, some of which are analogous and some of which are not. Regardless, the best reasoned line of authority in similar cases – namely, cases where plaintiffs simultaneously assert strict product liability claims against prescription drug manufacturers and medical malpractice claims against prescribing physicians – recognize that such claims are factually interrelated. See, eg. Melton v. Merck & Co., Inc., 2006 U.S. Dist. LEXIS 37376, *2 (E.D. Ky. 2006) (granting motion for remand where plaintiff brought claims against diverse manufacturers of various prescription medications and non-diverse healthcare providers who prescribed the medications); see also Alegre v. Aguayo, 2007 U.S. Dist. LEXIS 3266, *5 n.1 (N.D. Ill. 2007) (“Vioxx’s alleged failure to disclose the dangers of Vioxx and Dr. Aguayo’s alleged prescription of an excessive amount of the drug are closely related in that they are the two factors that led to the ingestion of the Vioxx that [plaintiff] claims caused his heart attack. [And] the transmittal of information from Merck…to Dr. Aguayo…to [plaintiff] proves another common series of transactions and a question of fact common to the defendants.”); In re Prempro Prods. Liab. Litig., 2007 U.S. Dist. LEXIS 20214 (E.D. Ark. 2007) (“Plaintiff asserts that Dr. Liu was the prescribing physician. These Defendants probably should not be separated because when the time for apportioning fault comes, the drug manufacturers and the physicians may well blame each other.”); Jamison v. Purdue Pharma Co., 251 F. Supp. 2d 1315 (S.D. Miss. 2003) (“In the instant case, the factual nexus that connects all the parties is the drug Oxycontin…[o]bviously, the resolution of this claim for or against the pharmaceutical defendants could have an effect on the liability of the pharmacies and [the prescribing physician]…. For the foregoing reasons, the Court finds that [the prescribing physician] has been properly joined.”)
Courts have also recognized that such cases are interrelated legally, especially (as noted by the Centocor Court, supra) in light of the often invoked “learned intermediary” defense of strict liability claims for failure to warn, where the manufacturer’s duty to warn of known dangers is owed to the physician, not the patient. The Patch Defendants have raised this defense in every wrongful death case involving defective fentanyl patches where the plaintiff has asserted failure to warn claims, and there is no reason to believe they will not do so in this case given Plaintiffs’ allegations. In light of such defense, the assertion that the Plaintiffs’ claims against the Patch Defendants are legally distinct from those alleged against the Health Care Providers is frivolous. As explained by the court in Ohler v. Purdue Pharma, L.P., 2002 U.S. Dist. LEXIS 2368 (E.D. La. 2002):
Plaintiffs’ claims include that his physician over-treated and over-prescribed controlled drug pain medications, while failing to monitor, to warn, and to protect petitioner from addiction and other serious risks attending the use of such pain medications, including OxyContin, inter alia. That these allegations clash with allegations against Purdue-Abbott is of no moment. At some point in the proceedings, some form of the “the learned intermediary doctrine” will surface; it is a veritable certainty considering the “failure to warn” allegations against the drug manufacturers. That doctrine, which invariably arises in context of failure to warn cases involving both the prescription drug manufacturers and the treating/prescribing physician as party defendants, dismembers any misjoinder argument.
Ohler, 2002 U.S. Dist. LEXIS at *24.
Indeed, most courts that have thoroughly considered this issue have reached the conclusion that a negligence claim against a physician who prescribed a drug and a product liability claim against the manufacturer of the drug arise out of the “same transaction or occurrence” within the meaning of Rule 20. See, e.g. Rice v. Pfizer, Inc., 2006 U.S. Dist. LEXIS 84314 (N.D. Tex. 2006); Moote v. Eli Lilly and Co., 2006 U.S. Dist. LEXIS 92357 (S.D. Tex. 2006); Jamison v. Purdue Pharma Co., 251 F. Supp. 2d 1315 (S.D. Miss. 2003); Greene v. Novartis Pharms. Corp., 2007 U.S. Dist. LEXIS 84082 (M.D. Ga. 2007); Galati v. Eli Lilly & Co., 2005 U.S. Dist. LEXIS 39068 (W.D. Mo. 2005); Flores v. Merck & Co. (In re Fosamax Prods. Liab. Litig.), 2008 U.S. Dist. LEXIS 57473 (S.D.N.Y. 2008). This case involves facts identical to the facts in the above-referenced cases, and the same reasoning applies. Plaintiffs have asserted a product liability claim against the Patch Defendants for designing, manufacturing and marketing a dangerous drug and a medical malpractice claim against the Health Care Providers for prescribing that drug. Clearly, the product liability and medical negligence claims arise from the same transaction or occurrence. Plaintiffs’ claims involve the same injury caused by the same drug, and the resolution of the claim against the Patch Defendants could affect the liability of the Health Care Providers because of the learned intermediary defense – a defense that the Patch Defendants will most certainly invoke. For these reasons, the Court should grant the Plaintiffs’ Motion for Leave adding the Health Care Providers and remand the case for lack of diversity jurisdiction.
The Court should grant Plaintiffs’ Motion for Leave and remand to state court. Plaintiffs will be prejudiced if their motion is denied because they will be forced to assume the inconvenience and expense of parallel proceedings in state and federal court and because Plaintiffs will suffer the risk of inconsistent verdicts. Moreover, the Plaintiffs have asserted viable claims against the Health Care Providers and the Court should decline to adopt the doctrine of “fraudulent misjoinder.” Nonetheless, even if the doctrine of fraudulent misjoinder does apply, the amendment adding the Health Care Providers is proper because Plaintiffs’ claims arise out of the same “transaction or occurrence” as the claims against the Patch Defendants. For the foregoing reasons, Plaintiffs’ Motion for Leave to File Amended Petition should be granted. In light of the amendment adding the non-diverse defendants, the Court does not have diversity jurisdiction and it should remand the case to state court.
WHEREFORE, PREMISES CONSIDERED, Plaintiffs respectfully pray that the Court grant their Motion for Leave to File Amended Complaint, file instanter Plaintiffs’ First Amended Complaint (attached as Exhibit “D” to Plaintiffs’ Motion for Leave to Amend), remand the case to the District Court of Davidson County, Tennessee, 20th Judicial District, and grant Plaintiffs such other and further relief in law or in equity to which they may show themselves justly entitled.
James Craig Orr, Jr.
Texas Bar No. 15313550
Michael E. Heygood
State Bar No. 00784267
Eric D. Pearson
State Bar No. 15690472
Charles W. Miller
Texas Bar No. 24007677
Heygood, Orr & Pearson
2331 W. Northwest Highway, 2nd Floor
Dallas, TX 75220
ATTORNEY FOR PLAINTIFF