In Re: Karen Briscoe ( 2006 )

Opinions of the United
2006 Decisions States Court of Appeals
for the Third Circuit
5-15-2006
In Re: Karen Briscoe
Precedential or Non-Precedential: Precedential
Docket No. 04-4086
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2006
Recommended Citation
"In Re: Karen Briscoe " (2006). 2006 Decisions. Paper 1001.
http://digitalcommons.law.villanova.edu/thirdcircuit_2006/1001
This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova
University School of Law Digital Repository. It has been accepted for inclusion in 2006 Decisions by an authorized administrator of Villanova
University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.
PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 04-4086
IN RE: KAREN A. BRISCOE, et al.; ALFRED LARA, et al.;
WANDA T. KIZER, et al.*; DEBRA ALEXANDER, et al.;
RHONDA ALLEN, et al.; MARY GREEN, et al.;
GLENDA D. ABBOTT, et al.; and LESLIE BALES, et al.,
Petitioners
On Petition for a Writ of Mandamus
to the United States District Court
for the Eastern District of Pennsylvania
(Related to MDL-1203 & 99-cv-20593)
District Judge: Honorable Harvey Bartle, III
Argued December 13, 2005
Before: SLOVITER, SMITH and STAPLETON,
Circuit Judges.
(Filed May 15, 2006)
Sylvia Davidow
Fleming & Associates
Houston, TX 77056
_____________________
*Petitioners Wanda T. Kizer, et al., were dismissed as parties to
the petition for writ of mandamus pursuant to the Court’s Order
dated July 11, 2005.
Thomas C. Goldstein (Argued)
Goldstein & Howe
Washington, DC 20016
Jonathan S. Massey (Argued)
Bethesda, MD 20817
Attorneys for Petitioners Karen Briscoe, et al., Alfred
Lara, et al., Debra Alexander, et al., Rhonda Allen, et al.,
Mary Green, et al., Glenda D. Abbott, et al. and Leslie
Bales, et al.
Fred S. Longer
Arnold Levin
Michael D. Fishbein
Levin, Fishbein, Sedran & Berman
Philadelphia, PA l9l06
Attorneys for Respondents Plaintiffs’ Management
Committee and Plaintiffs’ Class
Mary H. Smith
Smith & Smith
Houston, TX 77056-7133
Attorney for Respondents George O. Crisp, M.D.,
Jacqueline C. Hubbard, M.D., Frank Morehead, M.D.,
James Vosberg, M.D. and Brent Wallace, M.D.
Russell G. Thornton
Stinnett Thiebaud & Remington
Dallas, TX 75202
Attorney for Respondent Stinnett Thiebaud & Remington
Physicians
Nancy N. Morrison
Naman, Howell, Smith & Lee
2
Waco, TX 76703
Attorney for Respondents J. E. Madsen, M.D., James
Weinblatt, M.D. and Morey Price, M.D.
Jay H. Henderson
Cruse, Scott, Henderson & Allen
Houston, TX 77019
Attorney for Respondent Cruse, Scott, Henderson &
Allen Physicians
Nik A. Mimari
Patterson & Wagner
San Antonio, TX 78229
Attorney for Respondents Michael Hesitand, M.D. and
Carmen Llauger-Meir, M.D.
Joseph M. Dunn
Evans & Rowe
San Antonio, TX 78216
Attorney for Respondents Beau Meyer, M.D. and Sylvia
Adams, M.D.
Ann P. Watson
Lara M. Price
Sheehy, Serpe & Ware
Houston, TX 77010
Attorneys for Respondent Sheehy, Serpe & Ware
Physicians
Douglas E. Markham
Callaway & Brenning
Houston, TX 77002
Attorney for Respondent Esther G. Cruz, D.O.
John R. Robinson
3
Johnson & Sylvan
Dallas, TX 75270
Attorney for Respondent Johnson & Sylvan Physicians
C. Timothy Reynolds
Steed Flagg
Rockwall, TX 75032
Attorney for Respondent Tyson H. Barnes, Jr., M.D.
Robert D. Rosenbaum (Argued)
Arnold & Porter
Washington, D.C. 20004
Michael T. Scott
Paul B. Kerrigan
Milind M. Shah
Reed Smith
Philadelphia, PA 19103-7301
Peter L. Zimroth
Arnold & Porter
New York, NY 10022-4690
Attorneys for Respondent Wyeth Corp. f/k/a American
Home Products Corporation
Mark A. Keene (Argued)
Davis & Davis
Austin, TX 78759
Attorneys for Respondent Stella Kwong, M.D.
Philip A. Sellers
Karotkin, Chase & Erwin
Houston, TX 77027
Attorney for Respondents James Saxton, M.D., Raymond
Neuman, M.D., Cornelia L. Agent, M.D. and Robert
4
Carroll, M.D.
Matthew W. Bobo
Broome, Bobo & Greene
Irving, TX 75039
Attorney for Nancy Scheinost
Michael L. O’Brien
Houston, TX 77056
Attorney for Amicus-Petitioner Opt-Out Plaintiffs’
Counsel (O’Brien Group)
Bryan F. Aylstock
Aylstock, Witkin & Sasser
Pensacola, FL 32504
Attorney for Amicus-Petitioner Opt-Out Plaintiffs’
Counsel (Aylstock Group)
John E. Williams, Jr.
Williams Bailey Law Firm
Houston, TX 77017-5001
Attorney for Amicus-Petitioner Williams Bailey Law
Firm, LLP
Whitman B. Johnson, III
Currie, Johnson, Griffin, Gaines & Myers
Jackson, MS 39205
Attorney for Amici-Respondents Alphonse M. Reed,
M.D., et al.
Honorable Harvey Bartle, III,
Nominal Respondent
5
OPINION OF THE COURT
SLOVITER, Circuit Judge.
At issue in this case is the disposition of more than 14,000
actions filed by some 30,000 to 35,000 plaintiffs pending before
the United States District Court for the Eastern District of
Pennsylvania as part of the Multidistrict Diet Drug Product
Liability Litigation, MDL-1203. Petitioners are 450 plaintiffs
who originally filed their suits in Texas state courts. Defendant
Wyeth removed the suits to the Texas federal district courts on
the basis of diversity jurisdiction, even though petitioners had
also named non-diverse parties as defendants. According to
Wyeth, removal was proper because the additional defendants
were named solely as a means to defeat federal jurisdiction.
After the actions were transferred to the docket of MDL-1203,
petitioners moved for a remand to state court. The District Court
held that the non-diverse defendants were “fraudulently joined”
because it determined that the claims against them are clearly
time-barred under the governing Texas statute of limitations. It
therefore dismissed all defendants except Wyeth, held that it has
diversity jurisdiction, and denied the motions to remand.
Claiming that the District Court committed a clear error of law,
petitioners seek a writ of mandamus and ask that we direct the
District Court to remand their cases to state court.1
I.
This court has previously set forth various facets of the
background to MDL-1203 and its class action settlement
agreement. See In re Diet Drugs, 401 F.3d 143, 147-48 (3d Cir.
2005) (dismissing appeals for want of jurisdiction and denying
mandamus petition for review of award and allocation of interim
1
In a separate opinion filed today, we address an alternative
mandamus request by these same petitioners as well as additional
diet-drug plaintiffs for a return of their cases to the federal district
courts from which they were transferred to MDL-1203. See In re
Wilson, C.A. No. 05-4040, __ F.3d __ (3d Cir. 2006).
6
award of attorney’s fees); In re Diet Drugs, 385 F.3d 386,
389-93 (3d Cir. 2004) (affirming approval of Sixth Amendment
to the settlement agreement); In re Diet Drugs, 369 F.3d 293,
299 (3d Cir. 2004) (addressing District Court’s injunction
limiting scope of proceedings in state court); In re Diet Drugs,
282 F.3d 220, 225-29 (3d Cir. 2002) (addressing injunction
against mass opt out from settlement agreement). We limit our
discussion here to the facts pertinent to the present mandamus
request.
On September 15, 1997, respondent Wyeth (then known
as American Home Products Corporation) withdrew from sale
on the United States market its widely prescribed appetite
suppressants, or “diet drugs,” known as fenfluramine
(“Pondimin”) and dexfenfluramine (“Redux”). Approximately
six million people in the United States had taken one or both of
the diet drugs prior to the withdrawal. Subsequent studies have
linked ingestion of the diet drugs to valvular heart damage
(“VHD”), including a condition known as heart-valve
regurgitation (the reverse flow of blood through a closed heart
valve). After the diet drugs were withdrawn, approximately
18,000 lawsuits were filed against Wyeth in state and federal
courts nationwide. In December 1997, the Judicial Panel for
Multidistrict Litigation (“JPML”) consolidated the pending
federal cases for coordinated pre-trial proceedings and
transferred them as MDL-1203 to the docket of then District
Judge Louis C. Bechtle in the United States District Court for
the Eastern District of Pennsylvania.2
In November 1999, Wyeth and representatives of the state
and federal court plaintiffs executed a Nationwide Class Action
Settlement Agreement (“Settlement Agreement”). The proposed
class included all persons in the United States, including their
representatives and dependents, who had ingested either or both
of the diet drugs. Judge Bechtle granted provisional approval to
the Settlement Agreement and initiated a wide-reaching
2
Judge Bechtle has since retired from his position as a
federal judge.
7
notification program to alert all potential class members. The
notice program had two essential parts:
The first part of the notice program was designed to make
class members aware of the potential risks posed by
Pondimin and Redux, of the legal rights arising from the
use of those drugs, of the proposed nationwide class
action settlement which would resolve such claims and of
their opportunity to opt out or object to the Settlement. In
addition, the first part of the notice program was designed
to inform class members of the opportunity to obtain a
court authorized “notice package” describing their legal
rights in relation to the settlement by registering to
receive the notice package through a 1-800 number
(1-800-386-2070) or through the world wide web
(www.settlementdietdrugs.com). The second part of the
notice program was to provide a detailed “notice
package” to each person who had registered through the
1-800 number or web site and to all other class members
whose names and addresses were known to the parties.
In re Diet Drugs, MDL No. 1203 & Civ. No. 99-20593, 2000
WL 1222042, at *35 (E.D. Pa. Aug. 28. 2000). From November
1999 through March 2000, the notice was disseminated to
potential class members through a broad spectrum of media,
including: a television commercial; magazines; local and
national newspapers; publications targeting healthcare providers
and pharmacists; banner advertisements on the Internet directing
class members to the official settlement website; and a direct
mailing to all doctors and pharmacists believed to have
prescribed Pondimin or Redux.
After the notice program, Judge Bechtle conducted a
comprehensive evidentiary hearing on fairness of the Settlement
Agreement. He then formally certified the plaintiffs’ class and
approved the Settlement Agreement (with four amendments) on
August 28, 2000. Judge Bechtle made numerous factual
determinations in connection with his approval of the Settlement
Agreement, two of which are relevant here. First, he found that
the dissemination of notice to class members was “highly
successful,” explaining that
8
[a] sophisticated media analysis demonstrated that 97% of
women between the ages of 25 and 54 viewed one or
more forms of televised or printed notice an average of 10
times. A reach and frequency analysis indicated that
almost 80% of women between the ages of 25 and 54
were exposed to the message contained in the televised or
printed forms of notice a minimum of five times. Women
between the ages of 25 and 54 account for a vast majority
of the use of diet drugs Pondimin and Redux. . . . In
addition, a reach and frequency analysis indicated that the
settlement message reached 97% of women 35 years and
older an average of 11.4 times and that it reached 81% of
women 35 years and older a minimum of five times. With
respect to African-American women between the ages of
25 and 54, the reach and frequency analysis shows that
the settlement message reached 97% of those women an
average of 10.2 times and that 79% of African-American
women between the ages of 25 and 54 viewed the
message a minimum of five times. With respect to men
age 25 through 54, 94% viewed the settlement message
an average of 6.2 times and 54.3% were reached with the
settlement message a minimum of five times.
Id. at *36 n. 16. Second, Judge Bechtle found that the diet drugs
do not cause latent injuries – a finding that was central to his
determination of the adequacy of the class representation and his
approval of the Settlement Agreement. Objectors to the
Settlement Agreement had argued that a “futures” problem
existed because issues regarding latency and the progression of
VHD remained unsettled. Judge Bechtle rejected this argument,
noting, inter alia,
The clinical and epidemiological studies demonstrate –
and all the experts agree – that insofar as the use of
fenfluramine or dexfenfluramine results in an increased
prevalence of valvular regurgitation, that regurgitation is
detectable by echocardiogram shortly after the patients
discontinue use of diet drugs. Conversely, there is no
evidence that the use of the drugs results in any increased
risk of regurgitation that is “latent” and not detectable by
9
today’s sophisticated echocardiographic technology.
Id. at *46. After appeals terminated, the Settlement Agreement
received “Final Judicial Approval” on January 2, 2002.
By its terms, the Settlement Agreement offered class
members a chance to opt out from seeking benefits under the
agreement and, instead, to pursue remedies against Wyeth
through the tort system. The 450 petitioners before us are class
members who exercised the opt-out right and filed 127 separate
suits in Texas state courts from November 2002 to August
2003.3 Petitioners are known as “intermediate” opt-outs because
they exercised the opt-out right after an initial deadline of March
30, 2000. To qualify for an intermediate opt-out, class members
had to take an echocardiogram and have a qualified physician
find a medically relevant severity of heart-valve regurgitation as
defined by the Settlement Agreement. Intermediate opt-out
plaintiffs are entitled to sue Wyeth for compensatory damages,
but they have agreed not to seek punitive, exemplary, or multiple
damages. In return for this restriction, Wyeth has agreed to
waive any statute of limitations defense to the suits against it.
The Houston, Texas, law firm of Fleming & Associates, LLP, is
3
An additional 508 opt-out plaintiffs who had filed suits in
Mississippi state courts initially joined in this mandamus request
but have since withdrawn. We therefore address only the Texas
petitioners’ request for mandamus.
Notably, as of January 31, 2006, some 30,000 to 35,000
plaintiffs had approximately 14,000 cases pending before the
District Court for the Eastern District of Pennsylvania as part of
MDL-1203. The 450 petitioners before us obviously represent only
a small fraction of that total number. However, counsel from
numerous law firms representing thousands of opt-out plaintiffs
have submitted briefs as amici curiae in support of petitioners’
mandamus request. The amici make it clear that the question
whether the District Court has erred in refusing to remand cases to
state court is one that is common to a substantial number of the
pending diet drug cases.
10
counsel to all of the petitioners before us.
In their complaints, petitioners named as defendants both
Wyeth and the individual physicians who prescribed them the
diet drugs.4 Petitioners raised state-law claims against Wyeth
based on negligence, design and marketing defects, and
inadequate and improper warnings. They raised separate claims
of medical malpractice against the physicians for failure to warn
of the dangers of the diet drugs, failure to prescribe the drugs
under proper conditions, and failure generally to provide
reasonable treatment and proper care. Petitioners asserted no
claims under federal law.
Wyeth timely removed petitioners’ cases under 28 U.S.C.
§ 1441 to federal district courts in Texas, arguing that petitioners
“fraudulently joined” the physicians solely as a means to defeat
federal-court diversity jurisdiction. Petitioners and the
physicians are citizens of Texas, while Wyeth is a Delaware
corporation with its principal place of business in New Jersey.
Absent the physicians, it is undisputed that complete diversity of
citizenship exists for purposes of 28 U.S.C. § 1332 jurisdiction.5
The JPML eventually transferred all of petitioners’ cases
to the docket of MDL-1203. Petitioners moved for a remand to
state court under 28 U.S.C. § 1447(c), arguing that the
physicians were properly named, that the claims against the
physicians are colorable under Texas law, and that complete
diversity is therefore lacking. Wyeth argued that petitioners
4
The District Court noted that in some complaints petitioners
also named “non-diverse sales representatives employed by
Wyeth.” Merits App. at 285. The parties did not include copies of
these complaints in the voluminous appendices submitted to this
court. In their mandamus petition, which argues that their cases
belong in state court, petitioners focus exclusively upon their
claims against the non-diverse physicians. We therefore do not
address the claims that were apparently raised against Wyeth’s
sales representatives.
5
The parties do not dispute that the amount in controversy
requirement is satisfied. See § 1332(a).
11
fraudulently named the physicians because the claims against
them are clearly time-barred under the Texas two-year statute of
limitations that governs claims against health care providers. As
such, it argued, the physicians should be dismissed, and the
claims against Wyeth as the lone defendant should be heard in
federal court.
Judge Bechtle was succeeded as the presiding District
Judge over MDL-1203 by the Honorable Harvey Bartle III,
currently Chief Judge of the United States District Court for the
Eastern District of Pennsylvania (“the District Court”). In
August, September, and October 2004, the District Court issued
seven separate Pre-Trial Orders (“PTOs”) (numbers 3870, 3871,
3991, 3995, 4017, 4036, and 4054) in which he denied
petitioners’ motions to remand and dismissed all defendants
from the actions except Wyeth. Because the District Court had
previously issued a lengthy unpublished opinion on a similar
remand motion from Texas plaintiffs in an action titled Accadia
v. Wyeth, PTO No. 3666 (E.D. Pa. June 29, 2004), the District
Court adopted its analysis in Accadia to reject the petitioners’
motions.
In Accadia, the District Court explained that although
Wyeth had withdrawn Pondimin and Redux from the market in
September 1997, the plaintiffs did not file suit in Texas until
mid-2003, which was more than five years after their physicians
last prescribed the diet drugs. The District Court observed that
the test in a fraudulent joinder inquiry is not whether the plaintiff
fails to state a claim against the non-diverse defendant but
merely whether the claim is colorable. The District Court agreed
with Wyeth that the claims against the physicians are not
colorable because they are time-barred. The Court rejected the
argument that plaintiffs were unable to discover their injuries
until the echocardiogram results revealed their alleged heart
problems because actual knowledge of the particulars supporting
a cause of action (such as receipt of an examination result) is not
required to commence a limitations period. In addition, the
District Court rejected the contention that plaintiffs were unable
to timely discover their injuries because they experienced no
symptoms of heart problems or failed to attribute any symptoms
12
to the diet drugs. The Court agreed with Wyeth that the
“extensive publicity” in Texas and nationwide that accompanied
the September 15, 1997, withdrawal of the diet drugs put
plaintiffs on notice of their injuries.6 Moreover, even if the 1997
6
The District Court summarized portions of the publicity as
follows:
The publicity began on September 15, 1997. At 5:00 p.m.,
the Houston CBS news affiliate started the broadcast with
a report that Wyeth's diet drugs had been pulled from the
market, announcing that the Food and Drug Administration
(“FDA”) is urging millions of dieters to stop taking them as
“[t]hey have been linked to serious heart problems. Similar
newscasts kicked off the five o’clock news for both the
ABC and NBC affiliate station in the Houston area. These
news reports and the headline news in the papers the
following day warned viewers and readers of the evidence
indicating that the diet drugs could seriously damage the
heart. The stories were also carried on Houston radio
stations. They informed listeners that [the diet drugs] had
been pulled from the market because of evidence linking the
drugs to heart problems. Within a week, lawyers began
running ads in the Houston Chronicle advising potential
plaintiffs of the life-threatening problems that could result
from the use of the diet drugs.
The publicity in the Dallas/Fort Worth, San Antonio,
Waco, and El Paso areas was just as pervasive. . . .
....
Media coverage of the withdrawal of the diet drugs
from the market was not limited to local news outlets.
Reports about the withdrawal were the leading stories on
major television network news programs, including NBC
Nightly News, CBS Evening News and the Today Show.
USA Today, a daily newspaper with a national readership,
ran a front-page story regarding the withdrawal of diet
13
publicity was insufficient to provide notice, the District Court
concluded that plaintiffs “certainly were put on notice by the end
of March, 2000, by the comprehensive publicity campaign
surrounding the nationwide class action Settlement Agreement
with Wyeth.” Motion App. at 387 (citation omitted).
The District Court rejected the contention that VHD can
be latent. It noted that Judge Bechtle had found that diet-drug-
related injury occurs at or near the end of the last use, with no
latency period before the emergence of detectable injury. As
class members and parties to the Settlement Agreement,
plaintiffs were estopped from re-litigating the issue of latency.
The District Court also rejected plaintiffs’ reliance upon the
Texas Constitution’s “Open Courts” provision, which creates an
exception to the state statute of limitations period if it would
drugs, [their] effects, and the response by various
organizations throughout the United States regarding the
news. The article went so far as to report that potential
litigation was imminent and people who had taken diet
drugs were signing up with attorneys to take part in a large
class action lawsuit.
Wyeth also informed consumers about the recall of
its diet drugs. Immediately after removing the drugs from
the market on September 15, 1997, Wyeth issued a press
release advising patients who had used diet drugs to consult
their physicians. It included the same message in full page
ads that it purchased in leading national and regional
newspapers. These ads led with a banner in large print,
stating “An Important Message To Patients Who Have Used
Pondimin or Redux.” Furthermore, Wyeth sent a “Dear
Health Care Provider Letter” to approximately 450,000
physicians and pharmacists in which it informed them of the
withdrawal of the drugs from the market and of the potential
association between use of the drugs and instances of
valvular heart disease.
Motion App. at 384-87.
14
have been “impossible or exceedingly difficult” timely to
discover the alleged wrong. The District Court further found no
tolling based on the physicians’ alleged fraudulent concealment
of the dangers of the diet drugs, noting that there was no
evidence that the physicians knew plaintiffs were injured or
willfully concealed diet-drug injuries to deceive plaintiffs.
Finally, the District Court found no basis for tolling in the terms
of the Settlement Agreement. In conclusion, the District Court
explained in Accadia that
[i]n light of the massive publicity concerning the health
risks associated with the use of the diet drugs, the
comprehensive notice program associated with the
settlement, and this court’s determination that diet drug
induced valvular heart disease is not a latent disease, we
find that plaintiffs, through the exercise of reasonable
diligence, should have discovered their alleged injuries at
the very latest by the end of March, 2000. Since plaintiffs
did not file these actions until [more than two years later],
their claims against their prescribing physicians are
clearly time barred.
Motion App. at 394.
As noted, the District Court adopted its analysis in
Accadia to reject petitioners’ motions to remand their cases to
state court. Petitioners then turned to this court by filing a
petition and supplemental petition for a writ of mandamus.
II.
By invoking our mandamus jurisdiction, petitioners
concede, at least implicitly, that we have no appellate
jurisdiction at this time to review the denial of their remand
motions. In the ordinary course of proceedings, we acquire
jurisdiction over a matter by way of an appeal either from
final orders under 28 U.S.C. § 1291; collateral orders
under the doctrine of Cohen v. Beneficial Indus. Loan
Corp., 337 U.S. 541, 546 (1949); interlocutory orders
15
concerning injunctions under 28 U.S.C. § 1292(a);
questions certified for appeal by the district court and
then certified by the appellate court under 28 U.S.C. §
1292(b); or certification by the district court pursuant to
Fed. R. Civ. P. 54(b) of a “final” judgment when
disposition has been had of less than all parts or issues in
a given case.
In re Diet Drugs, 401 F.3d at 154 (footnote omitted). Petitioners
make no claim to the availability of review at this time through
any of these avenues of appeal, nor could they reasonably do so.
See, e.g., Caterpillar Inc. v. Lewis, 519 U.S. 61, 74 (1996) (“An
order denying a motion to remand, standing alone, is obviously
not final and immediately appealable as of right.”) (citation,
quotation marks and punctuation omitted); see also Spring
Garden Associates, L.P. v. Resolution Trust Corp., 26 F.3d 412,
414 (3d Cir. 1994) (“As for the district court’s denial of a
remand, neither 28 U.S.C. § 1291 nor 28 U.S.C. § 1292
expressly confers jurisdiction on this court to review orders
denying a remand to a state court.”) (citations omitted).
It is well-recognized, however, that mandamus is not a
mere alternative to an appeal. Westinghouse Elec. Corp. v.
Republic of Philippines, 951 F.2d 1414, 1422 (3d Cir. 1991).
Instead, mandamus is properly viewed as a “safety valve in the
final-judgment rule,” In re Asbestos Sch. Litig., 46 F.3d 1284,
1295 (3d Cir. 1994), because it provides “a drastic remedy that a
court should grant only in extraordinary circumstances in
response to an act amounting to a judicial usurpation of power.”
In re Diet Drugs, 418 F.3d at 378 (quotation marks and citation
omitted).
The All Writs Act provides that “[t]he Supreme Court and
all courts established by Act of Congress may issue all writs
necessary or appropriate in aid of their respective jurisdictions
and agreeable to the usages and principles of law.” 28 U.S.C. §
1651(a). The Supreme Court has identified “three conditions”
that must be met before a reviewing court may issue a writ of
mandamus under § 1651(a) in aid of its jurisdiction: the
petitioner must establish both that there is (1) “no other adequate
16
means” to attain the relief sought, and (2) a right to the writ that
is “clear and indisputable;” and, (3) even if these first two
conditions are met, the reviewing court in its discretion must
conclude that the writ “is appropriate under the circumstances.”
Cheney v. U.S. Dist. Court for Dist. of Columbia, 542 U.S. 367,
380-81 (2004) (citations and quotation marks omitted).
A.
We first address whether petitioners have shown that
there is no other adequate means to attain the desired relief. This
requirement is intended “to ensure that the writ will not be used
as a substitute for the regular appeals process.” Cheney, 542
U.S. at 380-81 (citing Ex parte Fahey, 332 U.S. 258, 260
(1947)). An appellate court’s overuse of the writ to review
interlocutory district court decisions would undermine the
Congressional policy against piecemeal appeals. As the
Supreme Court has explained,
[P]articularly in an era of excessively crowded lower
court dockets, it is in the interest of the fair and prompt
administration of justice to discourage piecemeal
litigation. It has been Congress’ determination since the
Judiciary Act of 1789 that as a general rule appellate
review should be postponed until after final judgment has
been rendered by the trial court. A judicial readiness to
issue the writ of mandamus in anything less than an
extraordinary situation would run the real risk of
defeating the very policies sought to be furthered by that
judgment of Congress.
Kerr v. U.S. Dist. Court for N. Dist. of Cal., 426 U.S. 394, 403
(1976) (footnote, punctuation, and citations omitted).
Based on these principles, we have recognized that a
petitioner cannot claim the lack of other means to relief if an
appeal taken in due course after entry of a final judgment would
provide an adequate alternative to review by mandamus. See
Hahnemann Univ. Hosp. v. Edgar, 74 F.3d 456, 461 (3d Cir.
1996) (“To be sure, appeal after final judgment constitutes ‘other
17
means’ of relief.”).7 Indeed, the general rule in federal litigation
is that “a party is entitled to a single appeal, to be deferred until
final judgment has been entered, in which claims of district court
error at any stage of the litigation may be ventilated.” Digital
Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863, 868 (1994)
(citation omitted). A final judgment for purposes of 28 U.S.C. §
1291 is one that “ends the litigation on the merits and leaves
nothing for the court to do but execute the judgment.” Catlin v.
United States, 324 U.S. 229, 233 (1945) (citation omitted).
Petitioners have not shown that an appeal at the end of
their cases would be inadequate. Should petitioners’ cases reach
finality in the MDL-1203 proceedings before the District Court,
the denial of their motions to remand can be reviewed in this
court in conjunction with an appeal taken under § 1291. E.g.,
Albright v. R. J. Reynolds Tobacco Co., 531 F.2d 132, 134 (3d
Cir. 1976). Of course, the JPML transferred petitioners’ cases to
MDL-1203, and thus the cases, unless “previously terminated”
as part of the MDL-1203 proceedings, will be remanded at the
7
We have also expressed a “preference for an explanation in
the [mandamus] petition for why interlocutory appeal is not an
adequate alternative. Where interlocutory appeal seems a practical
but untried avenue, we will ordinarily deny a petition for
mandamus.” In re Sch. Asbestos Litig., 977 F.2d 764, 774 (3d Cir.
1992). Petitioners contend that they did not seek certification for
an interlocutory appeal because the District Court denied
certification in other removed cases, and thus, they contend,
another such request would have been futile. On the record before
us, it seems sufficiently clear that the District Court would have
refused to certify an interlocutory appeal or enter a Rule 54(b)
order, thus leaving such review an impractical avenue for
petitioners to pursue. Cf. In re Chimenti, 79 F.3d 534, 540 (6th
Cir. 1996) (“Although the availability of permissive interlocutory
appeal under § 1292(b) should normally militate against granting
the writ, it is plain that any attempt to obtain certification in this
case would have been futile. . . . There was no apparent likelihood
that the Chimentis would succeed in convincing the district court
to certify a § 1292(b) appeal.”).
18
conclusion of the coordinated pretrial proceedings to the
transferor Texas federal district courts. 28 U.S.C. § 1407(a).
Consequently, should petitioners’ cases reach finality in the
Texas district courts, appeal would be to the Court of Appeals
for the Fifth Circuit which has also held that review of a remand
denial is available at the end of the case. See B., Inc. v. Miller
Brewing Co., 663 F.2d 545, 548 (5th Cir. 1981) (“Ordinarily, a
district court’s refusal to remand an action is not in and of itself
a final order and cannot be reviewed unless and until a final
judgment has been entered.”); Boone v. Citigroup, Inc., 416 F.3d
382, 388 (5th Cir. 2005) (reviewing denial of remand motion on
appeal from final judgment). Indeed, as a matter of appellate
jurisdiction, there appears to be no question that § 1291 review
will be available to petitioners, and to diet drug plaintiffs
generally, should they elect to raise the remand issue upon entry
of a final judgment, regardless of the court of appeals that
encompasses the district in which their cases reach finality. See
generally 19 James Wm. Moore et al., Moore’s Federal Practice
¶ 202.11[5] (3d ed. 1997) (“An order denying a motion to
remand a case to the state court from which it was removed . . .
may be appealed together with the appeal of the final
judgment.”) (footnotes omitted).
Petitioners suggest that the availability of review at the
end of their cases in the court of appeals for the transferor
district is less than certain. They fear that Wyeth might
successfully challenge the authority of other courts of appeals to
review the remand issue by arguing that this court has exclusive
authority to review the rulings of an MDL court located within
the Third Circuit. Petitioners fail, however, to direct us to any
authority to substantiate this concern. To the contrary, at least
one court of appeals has squarely recognized that an MDL
Court’s previously unreviewed rulings are properly raised in the
court of appeals for the transferor district should the case reach a
final judgment there. See Allegheny Airlines, Inc. v. LeMay,
448 F.2d 1341, 1344 (7th Cir. 1971) (per curiam) (holding that
MDL court’s dismissal of third-party complaints would return as
“part of the ‘package’” to transferor district and dismissal as
well as final judgment in primary action could be appealed to
appropriate Court of Appeals).
19
Two leading treatises unequivocally express the same
view. See 15 Charles Alan Wright & Arthur R. Miller, Federal
Practice and Procedure § 3862 (2d ed. 1986) (“Of course, once a
case has been remanded to the transferor district and a final
judgment has been entered, any appeal may include objections to
errors allegedly committed by the transferee judge.”) (footnote
omitted); 17 James Wm. Moore et al., Moore’s Federal Practice
¶ 112.07[4] (3d ed. 1997) (“Once an action is remanded to the
transferor district, it will be the court of appeals for the
transferor district that will have appellate jurisdiction over any
unreviewed matters. That court of appeals will have appellate
jurisdiction over any unreviewed rulings made by the transferee
court prior to transfer as well as rulings made by the transferor
court subsequent to remand.”) (footnotes omitted). We thus
reject petitioners’ jurisdictional concerns regarding the
availability of review on a § 1291 appeal.
Petitioners alternatively contend that awaiting a final
judgment provides an “illusory” remedy. Petitioners’ Br. at 57.
They claim that lengthy discovery and trial proceedings remain
and that “wasted resources” will be the result if it is determined
only after trial that federal jurisdiction was lacking in their cases.
Id. at 58. Petitioners are assuming, of course, that their cases
will not terminate in their favor, which is mere speculation.
Nevertheless, we discern nothing extraordinary in their situation
to justify intervention on the remand question via mandamus. It
is the congressionally mandated norm in federal litigation to
await final judgment. In these cases, following that procedure
will not deprive a reviewing court of the ability to fashion a
meaningful remedy for petitioners, such as a remand of their
cases to state court. See, e.g., McKee v. Kansas City S. Ry. Co.,
358 F.3d 329, 337 (5th Cir. 2004) (reversing denial of motion to
remand, vacating jury verdict, and ordering remand given
defendant’s failure to establish fraudulent joinder). Moreover,
like any plaintiff, these petitioners (or their counsel) must incur
the expense inherent in pursuing litigation. We recognize that
they also face the unavoidable prospect of adverse interlocutory
rulings like those challenged here. Such rulings may well
increase the cost of litigation, cause inconvenience, or result in
unanticipated delay in prosecuting the case. But these added
20
burdens, or what petitioners deem “wasted resources,” typically
do not suffice to warrant the extraordinary step of mandamus
intervention. See Roche v. Evaporated Milk Ass’n, 319 U.S. 21,
30 (1943) (noting that “inconvenience is [something] which we
must take it Congress contemplated in providing that only final
judgments should be reviewable”); Commc’n Workers of Am. v.
Am. Tel. & Tel. Co., 932 F.2d 199, 210 (3d Cir. 1991)
(“[W]hatever the outcome of the litigation, the fact that
[petitioner] must bear the inherent costs of litigation is not so
consequential a harm that we would be justified in issuing a writ
of mandamus to prevent further proceedings.”); cf. In re Sch.
Asbestos Litig., 46 F.3d 1284, 1295 (3d Cir. 1994) (issuing the
writ because the harm in awaiting a final judgment went “well
beyond the mere expense and inconvenience of litigation”).
Nor can petitioners meaningfully contend that mandamus
review of the remand issue is warranted because of the large
number of cases that Wyeth has removed to federal court on the
basis of fraudulent joinder. Petitioners argue that “it rises to the
level of impracticability for the federal judiciary to confront
thousands of appeals on this common issue at the end of the
case.” Oral Arg. Tr. at 12. We have previously rejected this
very same argument:
The petitioners’ implied premise is that final appeal is a
presumptively inadequate means of review in
megalitigation. If we accepted that position, however,
every significant interlocutory order in this case would
arguably be subject to review on petition for mandamus.
That would be an untenable result. Although the
extraordinary size and complexity of a case may assist in
creating the extraordinary circumstances necessary to
invoke mandamus, they are not alone sufficient.
In re Sch. Asbestos Litig., 977 F.2d 764, 778 n. 14 (3d Cir.
1992); see also In re Diet Drugs, 418 F.3d at 379 (rejecting “the
contention that the scope (or even the complexity) of a case,
without more, is sufficient to warrant the issuance of the writ”).
Thus, we conclude that an appeal after final judgment is not an
illusory or ineffectual means through which petitioners can
21
pursue their arguments for a remand to state court.
Petitioners suggest that mandamus is appropriate because
their situation is similar to that presented in In re Dutile, 935
F.2d 61 (5th Cir. 1991). In Dutile, plaintiffs sued in state court
based on injuries sustained onboard a shipping vessel and sought
relief under the federal Jones Act, general maritime law, and
state law. Id. at 62. The district court denied a motion to
remand after removal, denied plaintiffs’ requests to dismiss their
claims against the vessel, and refused to certify an interlocutory
appeal. Id. Plaintiffs then sought a writ of mandamus, arguing
that a remand was required because federal law prohibited
removal of the Jones Act claim, and the maritime and state law
claims were not otherwise removable. Id. The court of appeals
observed that a defendant who seeks to remove a maritime
action must establish diversity jurisdiction and, because
complete diversity was lacking, the maritime claims were not
properly removed; further, it observed that the Jones Act and
state-law claims were not removable in their own right. Id. at
62-63. In light of the district court’s clear error, the court issued
the writ and ordered a remand. Id. at 63-64. The court added,
however, that it was granting the extraordinary remedy of
mandamus “for more than the trial court’s legal error.” Id. at 63.
It noted that the Jones Act grants plaintiffs the “uncommon
right” to choose state court as the forum for their suit without
regard to the wishes of the defendants, and a failure to issue the
writ would thwart that congressional policy. Id. at 63-64.
Without mandamus relief, plaintiffs would be “trapped in a
federal forum they did not choose on an explicitly non-
removable claim,” and thus awaiting an appeal after final
judgment was not a viable alternative means to relief. Id. at 64.
The concerns at issue in Dutile are simply not present
here. Petitioners did not bring suit on a claim “explicitly”
determined by Congress to be “non-removable.” Rather, they
filed suit in state court solely under Texas law based on claims
of negligence and strict liability. Consequently, and unlike the
diverse defendant in Dutile, Wyeth could properly exercise the
right to removal and seek to establish that the non-diverse
defendants were “fraudulently joined.”
22
By statute, a defendant has the right to remove a civil
action from state court if the case could have been brought
originally in federal court. 28 U.S.C. § 1441(a). For a removal
predicated upon diversity of citizenship, a proper exercise of
federal jurisdiction requires satisfaction of the amount in
controversy requirement as well as complete diversity between
the parties, that is, every plaintiff must be of diverse state
citizenship from every defendant. See Grand Union
Supermarkets of the Virgin Islands, Inc. v. H.E. Lockhart
Mgmt., Inc., 316 F.3d 408, 410 (3d Cir. 2003).
The doctrine of fraudulent joinder represents an exception
to the requirement that removal be predicated solely upon
complete diversity. See Triggs v. John Crump Toyota, Inc., 154
F.3d 1284, 1287 (11th Cir. 1998). In a suit with named
defendants who are not of diverse citizenship from the plaintiff,
the diverse defendant may still remove the action if it can
establish that the non-diverse defendants were “fraudulently”
named or joined solely to defeat diversity jurisdiction. As will
be discussed more fully in Part B of this Opinion, this court has
held that joinder is fraudulent if “there is no reasonable basis in
fact or colorable ground supporting the claim against the joined
defendant, or no real intention in good faith to prosecute the
action against the defendant or seek a joint judgment.” Abels v.
State Farm Fire & Cas. Co., 770 F.2d 26, 32 (3d Cir. 1985)
(citation and quotation marks omitted). If the district court
determines that the joinder was “fraudulent” in this sense, the
court can “disregard, for jurisdictional purposes, the citizenship
of certain nondiverse defendants, assume jurisdiction over a
case, dismiss the nondiverse defendants, and thereby retain
jurisdiction.” Mayes v. Rapoport, 198 F.3d 457, 461 (4th Cir.
1999) (citation omitted). If, however, the district court
determines that it does not have subject-matter jurisdiction over
the removed action because the joinder was not fraudulent, it
must remand to state court. 28 U.S.C. § 1447(c). If warranted,
the district court’s “order remanding the case may require
payment of just costs and any actual expenses, including attorney
fees, incurred as a result of the removal.” Id.
Wyeth removed petitioners’ cases, and the District Court
23
ruled on petitioners’ motions to remand in accordance with these
procedures. Whether the District Court erred in denying the
motions to remand is an issue that petitioners can raise on appeal
after entry of a final judgment in their individual cases. The
United States Supreme Court has long rejected the general
availability of mandamus “as a means of reviewing the action of
a district court in denying a motion to remand a cause to the state
court from which it had been removed.” Roche, 319 U.S. at
30-31 (citing Ex parte Hoard, 105 U.S. 578 (1881); Ex parte
Harding, 219 U.S. 363 (1911); Ex parte Roe, 234 U.S. 70
(1914); and Ex parte Park Square Auto. Station, 244 U.S. 412
(1917)) (footnote omitted). On the record before us, the District
Court’s order denying the motion to remand does not warrant a
writ of mandamus. Requiring petitioners to seek review after a
final judgment is in keeping with this entrenched line of
Supreme Court precedent.
B.
Petitioners’ mandamus request also fails the second
condition for issuance of a writ of mandamus, as they have not
shown a “clear and indisputable right” to the writ. We may issue
the writ “only if the district court committed a ‘clear error of
law’ at least approaching the magnitude of an unauthorized
exercise of judicial power, or a failure to use that power when
there is a duty to do so.” In re Federal-Mogul Global, Inc., 300
F.3d 368, 384 (3d Cir. 2002) (punctuation omitted). When a
mandamus petitioner challenges a district court’s subject-matter
jurisdiction, as is the case here, our issuance of the writ has
traditionally been reserved to “restrain[ing] jurisdictional
excesses, particularly when a lower court has acted without
authority to do so.” In re Sch. Asbestos Litig., 921 F.2d at 1314
(citation omitted). However, “mere doubt” about the district
court’s jurisdiction is never enough to justify mandamus relief.
Id. Rather, “the district court’s lack of subject matter
jurisdiction [must be] ‘clear and indisputable.’” Id.; see also
Roche, 319 U.S. at 26 (“[A]ppellate courts are reluctant to
interfere [by mandamus] with the decision of a lower court on
jurisdictional questions which it was competent to decide and
which are reviewable in the regular course of appeal.”) (citation
24
omitted).
Petitioners claim that the District Court erred in its
fraudulent joinder analysis because their claims against the non-
diverse Texas physicians are colorable under state law and not
clearly time-barred. Petitioners rely upon the three decisions of
this court in which we have developed our fraudulent joinder
jurisprudence: Batoff v. State Farm Ins. Co., 977 F.2d 848 (3d
Cir. 1992); Boyer v. Snap-on Tools Corp., 913 F.2d 108 (3d Cir.
1990); and Abels, 770 F.2d 26. We will briefly review Batoff,
Boyer, and Abels before addressing whether petitioners have
established a “clear and indisputable” right to relief.
In Batoff, a Pennsylvania psychologist filed suit in state
court against an automobile insurer as the assignee of a patient’s
right to payment for medical expenses. The plaintiff also named
as a defendant another psychologist (a Pennsylvania resident),
asserting that the psychologist engaged in a conspiracy with the
insurer to prevent payment. After the insurer removed the
action, the district court rejected the plaintiff’s motion to remand
for want of diversity jurisdiction. The district court held that the
plaintiff had failed to state a claim on the merits against the non-
diverse psychologist, and dismissal of that claim resulted in
complete diversity between the plaintiff and the insurer. The
district court subsequently also dismissed the claim against the
insurer for failure to state a claim, and the plaintiff appealed
from the final judgment.
This court vacated the judgment for lack of subject-matter
jurisdiction. We reviewed the standards to be applied in a
fraudulent joinder analysis and summarized those standards as
follows:
A district court must consider a number of settled
precepts in ruling on a petition to remand a case to state
court for lack of diversity jurisdiction. When a
non-diverse party has been joined as a defendant, then in
the absence of a substantial federal question the removing
defendant may avoid remand only by demonstrating that
the non-diverse party was fraudulently joined. But the
25
removing party carries a heavy burden of persuasion in
making this showing. It is logical that it should have this
burden, for removal statutes are to be strictly construed
against removal and all doubts should be resolved in
favor of remand.
Joinder is fraudulent where there is no reasonable
basis in fact or colorable ground supporting the claim
against the joined defendant, or no real intention in good
faith to prosecute the action against the defendants or
seek a joint judgment. But, if there is even a possibility
that a state court would find that the complaint states a
cause of action against any one of the resident defendants,
the federal court must find that joinder was proper and
remand the case to state court. . . .
In evaluating the alleged fraud, the district court
must focus on the plaintiff’s complaint at the time the
petition for removal was filed. In so ruling, the district
court must assume as true all factual allegations of the
complaint. It also must resolve any uncertainties as to the
current state of controlling substantive law in favor of the
plaintiff.
Batoff, 977 F.2d at 851-52 (punctuation and citations omitted).
Applying these standards, we rejected the district court’s
decision to conduct a merits determination in the context of a
fraudulent joinder inquiry. We explained that because “it is
possible that a party is not fraudulently joined, but that the claim
against that party ultimately is dismissed for failure to state a
claim upon which relief may be granted,” the district court had
“erred in converting its jurisdictional inquiry into a motion to
dismiss.” Id. at 852. Unless the claims against the non-diverse
defendant could be deemed “wholly insubstantial and frivolous,”
which they were not, the joinder could not be considered
fraudulent.
In Boyer, upon termination of a dealership agreement, a
tool dealer brought suit asserting state-law claims against a tool
26
seller and two of the seller’s employees. The tool seller (a
diverse defendant) removed the matter, claiming that the
employees (non-diverse from the plaintiff) were fraudulently
joined as evidenced by, inter alia, the terms of a release in the
parties’ termination agreement. The district court denied
plaintiff’s motion to remand on the ground that the non-diverse
defendants “would prevail in a motion for summary judgment
for failure to state a cause of action by reason of the release in
the termination agreement.” Boyer, 913 F.2d at 110 (citation
and quotation marks omitted). The district court later entered
summary judgment for the tool seller, finding that the claim as to
that defendant also failed under the terms of the release in the
termination agreement. Id.
On appeal from the final judgment, this court held that it
was improper to reach the merits of the otherwise colorable
claims against the non-diverse employees. We observed that
“this is not a case where the action against the individual
defendants is defective as a matter of law” because state law
provided a cause of action against an employee whose fraud and
misrepresentations contributed to plaintiff's damages even if the
actions were taken in the course of employment. Id. at 111
(citation omitted). Assuming a district court can “pierce the
pleadings” to determine whether a plaintiff has asserted a
colorable claim against the non-diverse defendant, “that inquiry
is far different from the summary judgment type inquiry made by
the district court here.” Id. at 112. The district court, “in the
guise of deciding whether the joinder was fraudulent, stepped
from the threshold jurisdictional issue into a decision on the
merits,” and because the dispositive defense based on the release
was raised by all three defendants, it was impermissible for the
district court to reach the merits of that defense in deciding the
fraudulent joinder question. Id. We concluded that “where there
are colorable claims or defenses asserted against or by diverse
and non-diverse defendants alike, the court may not find that the
non-diverse parties were fraudulently joined based on its view of
the merits of those claims or defenses.” Id. at 113. Such a
determination must be left to the state court.
Finally, in Abels, plaintiffs filed suit in state court against
27
their insurer to recover under a policy for the loss of their home.
Plaintiffs also named as defendants ten “John Doe” employees
of the insurer who were non-diverse from plaintiffs. This court
held that the district court’s refusal to remand was error. We
explained that the presence of the Doe defendants could not be
said to represent an attempt to defeat diversity jurisdiction. We
stated that a court must first “ask whether, on the face of the
complaint, there are sufficient allegations concerning [the Doe
defendants’] identity and conduct to justify consideration of their
citizenship,” and, second, we must “look beyond the face of the
complaint for indicia of fraudulent joinder.” Abels, 770 F.2d at
29. Because the plaintiffs’ complaint identified the Doe
defendants with specificity and raised express claims against
them, we found the allegations sufficient to defeat diversity
jurisdiction. We then “look[ed] beyond” the allegations and
found that, at least subjectively, the “[p]laintiffs’ conduct . . .
[was] consistent with an intention to actually proceed against at
least some Doe defendants.” Id. at 32. We were “somewhat
more troubled” when looking at “the objective criteria that there
be some reasonable basis in fact and some colorable legal
ground supporting a claim against the Doe defendants.” Id.
Nevertheless, we determined that “enough recent authority”
supported the plaintiffs’ claim that a cause of action existed
under state law, thereby precluding a finding that there was no
colorable legal basis. Id. “To inquire any further into the legal
merits would be inappropriate in [a] preliminary jurisdictional
determination.” Id. at 32-33.
Petitioners assert that the District Court committed a clear
error of law because it misapplied the teachings of Batoff,
Boyer, and Abels. We disagree. The District Court confined its
inquiry to whether petitioners could make a colorable argument
to overcome the physicians’ statute of limitations defenses, and
it held that petitioners fraudulently joined those defendants
because there could be no debate that the claims against the
physicians are time-barred as a matter of law. This inquiry was
consistent with our admonition in Batoff that a district court
must rule out any possibility that a state court would entertain
the cause before holding that joinder of a non-diverse defendant
was fraudulent. 977 F.2d at 851. If a district court can discern,
28
as a matter of law, that a cause of action is time-barred under
state law, it follows that the cause fails to present even a
colorable claim against the non-diverse defendant. See Russell
Petroleum Corp. v. Environ Products, Inc., 333 F. Supp. 2d
1228, 1233 (M.D. Ala. 2004). Courts have thus recognized that
a statute of limitations defense is properly considered in
connection with a fraudulent joinder inquiry. See, e.g., LeBlang
Motors, Ltd. v. Subaru of Am., Inc., 148 F.3d 680, 690 (7th Cir.
1998) (“If the time to bring the cause of action had expired, then
the district court was correct in dismissing Wright and Knight as
fraudulently joined.”) (citation omitted).
Petitioners argue that the District Court ignored their
pleading allegations and resolved disputed issues of fact and
sensitive questions of state law in ruling on the statute of
limitations issue. They allege that they were unaware of their
diet-drug injuries because they relied upon their physicians for
information and advice, their physicians failed to warn them
about the dangers of the diet drugs, and, moreover, their
physicians fraudulently concealed those dangers. Petitioners
contend that the District Court’s ruling should have been based
solely upon these allegations, and that it erred by considering
matters outside the pleadings in holding their claims time-barred.
In Abels we made it clear that a court can look to more
than just the pleading allegations to identify indicia of fraudulent
joinder. We echoed that proposition in Boyer, although we
were careful to observe, as we did in Batoff, that a district court
must not step “from the threshold jurisdictional issue into a
decision on the merits.” Boyer, 913 F.2d at 112; see also Batoff,
977 F.2d at 852.
We have not previously had occasion to address the
extent to which a court may look beyond the pleadings in a
fraudulent joinder inquiry when faced with a statute of
limitations defense to claims against non-diverse defendants.
Certainly, a district court must accept any well-pleaded
allegations as true, and resolve uncertainty in the law governing
the limitations bar in plaintiff’s favor. Cf. Batoff, 977 F.2d at
852. But in reviewing a limitations question, we see no reason
29
to preclude a district court from a limited consideration of
reliable evidence that the defendant may proffer to support the
removal. Such evidence may be found in the record from prior
proceedings, which firmly establishes the accrual date for the
plaintiff’s claim, or in other relevant matters that are properly
subject to judicial notice. Such a limited look outside the
pleadings does not risk crossing the line between a proper
threshold jurisdictional inquiry and an improper decision on the
merits. After all, a statute of limitations defense is not a merits-
based defense to the plaintiff’s case. As one court has aptly
observed,
No doubt the statute of limitations is a defense, and a
rather unique one at that. It is one that does not truly go
to the merits of the plaintiff’s claim in any sense. It does
not assert some excuse or justification for what the
defendant is alleged to have done, nor does it assert any
release or waiver of any right of action against the
defendant. It does not even deny the wrong or claim
contributory fault or set off. Rather, it virtually admits the
validity of the cause of action and the plaintiff’s right to
collect upon it, but asserts that the plaintiff waited too
long to pursue the cause of action.
Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1319 (9th Cir.
1998).
Under Texas law, which governs the limitations question
raised here, the Texas Supreme Court has similarly observed that
“[o]f course, no statute of limitations directly addresses the
merits of a claim to which it is interposed as a bar. Instead,
limitations rest on a legislative policy judgment that requires the
diligent pursuit of one’s legal rights at the risk of losing them if
they are not timely asserted.” City of Murphy v. City of Parker,
932 S.W.2d 479, 481-82 (Tex. 1996) (citation omitted).
The policy judgment that stale claims should not see the
light of day, when viewed in combination with a defendant’s
statutory right to remove an action that falls within the original
jurisdiction of a federal court, counsels against confining a
30
district court strictly to the pleading allegations when it assesses
a fraudulent joinder/statute of limitations question. A limited
look beyond the pleadings, as described above, runs no risk of
usurping jurisdiction over cases that properly belong in state
court. To hold otherwise would run the risk that we condone the
practice of asserting baseless, stale claims against non-diverse
defendants for the sole purpose of thwarting a defendant’s right
to remove a case that falls within the original jurisdiction of a
federal court.8
In Ritchey, the Ninth Circuit found that it was
“reasonable and necessary” for a diverse defendant to present
facts outside the pleadings to establish that joinder of the non-
diverse defendants was fraudulent. 139 F.3d at 1318. Like the
present case, the fraudulent joinder in Ritchey was based upon
an assertion of a limitations bar under state law as to the claims
against non-diverse defendants. Id. The court of appeals
endorsed a look beyond the pleading allegations and took
judicial notice of its prior decision in which it had affirmed
factual determinations that effectively established the date on
which the plaintiff’s latest cause of action could be deemed to
have accrued. Id. at 1319-20. On the basis of its prior decision,
the court was able to conclude that “[t]he harm was well known
to [the plaintiff] several years before he brought his action, and
he also knew what wrongdoing had caused that harm.” Id. at
1320. The court thus found it “pellucid” that plaintiff filed suit
on his new theory after the limitations period had expired, and
that the non-diverse parties were clearly “sham defendants for
8
Petitioners’ suggestion that a statute of limitations defense
is similar to the defense at issue in Boyer is unavailing. In Boyer,
the defense asserted was based on the terms of a release in the
parties’ termination agreement and went directly to the merits of
the plaintiff’s cause of action. See Boyer, 913 F.2d 108. As such,
it was improper for the district court to reach the merits of that
defense as part of its fraudulent joinder inquiry. Moreover, unlike
Boyer, the present situation is not a common-defense case where
the asserted defense is shared by the diverse and non-diverse
defendants alike.
31
purposes of removal.” Id.
The District Court here looked beyond the pleadings in
much the same manner. To determine if petitioners’ claims
accrued more than two years before they filed suit, the District
Court considered the media-generated publicity that
accompanied withdrawal of the diet drugs from the market on
September 15, 1997. It also looked to the extensive and “highly
successful” notification campaign that preceded Judge Bechtle’s
approval of the Settlement Agreement on August 28, 2000.
Finally, the District Court looked to Judge Bechtle’s prior factual
determination that the diet drugs do not cause latent injuries.
The District Court looked, in other words, to evidence that was
established in prior proceedings in the MDL-1203 litigation (i.e.,
the no-latency determination and the success of the notification
campaign), and to facts subject to judicial notice (i.e., the readily
ascertainable sources that publicized withdrawal of the diet
drugs).9 Applying Texas law, the District Court determined that
the limitations period on the claims against the physicians clearly
began to run either when the diet drugs were withdrawn from the
market on September 15, 1997, or, at the latest, at the end of
March 2000 when the class-member notification campaign
concluded.
Petitioners have not shown that the District Court’s
disposition of this issue warrants mandamus. Under Texas law,
9
See Ieradi v. Mylan Labs., Inc., 230 F.3d 594, 600 n. 3 (3d
Cir. 2000) (“Under Federal Rule of Evidence 201, [a court] may
take judicial notice at any stage of the proceeding of a fact not
subject to reasonable dispute that is capable of accurate and ready
determination by resort to a source whose accuracy cannot be
reasonably questioned.”) (citation omitted); see also Benak ex rel.
Alliance Premier Growth Fund v. Alliance Capital Mgmt. L.P.,
435 F.3d 396, 401 n. 15 (3d Cir. 2006) (holding that district court
did not err in taking judicial notice of newspaper articles because
“[t]hey serve only to indicate what was in the public realm at the
time, not whether the contents of those articles were in fact true”)
(citation omitted).
32
“the commencement of the limitations period may be determined
as a matter of law if reasonable minds could not differ about the
conclusion to be drawn from the facts in the record.” Childs v.
Haussecker, 974 S.W.2d 31, 44 (Tex. 1998) (citation omitted).
The statute of limitations applicable to petitioners’ claims
against the physicians provided in relevant part as follows:
Notwithstanding any other law, no health care liability
claim may be commenced unless the action is filed within
two years from the occurrence of the breach or tort or
from the date the medical or health care treatment that is
the subject of the claim or the hospitalization for which
the claim is made is completed.
Tex. Rev. Civ. Stat. art. 4590i, § 10.01 (repealed 2003).10
The Texas Supreme Court has “repeatedly held that
section 10.01 establishes an absolute two-year statute of
limitations for health care liability claims.” Diaz v. Westphal,
10
This version of the statute of limitations, which the
District Court applied to petitioners’ claims, was repealed by the
Texas Legislature effective September 1, 2003. See Act of June 2,
2003, 78th Leg., R.S., ch. 204, § 10.09, 2003 Tex. Gen. Laws 864,
884; Murphy v. Russell, 167 S.W.2d 835, 836 n.1 (Tex. 2005).
The current version of the health care liability statute of limitations
is codified at Tex. Civ. Prac. & Rem. Code Ann. § 74.251 (Vernon
2005). Significantly, suits filed before the effective date of the new
act are subject to the prior law. Yancy v. United Surgical Partners
Intern., Inc., 170 S.W.3d 185, 189 n. 1 (Tex. App. 2005). Because
the petitioners before us all filed suit before the effective date of
the new law, the District Court properly applied § 10.01 to their
claims. We note, in any event, that the language of the new statute
does not differ in any respect that would be material to an
assessment of when the limitations period began to run on
petitioners’ claims against the physicians. Id.; see Adams v.
Gottwald, 179 S.W.3d 101, 103 (Tex. App. 2005) (observing that
“section 74.251 is virtually identical to its predecessor, section
10.01”).
33
941 S.W.2d 96, 99 (Tex. 1997). Consequently, there is no
“discovery rule” in setting the date when the time limit on a
claim begins to run under § 10.01. Morrison v. Chan, 699
S.W.2d 205, 208 (Tex. 1985) (citation and quotation marks
omitted). In other words, the statute of limitations does not
begin when the plaintiff discovered or reasonably should have
discovered the injury. Id. Rather, one of three dates is used to
set commencement of the limitations period: (1) “the date of the
tort;” (2) “the last date of the relevant course of treatment;” or
(3) “the last date of the relevant hospitalization.” Husain v.
Khatib, 964 S.W.2d 918, 919 (Tex. 1998). A plaintiff cannot
choose the most favorable of these dates; if the specific date of
the tort can be ascertained, the limitations period commences on
that date. Earle v. Ratliff, 998 S.W.2d 882, 886 (Tex. 1999).
On September 15, 1997, the diet drugs were withdrawn
from the market and no longer available for prescription. That
date is, therefore, the last possible date on which any of the
physicians could have prescribed Wyeth’s diet drugs, and
petitioners make no allegation to the contrary. The District
Court could reasonably conclude that Texas law clearly
mandates that petitioners’ time for filing suit on a claim that the
physicians committed malpractice in prescribing the diet drugs
and in failing to warn of the risks of taking the diet drugs began
to run on or before September 15, 1997. See Gross v. Kahanek,
3 S.W.3d 518, 521 (Tex. 1999) (holding that statute of
limitations began to run when doctor last prescribed drug as part
of “course of treatment” that allegedly caused patient’s death).
Petitioners filed the first of their suits against the physicians in
November, 2002, more than five years later.
The District Court further concluded that, even if
petitioners lacked sufficient awareness of their claims
notwithstanding the publicity that surrounded withdrawal of the
diet drugs, they were on notice at the end of March 2000 by
virtue of the media campaign that preceded approval of the
Settlement Agreement. Petitioners argue that the effectiveness
of the notice campaign in reaching each individual class member
is an issue that must be determined by a fact-finder on a case-by-
case basis. As noted, after an extensive evidentiary hearing on
34
fairness, Judge Bechtle found that the program implemented to
notify class members was “highly successful,” a determination
that was based on the compelling statistical evidence of success
set forth at length in Part I of this Opinion. Judge Bechtle’s
approval of the Settlement Agreement depended in meaningful
part on the effectiveness of the notice program, as proper notice
was a prerequisite to the holdings that the court had obtained
personal jurisdiction over absentee class members and that the
requirements of due process and Federal Rules of Civil
Procedure 23(c)(2) and 23(e) had been satisfied. Petitioners, for
their part, do nothing more than assert that the effectiveness of
the notice campaign must now be decided as a factual matter in
each individual case, but they base that assertion solely upon a
bald allegation that they were all unaware of potential diet-drug
claims against their doctors in March 2000. The notice
campaign’s effectiveness was previously litigated before Judge
Bechtle, and, as class members, petitioners were party to those
proceedings, which received Final Judicial Approval. The notice
campaign was expressly designed “to make class members aware
of the potential risks posed by Pondimin and Redux, of the legal
rights arising from the use of those drugs, of the proposed
nationwide class action settlement which would resolve such
claims and of their opportunity to opt out or object to the
Settlement.” In re Diet Drugs, 2000 WL 1222042, at *35. On
this record, we cannot conclude that the District Court
committed a clear error of law, or engaged in an unauthorized
use of its power, in estopping petitioners’ effort to re-litigate
these issues to overcome the limitations bar.
In similar fashion, petitioners allege that their diet-drug
injuries remained “latent” and were only discovered after
echocardiograms were taken, at which time they first became
aware of their potential claims against the physicians. Judge
Bechtle squarely held, however, that Pondimin and Redux do not
cause latent injuries; rather, any injury was detectable by
echocardiogram upon or shortly after last use of the diet drugs,
which were pulled from the market on September 15, 1997.
This “no latency” determination was made after a full and fair
evidentiary hearing and was an essential finding to support
approval of the Settlement Agreement, as it bore directly on the
35
adequacy of the class representation. Class counsel had the
opportunity but did not object to this finding at the fairness
hearing. As to the individuals who did object, Judge Bechtle
found that they “presented no evidence from any study to
support the contrary view that [VHD] is either latent or that it
progresses in most former patients.” In re Diet Drugs, 2000 WL
1222042, at *47. Judge Bechtle fully considered, but rejected,
the studies relied upon by the objectors and concluded that there
was no support for a latency determination.
Petitioners respond that the latency issue is once again
under debate before the District Court because certain class
members have submitted affidavits from two doctors who claim
that diet-drug-induced VHD can be latent. Petitioners argue that
“[i]n the face of such scientific disagreement the district court’s
disregard of Plaintiffs’ allegations in a fraudulent joinder inquiry
was improper.” Petitioners’ Br. at 32-33. To the extent that
petitioners claim that they now have new evidence regarding
latency, we fail to see how that evidence would suffice to show
clear error in the District Court’s fraudulent joinder analysis
Similarly, we cannot conclude that petitioners have
shown a “clear and indisputable right” to the writ based on the
tolling afforded under the Texas Constitution’s “Open Courts”
provision.11 This provision creates an exception to the two-year
statute of limitations under § 10.01 in situations where the
plaintiff had no “reasonable opportunity to discover the alleged
wrong and bring suit before the limitations period expired.”
Shah v. Moss, 67 S.W.3d 836, 842 (Tex. 2001) (citations
omitted); see Boyd v. Kallam, 152 S.W.3d 670, 676 (Tex. App.
2004). The extensive publicity and notice campaigns provide
adequate support, at least for purposes of this mandamus
proceeding, for the District Court’s finding that petitioners had
the requisite “reasonable opportunity” to discover their doctors’
11
Article I, Section 13 of the Texas Constitution provides in
relevant part, “All courts shall be open, and every person for an
injury done him, in his lands, goods, person or reputation, shall
have remedy by due course of law.”
36
alleged torts. Moreover, it was not clearly erroneous for the
District Court to conclude that if the petitioners had acted with
reasonable diligence, they could have learned more than two
years before filing suit that the diet drugs were linked to heart-
valve injuries. Those injuries manifested promptly and were
readily detectable by echocardiogram. For purposes of our
ruling on mandamus, we have no basis to disagree with the
District Court’s conclusion that petitioners clearly do not come
within the “no reasonable opportunity” exception to the Texas
statute of limitations.
Petitioners also argue that the limitations period can be
tolled based on the physicians’ alleged “fraudulent
concealment,” which is a “defense or plea in avoidance to the
running of [the limitations period]” under Texas law. Estate of
Fawcett, 55 S.W.3d 214, 218 n. 2 (Tex. App. 2001). Under
Texas law,
[F]raudulent concealment in medical negligence cases
estops a health-care provider from relying on limitations
to bar a plaintiff’s claim. The plaintiff must show the
health-care provider actually knew a wrong occurred, had
a fixed purpose to conceal the wrong, and did conceal the
wrong from the patient. Fraudulent concealment tolls
limitations until the plaintiff discovers the fraud or could
have discovered the fraud with reasonable diligence.
Gilbert v. Bartel, 144 S.W.3d 136, 144 (Tex. App. 2004)
(footnotes omitted). Petitioners alleged in their complaints that
the physicians fraudulently concealed the dangers of Pondimin
and Redux.12 Petitioners do not allege, however, that the
12
The parties have not made all 450 of petitioners’
complaints part of the record in this proceeding, but the “Master
Petition” filed by petitioners’ counsel indicates that petitioners all
made the same allegation regarding fraudulent concealment. See
Respondent’s App. at 2573 (“[T]he statute of limitations is tolled
as to [plaintiffs’] claims against the defendant physician(s) as a
result of his/her fraudulent concealment of the dangers of Pondimin
37
physicians “actually knew” that they were injured by the diet
drugs and concealed that fact from them, or that the physicians
ever willfully concealed the dangers of the diet drugs; petitioners
allege only that the physicians were negligent in their failure to
exercise ordinary care.
As the Texas Supreme Court has explained, “fraudulent
concealment requires more than evidence that the physician
failed to use ordinary care; it also requires evidence that the
defendant actually knew the plaintiff was in fact wronged, and
concealed that fact to deceive the plaintiff.” Earle, 998 S.W.2d
at 888. Given petitioners’ allegations, we see no clear error or
usurpation of authority in the District Court’s failure to find a
colorable basis for fraudulent-concealment tolling.
Petitioners raise two additional tolling arguments that
warrant consideration. First, they claim that the Settlement
Agreement precludes Wyeth from arguing a limitations defense
on behalf of the physicians. By its terms, the Settlement
Agreement bars petitioners from suing Wyeth for certain types
of damages, and in return for that restriction Wyeth “shall not
assert any defense based on any statute of limitations or repose.”
Motion App. at 690 (emphasis added). Petitioners interpret this
provision as prohibiting Wyeth from relying on a physician’s
limitations defense as the ground for removal. Petitioners
contend, in other words, that the word “any” in the above-quoted
language should be interpreted to have a broad enough meaning
to cover “any” limitations defense for “any” party named as a
defendant, including a limitations defense specific to the claims
against the physicians. The Settlement Agreement, however,
does not prohibit Wyeth from removing petitioners’ cases to
federal court and asserting fraudulent joinder on the ground that
and Redux and/or the defendant physician(s) should be estopped
from asserting the affirmative defense of limitations because as a
fiduciary to Plaintiff(s) and the treating physician, the defen[da]nt
physician(s) had duty to warn him of the dangers of Pondimin and
Redux and Plaintiff(s) relied on his advi[c]e, or lack thereof, to
his/her detriment.”).
38
the claims against the non-diverse physicians are time-barred.
Moreover, while petitioners also claim that the limitations
defense is personal to the physicians and cannot be asserted by
Wyeth, we cannot conclude that it was a clear error for the
District Court to consider the defense as part of its inquiry into
whether petitioners were thwarting diversity jurisdiction by
joining defendants against whom they have no colorable claim.
The presence of a clear limitations bar is one way to identify a
fraudulent joinder, and consideration of the limitations defense
enabled the District Court to assure itself that it could properly
exercise diversity jurisdiction.
Second, petitioners contend that the injunction Judge
Bechtle entered to preclude suits against Wyeth and others tolled
the limitations period for claims against the physicians. They
cite Hughes v. Mahaney & Higgins, 821 S.W.2d 154 (Tex.
1991), for the proposition that “[w]here ‘a person is prevented
from exercising his legal remedy by the pendency of legal
proceedings, the time during which he is thus prevented should
not be counted against him in determining whether limitations
have barred his right.’” Id. at 157 (quoting Walker v. Hanes, 570
S.W.2d 534, 540 (Tex. App. 1978)) (citations omitted).
In approving the Settlement Agreement on August 28,
2000, Judge Bechtle entered an order that class members who
did not “timely and properly” exercise an opt-out right were
enjoined “from asserting, and/or continuing to prosecute against
[Wyeth] or any other Released Party any and all Settled Claims
which the class member had, has or may have in the future in
any federal, state or territorial court.” In re Diet Drugs, 2000
WL 1222042, at *71. A “timely” intermediate opt-out right was
determined based on the taking of an echocardiogram between
September 30, 1999, and January 3, 2003, with a requirement
that the right to opt out be exercised no later May 3, 2003.
Petitioners argue that in view of these deadlines, “they were
entitled to wait until May 3, 2003 to opt out, and until May 3,
2004 to file suit.” Petitioners’ Br. at 51 (emphasis added). As
Wyeth correctly notes, however, petitioners were at liberty to
free themselves from the terms of the injunction against suit
simply by obtaining an echocardiogram anytime during the
39
relevant period beginning on September 30, 1999. As to the
matter of tolling, therefore, petitioners have not clearly
established that they were “prevented” from discovering their
claims, exercising the opt-out right, and filing suit against their
physicians. Because the injunction did not bar suit against a
physician if the plaintiff timely and properly exercised an
intermediate opt-out right, we cannot conclude that the District
Court committed a clear error in failing to afford tolling on this
ground.
Petitioners raise additional arguments, some for the first
time in this mandamus proceeding, regarding the District Court’s
ruling on the fraudulent joinder issue. We find those remaining
arguments insufficient and in need of no separate discussion.
We conclude that petitioners have not shown a clear and
indisputable lack of diversity jurisdiction over their actions, or
that the District Court’s refusal to remand amounts to a clear
error of law. We emphasize that our holding in this matter is not
intended to prejudice a later reviewing court in its consideration
of petitioners’ arguments for remand should petitioners elect to
appeal on that issue after entry of a final judgment. We have
merely reviewed the fraudulent joinder question for purposes of
adjudicating petitioners’ request for an extraordinary writ, and
we conclude in that regard that petitioners lack a clear and
indisputable right to relief.
III.
Having considered petitioners’ arguments, we hold that
they fail to meet the first two conditions to mandamus relief.
Accordingly, we will deny the petition for a writ of mandamus.
________________________