Melissa Ramirez v. Vintage Pharmaceuticals LLC

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
Nos. 17-1221 & 17-1226
_____________
MELISSA RAMIREZ, ET. AL.
v.
VINTAGE PHARMACEUTICALS, LLC;
ENDO PHARMACEUTICALS, INC;
ENDO HEALTH SOLUTIONS, INC.,
f/k/o ENDO PHARMACEUTICALS HOLDINGS, INC.;
PATHEON, INC.
Patheon, Inc.;
Appellant in 17-1121
Vintage Pharmaceuticals, LLC;
Endo Pharmaceuticals, Inc.;
Endo Health Solutions, Inc.,
Appellants in 17-1126
_______
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil No. 2-15-cv-06162)
District Judge: Honorable Juan R. Sanchez
______________
Argued February 22, 2017
______________
Before: CHAGARES, VANASKIE, and KRAUSE,
Circuit Judges
(Opinion Filed: March 28, 2017)
Barbara R. Binis
REED SMITH LLP
1717 Arch Street
Three Logan Square, Suite 3100
Philadelphia, PA 19103
Angela R. Vicari [Argued]
ARNOLD & PORTER KAYE SCHOLER LLP
250 West 55th Street
New York, NY 10019
Counsel for Appellants Vintage Pharmaceuticals, LLC,
Endo Pharmaceuticals, Inc & Endo Health Solutions,
Inc.
Christopher R. Carton
Loly G. Tor
K&L GATES LLP
One Newark Center
10th Floor
Newark, NJ 07102
2
Amy L. Groff
K&L GATES LLP
17 North Second Street
18th Floor
Harrisburg, PA 17101
Counsel for Appellant Patheon Inc.
Steven L. Beard
STEVEN L. BEARD, P.C.
Suite 2100
1380 West Paces Ferry Road, N.W.
Atlanta, GA 30327
Keith D. Bodoh [Argued]
ROBERTSON, BODOH & NASRALLAH, LLP
990 Cobb Parkway North
Suite 205A
Marietta, GA 30062
Walter Z. Steinman
LAW OFFICES OF WALTER Z. STEINMAN
400 Greenwood Avenue
Wyncote, PA 19095
Counsel for Appellees, Melissa Ramirez, et al.
3
________________
OPINION OF THE COURT
________________
VANASKIE, Circuit Judge.
The Class Action Fairness Act of 2005 (“CAFA”),
Pub. L. 109-2, 119 Stat. 4 (2005), extends federal jurisdiction
to “mass actions.” See 28 U.S.C. § 1332(d)(11). One
mandatory characteristic of a mass action is a proposal by
more than one hundred persons to try their claims jointly. See
28 U.S.C. § 1332(d)(11)(B)(i). However, cases that are
consolidated or coordinated only for pretrial purposes are
explicitly exempted from CAFA’s mass action provision, and
thus are not removable. See 28 U.S.C. §
1332(d)(11)(B)(ii)(IV). The question before us on appeal is
whether the Complaint filed by the Plaintiff-Appellees in
state court proposed a joint trial such that their action was
properly removed to federal court.
Plaintiff-Appellees are a group of 113 birth control
users affected by a packaging error on certain brands of
Qualitest birth control pills. These affected users filed a
products liability action against the Defendant-Appellant
manufacturers in Pennsylvania state court that was
subsequently removed. Plaintiffs now argue this removal was
improper because they did not propose to try their claims
jointly, but their Complaint sends mixed signals. Weighing in
favor of federal jurisdiction under CAFA, Plaintiffs filed a
single complaint which joins the claims of 113 persons and
contains numerous instances of language that indicates a
single trial was contemplated. Cutting against federal
4
jurisdiction, the Complaint specifies that the Plaintiffs’
“claims have been filed together . . . for purposes of case
management on a mass tort basis.” (Compl. ¶ 1; J.A. 139.)
Plaintiffs characterize this language as seeking to limit the
coordination of their claims to pretrial matters. They also
point to a motion filed in the state court requesting admission
to the Mass Tort Program, which allegedly prevents their
claims from being tried jointly.
After the District Court ordered the action be
remanded to state court for lack of subject matter jurisdiction,
we accepted the manufacturers’ request for appeal under 28
U.S.C. § 1453(c)(1). Upon careful consideration, we will
reverse the Order of the District Court and find federal
jurisdiction to be proper under CAFA. Importantly, we
determine that the language Plaintiffs hold out as disclaiming
their intent to seek a joint trial is not sufficiently definite to
prevent removal as a mass action. Where, as here, more than
100 plaintiffs file a single complaint containing claims
involving common questions of law and fact, a proposal for a
joint trial will be presumed unless an explicit and
unambiguous disclaimer is included.
I.
The consumer products liability case before us begins,
like many others, with a recall. A packaging error affecting a
brand of Qualitest birth control pills was discovered in the
wake of a consumer product complaint. This error reversed
the sequence of pills contained within each birth control
package, which precipitated an unintended and less effective
dosage program. Eight brands of Qualitest birth control
pills—each of which shared a common packaging process
and were at risk for the same error—executed nationwide
5
recalls reaching more than 3.2 million blister packs of birth
control.
Plaintiffs, alleging that they were harmed by the
packaging error, launched this products liability action
against the Defendant-Appellant manufacturers of the birth
control pills and packaging in the Court of Common Pleas of
Philadelphia County, Pennsylvania.1 The Complaint alleges
that the similarly-situated plaintiffs are residents of 28
different states “whose claims arise out of a common set of
operative facts . . . and which claims have been filed together
. . . for purposes of case management on a mass tort basis.”
(Compl. ¶ 1; J.A. 139.)
The Complaint contains a section devoted to “FACTS
COMMON TO ALL COUNTS” and a “DAMAGES” section
that divides the 113 plaintiffs into three categories based on
their state residency. After each count in the Complaint,
Plaintiffs collectively “request a jury trial.” (Compl. ¶¶ 21,
25, 29, 37, 41; J.A. 145–50.) In the Prayer for Relief,
Plaintiffs, again collectively, seek “an award of damages in
such amount to be determined at trial.” (Compl. ¶ 41; J.A.
150.) Similarly, the Complaint’s Notice to Defend warns the
manufacturers that if they fail to defend, “the case may
proceed without you and a judgment may be entered against
you by the court.” (J.A. 137.)
1
A separate action had been filed in the state of
Georgia that was then removed to the Northern District of
Georgia. The district court judge denied the plaintiffs’
motion for class certification on November 4, 2015.
Shepherd v. Vintage Pharm., LLC, 310 F.R.D. 691, 701 (N.D.
Ga. 2015). This action followed the very next day.
6
One week after filing their Complaint, Plaintiffs
submitted a motion to assign their action to the Court of
Common Pleas’ Mass Tort Program. The captions of that
motion and the accompanying memorandum in support state
“JURY TRIAL DEMANDED.” Before that motion was
briefed or ruled upon, the manufacturers removed the action
to the Eastern District of Pennsylvania as a “mass action”
under CAFA. 28 U.S.C. § 1332(d)(11). Plaintiffs sought to
remand the action to the Court of Common Pleas on the
ground that they have not presented a “mass action” within
the purview of CAFA. The District Court held oral argument
after receiving briefs and other material submissions. The
District Court ultimately granted the Motion to Remand,
concluding that “CAFA precludes federal jurisdiction in this
matter because Plaintiffs did not propose to try their claims
jointly.” Ramirez v. Vintage Pharm., LLC, No. 15-cv-6162
(E.D. Pa. Sep. 21, 2016); (J.A. 2.) After the manufacturers’
emergency motion for a stay pending appeal in the District
Court was denied, they requested this appeal.
II.
The District Court had subject matter jurisdiction over
the removed action under CAFA, 28 U.S.C. § 1332(d)(11).
After the District Court ordered remand, we opted to accept
the manufacturers’ appeal under 28 U.S.C. § 1453(c)(1). We
apply plenary review to issues of subject matter jurisdiction,
including the determination of whether to properly regard a
case as a mass action under CAFA. Frederico v. Home
Depot, 507 F.3d 188, 193 (3d Cir. 2007).
III.
7
CAFA gives the federal courts subject matter
jurisdiction over “mass actions,” a term that includes “any
civil action . . . in which monetary relief claims of 100 or
more persons are proposed to be tried jointly on the ground
that the plaintiffs’ claims involve common questions of law or
fact,” and which meet the specified jurisdictional amount
requirements. 28 U.S.C. § 1332(d)(11)(B)(i). CAFA also
requires that a mass action have an aggregate amount in
controversy exceeding $5,000,000 and minimal diversity
among parties. Id. § 1332(d)(2), (d)(11)(A). Importantly,
“claims [that] have been consolidated or coordinated solely
for pretrial proceedings” will not qualify as a mass action
under CAFA. Id. § 1332(d)(11)(B)(ii)(IV).
The manufacturers’ appeal rests entirely on whether
Plaintiffs have proposed to try their claims jointly. Id. §
1332(d)(11)(B)(i). In their quest for remand to the Court of
Common Pleas, Plaintiffs insist that they made no such
proposal for a joint trial of all 113 claims included in their
Complaint. The District Court agreed and granted their
request for remand.
For purposes of determining whether an action
qualifies as a mass action, a proposal for a joint trial may be
either explicit or implicit. Atwell v. Boston Sci. Corp., 740
F.3d 1160, 1163 (8th Cir. 2013); In re Abbott Labs., Inc., 698
F.3d 568, 572–73 (7th Cir. 2012). An explicit proposal
encompasses a clear textual request for a joint trial contained
within the complaint, a motion, or some other filing by a
group of plaintiffs. An explicit proposal can also be made
orally at some point during the litigation. By comparison, an
implicit proposal may be found when all of the circumstances
of the action, including the language of the complaint and the
structure of the action, lead to the assumption that the claims
8
will be tried jointly. See Abbott Labs., 698 F.3d at 573 (“a
proposal for a joint trial can be implicit, particularly where
‘the assumption would be that a single trial was intended’”
(quoting Koral v. Boeing Co., 628 F.3d 945, 947 (7th Cir.
2011)).
There are at least three explicit indications that
Plaintiffs proposed a joint trial in this action, all of which are
plain from the text of their initial filings. In fact, the language
that they chose to incorporate into their Complaint and Notice
to Defend contains many references to a single trial. First,
after each count in the Complaint, Plaintiffs “respectfully
request a jury trial”—never multiple or separate trials.
(Compl. ¶¶ 21, 25, 29, 37, 41; J.A. 145–50.) Next, they
continue this singular language in their Prayer for Relief,
which seeks “an award of damages in such amount to be
determined at trial.” (Compl. ¶ 41; J.A. 150.) Finally, the
Notice to Defend warns the manufacturers that if they fail to
enter an appearance and file their defenses and objections to
Plaintiffs’ claims, “a judgment” may be entered against them.
(J.A. 137.) Plaintiffs also specify that their “claims arise out
of a common set of operative facts” and that these facts are
“common to all counts.” (Compl. ¶ 1; J.A. 139, 141–42.)
These instances of singular language, taken together, provide
strong evidence of a proposal for joint trial.
The structure of Plaintiffs’ Complaint also implies that
they have proposed to try all 113 of their claims jointly.
Where a single complaint joins more than 100 separate claims
involving common questions of law and fact, there is a
presumption that those plaintiffs have implicitly proposed a
joint trial. See, e.g., Scimone v. Carnival Corp., 720 F.3d
876, 881 (11th Cir. 2013) (“plaintiffs can propose a joint trial,
. . . by naming 100 or more plaintiffs in a single complaint”);
9
Abbott Labs., 698 F.3d at 572 (“one complaint implicitly
proposes one trial”); Koral, 628 F.3d at 947 (“[W]here a
single complaint joins more than 100 plaintiffs’ claims
without proposing a joint trial, . . . the assumption would be
that a single trial was intended—one complaint, one trial, is
the norm.”).
Were this the end of our inquiry, we would have no
difficulty finding that Plaintiffs had, at the very least, implied
that they were seeking a joint trial on their claims. However,
Plaintiffs have included some rather ambiguous language in
their Complaint that they argue should be read as a disclaimer
that a joint trial had been proposed. Specifically, the
Complaint states that their “claims have been filed together . .
. for purposes of case management on a mass tort basis.”
(Compl. ¶ 1; J.A. 139.) Because CAFA explicitly exempts
“claims [that] have been consolidated or coordinated solely
for pretrial proceedings,” 28 U.S.C. § 1332(d)(11)(B)(ii)(IV),
Plaintiffs assert that this language evinces their intent to limit
coordination of their claims to “case management,” which
they characterize as referring strictly to a pretrial phase of the
litigation. The District Court agreed that the term “case
management” extended only to pretrial procedures and
deadlines, and explained that “by stating the filing of their
claims together was for case management purposes, Plaintiffs
have . . . made their intent clear.” Ramirez, No. 15-cv-6162;
(J.A. 3.)
Plaintiffs’ contention that they intentionally worded
their Complaint to avoid proposing a joint trial of all their
claims is constructed on a solid legal foundation. As masters
of their Complaint, Plaintiffs may structure their action in
such a way that intentionally avoids removal under CAFA.
See Scimone, 720 F.3d at 883–84. For example, courts have
10
repeatedly held “that plaintiffs have the ability to avoid §
1332(d)(11)(B)(i) jurisdiction by filing separate complaints
naming less than 100 plaintiffs.” Id. at 884. The same
principle applies where plaintiffs “expressly seek[] to limit
[their] request for coordination to pre-trial matters, and
thereby align with the mass action provision’s exception for
‘any civil action in which . . . the claims have been
consolidated or coordinated solely for pretrial proceedings.’”
Corber v. Xanodyne Pharm., Inc., 771 F.3d 1218, 1224 (9th
Cir. 2014) (en banc) (quoting 28 U.S.C. §
1332(d)(11)(B)(ii)(IV)). This principle was applied in
Parson v. Johnson & Johnson, where the Tenth Circuit found
that a group of plaintiffs had expressly disclaimed the
intention to try their claims jointly when the complaint made
clear that “[j]oinder of Plaintiffs’ claims is for the purpose of
pretrial discovery and proceedings only and is not for trial.”
749 F.3d 879, 888 n.3 (10th Cir. 2014).
In accordance with these decisions, a clear and express
statement in the Complaint evincing an intent to limit
coordination of claims to some subset of pretrial proceedings
would effectively shield this action from removal under
CAFA. But the language Plaintiffs ultimately chose to
include in their Complaint is far from precise or definitive
enough to signal their intent to limit coordination to pretrial
matters. The phrase upon which Plaintiffs rely—that the
“claims have been filed together . . . for purposes of case
management on a mass tort basis”—provides no indication
that they seek coordination only for pretrial proceedings.
Even if Plaintiffs had included the word “only” in this
context, we would still need to determine whether “case
11
management” does, in fact, reference only pretrial phases of
the litigation.2
Despite this ambiguity, Plaintiffs contend that the
burden of proof falls on the manufacturers, and that the
language they have included in their Complaint is enough to
prevent the manufacturers from satisfying that burden. While
the burden of proof does indeed belong to the manufacturers
as the side seeking removal, Morgan v. Gay, 471 F.3d 469,
473 (3d Cir. 2006), we hold that they have met that burden
under these circumstances. With the exception of the
language regarding case management, the entirety of the
Complaint and the Notice to Defend—the documents by
which Plaintiffs initiated this action— contemplate a single
joint trial. Similarly, no effort was made to structure the
action in a way that would preclude CAFA jurisdiction,
which would have been as easy as filing two actions—each
with less than 100 claims—instead of a single action with all
113 claims. Critically, had Plaintiffs made a definitive and
explicit statement limiting coordination of their claims to
pretrial matters, removal would have been prevented.
Instead, we are left with a litany of indications that a joint
trial was proposed and no conclusive countervailing
indication to serve as a rebuttal.
Plaintiffs are provided with a great deal of power in
the CAFA removal context. They have the ability to
2
Notably, a Court of Common Pleas local rule
indicates that “case management” can encompass trial
management. See Pa. Ct. C.P. Phila. Civ. R. 215(A)(2) (“All
jury cases . . . shall be listed for trial . . . in accordance with
the pertinent Case Management Order.”).
12
effectively insulate themselves from CAFA jurisdiction
simply by taking the correct steps in structuring their action.
Plaintiffs must carefully consider how they craft their
complaints and other initial filings, and any intentional efforts
to avoid CAFA jurisdiction should be clear and unambiguous.
Where they opt to file a single complaint containing the
claims of more than 100 plaintiffs, they must be even more
explicit to overcome the presumption that those claims will be
tried jointly. This is especially true where, as in
Pennsylvania, the state’s permissive joinder rules explicitly
presume that persons who join as plaintiffs in a single action
based upon a common question of fact or law will have their
claims tried jointly. Pa. R. Civ. P. 2229, 2231(c); see also
Bullard v. Burlington N. Santa Fe Ry. Co., 535 F.3d 759, 762
(7th Cir. 2008) (examining how Illinois procedural rules treat
joined claims). Ultimately, plaintiffs bear the burden of
clarity in this context.
IV.
Plaintiffs also put forth a non-textual argument
asserting that their motion for admission to the Mass Tort
Program is evidence of their intent to try their claims
separately. Plaintiffs’ conduct undertaken after filing the
Complaint is certainly relevant, as long as that conduct
occurred prior to removal.3 See Scimone, 720 F.3d at 881
(“what is clear from [CAFA’s] text and structure is that the
3
Of course, we ordinarily examine the case at the time
the complaint was filed, see Standard Fire Ins. Co. v.
Knowles, 133 S. Ct. 1345, 1349 (2013), unless subsequent
developments are what triggered removal, see 28 U.S.C. §
1446(b)(3). Such is not the case here.
13
plaintiffs can propose a joint trial, either by naming 100 or
more plaintiffs in a single complaint or by their litigation
conduct at any time prior to defendants’ removal of their
action to federal court”). Even so, the face of the Complaint
and the structure of the action are the best indicators of
whether a joint trial is being sought. A group of plaintiffs
may implicitly or explicitly propose a joint trial later in the
litigation; however, a group of plaintiffs cannot similarly file
a complaint that explicitly or implicitly proposes a joint trial,
only to then rely on their later conduct as evidence that they
had not initially made such a proposal. Applying this
principle, Plaintiffs’ motion for admission to the Mass Tort
Program cannot save them from removal—regardless of its
content or effect—where the structure of their action and
initial filings imply a proposal for a joint trial.
But even if we suspend this principle, Plaintiffs’
motion and potential admission to the Mass Tort Program do
not evince an intention that their claims be tried separately.
Their reliance on admission to the Mass Tort Program to
prove their intent to try the claims separately hinges on their
assertion that they would be unable to try their claims jointly
under the rules of the program. See In re: Mass TORT and
Asbestos Programs, General Court Reg. No. 2012-01, 2011
WL 8771684 (Pa. Com. Pl. 2011) (“Trial Order”). Intent is
certainly pertinent to determining whether Plaintiffs have
proposed a joint trial. See Parson, 749 F.3d at 888 (“[T]he
common usage of the word ‘propose’ involves an intentional
act.”); Scimone, 720 F.3d at 884 (“The more natural reading
of the [mass action] provision is that the plaintiffs must
actually want, or at least intend to bring about, what they are
proposing.”). And a proposal for a joint trial cannot be made
to a court that is unable to effectuate a joint trial under the
14
circumstances. Briggs v. Merck Sharpe & Dohme, 796 F.3d
1038, 1048 (9th Cir. 2015) (“[I]f a court lacks the authority to
grant a request for a joint trial, then plaintiffs cannot
‘propose’ a joint trial by making a request to that court.”).
But the Mass Tort Program does not necessarily prevent
Plaintiffs from trying their claims in a fashion that would
constitute a “joint trial.”
The Trial Order governing the Mass Tort Program, at
least for asbestos cases, does not permit cases involving the
application of law from different states to be tried together,
and it also limits the number of cases that can be jointly tried.
In re: Mass TORT and Asbestos Programs, 2011 WL
8771684. Comparatively, Plaintiffs’ Complaint presents 113
claims with plaintiffs from 28 different states. They
emphasize that they divided the damages portion of their
Complaint into three categories to account for the various
state laws at play. But a joint trial can take a variety of other
forms that would not be precluded by acceptance into the
Mass Tort Program. The Seventh Circuit has succinctly
explained that a joint trial may exist even where less than 100
claims have proceeded to trial or where issue preclusion
might extend to the other claims that have yet to be tried:
[A] joint trial does not have to encompass relief.
For example, a trial on liability could be limited
to a few plaintiffs, after which a separate trial
on damages could be held. Similarly, we have
said that a trial that involved only “10
exemplary plaintiffs, followed by application of
issue or claim preclusion to 134 more plaintiffs
without another trial, is one in which the claims
of 100 or more persons are being tried jointly.”
In short, a joint trial can take different forms as
15
long as the plaintiffs' claims are being
determined jointly.
Abbott Labs., 698 F.3d at 573 (citations omitted).
Several circuits have also held that a “bellwether trial”4
is a form of a joint trial. See, e.g., Atwell, 740 F.3d at 1165–
66; but cf. Briggs, 796 F.3d at 1051 (“a bellwether trial is not,
without more, a joint trial within the meaning of CAFA”).
Bellwether trials appear to be contemplated under the Mass
Tort Program, which is consistent with the way most states
treat mass tort cases. Moreover, while Plaintiffs have divided
their damage claims into categories by state, they make no
such differentiation in terms of liability. Thus, a decision at
trial regarding the manufacturers’ liability may well be
preclusive as to all of Plaintiffs’ claims, even if tried in a
group the size of those permitted under the Mass Tort
Program. See Abbott Labs., 698 F.3d at 573 (a joint trial may
exist where “a trial on liability [is] limited to a few plaintiffs”
and is followed by “a separate trial on damages”). Such a
sequence of events would be regarded as a joint trial, and
because a joint trial is still possible under the rules of the
Mass Tort Program, we do not find Plaintiffs’ motion for
admission to that program to evince an intent to try their
claims separately.
4
“A bellwether trial is a test case that is typically used
to facilitate settlement in similar cases by demonstrating the
likely value of a claim or by aiding in predicting the outcome
of tricky questions of causation or liability.” Briggs, 796 F.3d
at 1051.
16
V.
For the foregoing reasons, the District Court’s Order
dated September 21, 2016, remanding this matter to the Court
of Common Pleas of Philadelphia County will be reversed
and this matter will be remanded to the District Court for
further proceedings.
17