Sandra Kirkland v. Wyeth

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 09-1205
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In re: Prempro Products Liability *
Litigation, *
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*
Sandra Kirkland; Patricia Lawton- *
Wilson; Monica Lee; Katherine *
Maiello; Dorothy Mallette; Nola *
McAdoo; Lillian Meeks; Brenda *
Nicholson; Joanne Nickel; Barbara *
Norvell; Reva Orr; Regina Parker; * Appeals from the United States
April Patterson; Kathleen Perkinson; * District Court for the
Donna Peters; Joanne Peterson; Mary * Eastern District of Arkansas.
Phillips; Viola Plieseis; Joyce *
Podhayski; Kathleen Preston; Lydia *
Ross; Diane Simon; Ruth Sitzmann; *
Mary Sorenson; Flora Spencer; Sue *
Standriff; Patricia Stone; Tena *
Valentine; Diana Walters; Marion *
Walters; Judy Wegenast; Charlene *
Weinmann; Helen Whaley; Marilyn *
Will; Francine Wixen; Joyce Wood, *
*
Plaintiffs-Appellants, *
*
Joyce Yonushewski, *
*
Plaintiff, *
*
Phyllis Goode; Carol Haney; Patricia *
Kruse; Sally Laufketter; Ann Moran; *
Judith Petersen; Patricia Rogers; Jewell *
Tolkin; Donna Wheeler; Charlene *
McComas; Muriel Pitsinger; Ruby *
Robbins; Mary Steele; Donna Taube; *
Joyce Waugh; Alba Cordon; Bertha *
Watcher; Joan Thompson, *
*
Plaintiffs-Appellants, *
*
Nancy States; Anna Soloman, *
*
Plaintiffs, *
*
v. *
*
Wyeth, and its divisions; Wyeth *
Pharmaceuticals, Inc.; ESI Lederle; *
Pfizer, Inc.; Pharmacia & Upjohn *
Company; Pharmacia Corporation; *
Barr Laboratories, Inc.; Mead *
Johnson & Company; Solvay *
Pharmaceuticals; Novartis *
Pharmaceuticals Corporation; Watson *
Laboratories, Inc.; Greenstone Ltd.; *
Does 1-10, *
*
Defendants-Appellees. *
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No. 09-1250
___________
In re: Prempro Products Liability *
Litigation, *
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*
*
Rick Jasperson, as Trustee for Next-of- *
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Kin Decedents Gail Gilliam, Marcia *
Kunkel, Elizabeth Roszak, Mary Solis, *
Bea Zissel a/k/a Phyllis Bea Zissel, *
*
Plainiff-Appellant, *
*
v. *
*
Wyeth, and its divisions; Wyeth *
Pharmaceuticals, Inc.; ESI Lederle; *
Pfizer, Inc.; Pharmacia & Upjohn *
Company; Pharmacia Corporation; *
Does 1-10, *
*
Defendants-Appellees. *
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No. 09-1373
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Dorothy Allen; Judith Allen; Loretta *
Andrews; Janet Arbogast; Karen *
Awald; Carol Bannerman; Phyllis *
Barnes; Joanne Barrett; Joanne Black; *
Mary Bowden; Hazel Burgess; Joyce *
Burpee; Virginia Campbell; Adrianne *
Carrera; Lois Carter; Margaret *
Chamness; Mary Chrisco; Peggy *
Clemons; Sally Collins; Barbara *
Couch; Mary Dawson; Lois Duffy; *
Linda Eells; Frances Farr; Marjorie *
Flaman; Margaret Foltz; Wanda Foltz; *
Delois Foster; Jo Garrison O’Neil; *
Sharon Haemker; Margaret Harris; *
Louise Hess; Wanda Hinceman; Alice *
Holtzman; Rita Hren; Nancy Hunter; *
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Yvonne Hutchinson; Glenda Ivey; *
Doris Jerome; Grace Kiger; Patsy *
Anderson; Juanita Brouwer; Nata *
Cargan; Nancy Jo Carter; Jan Costa *
Rydjeske; Wilma Cowart; Patricia *
Fernau; Isabel Fragoso; Doris Gist; *
Helen Penny Aros, *
*
Plaintiffs-Appellants, *
*
Patricia Brunner, *
*
Plaintiff, *
*
Joan Casto; Marian Conner; Janet *
Edwards; Wilma Faulkner; Nancy *
Katte; Nan Maury; Betty Bethea, *
*
Plaintiffs-Appellants, *
*
Rachel Epstein; Marguerite *
Hjalmarson, *
*
Plaintiffs, *
*
v. *
*
Wyeth, and its divisions; Wyeth *
Pharmaceuticals, Inc.; ESI Lederle; *
Pfizer, Inc.; Pharmacia & Upjohn *
Company; Pharmacia Corporation; *
Barr Laboratories, Inc.; Mead Johnson *
& Company; Greenstone Ltd.; Does *
1-10, *
*
Defendants-Appellees. *
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___________
Submitted: September 24, 2009
Filed: January 6, 2010
___________
Before MURPHY, BRIGHT and RILEY, Circuit Judges.
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BRIGHT, Circuit Judge.
The plaintiffs, women and next-of-kin of deceased women, sued a number of
manufacturers of hormone replacement therapy drugs, asserting the drugs caused
breast cancer. The defendants, manufacturers of hormone replacement therapy drugs
(“manufacturers”), removed the cases to federal court. The plaintiffs moved to
remand to state court on the grounds that complete diversity of citizenship was
lacking, thereby depriving the court of subject matter jurisdiction. The district court
concluded that the plaintiffs’ claims were misjoined to defeat diversity jurisdiction,
dropped the non-diverse plaintiffs, and dismissed these cases. Plaintiffs appeal, and
we reverse the district court’s orders denying plaintiffs’ motions to remand and
granting the manufacturers’ motions to dismiss duplicative cases.
I. BACKGROUND
A. Hormone Replacement Therapy
Hormone replacement therapy (“HRT”) drugs are used in the treatment of
menopausal symptoms. Such symptoms include hot flashes, chills, headache,
irritability, and vaginal atrophy. HRT drugs consist of a combination of estrogen and
progestin. The Women’s Health Initiative (WHI), a group focused on defining the
risks and benefits of strategies that could reduce heart disease, cancer, and fractures
in post-menopausal women, began studying the effects of HRT drugs in the 1990s.
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The WHI enrolled 161,809 post-menopausal women between 50 and 79 years of age
into a set of clinical trials.
WHI studied the effect of estrogen plus progestin in 16,608 women with an
intact uterus. Women were either assigned a daily dose of estrogen plus progestin or
a placebo. In 2002, an independent data and safety monitoring board revealed that the
number of cases of breast cancer in the estrogen plus progestin group had crossed the
boundary established as a signal of increased risk. The independent board
recommended that the trial be ended early based on an increased breast cancer risk.
The results of the WHI study were published in The Journal of the American Medical
Association. See Risks and Benefits of Estrogen Plus Progestin in Healthy
Postmenopausal Women, 288 J. Am. Med. Ass’n. 321-333 (2002), available at
http://jama.ama-assn.org/cgi/content/full/288/3/321.
B. The Lawsuits
This case concerns three lawsuits. The Kirkland suit was brought by 57 women
who each alleged injuries resulting from their use of HRT medications. The Kirkland
plaintiffs alleged they each developed breast cancer after taking HRT drugs that were
manufactured, marketed, and sold by one or more of eleven manufacturers. Fourteen
Kirkland plaintiffs are citizens of the same state as at least one of the manufacturers.
Three of those fourteen plaintiffs asserted claims against manufacturers with the same
citizenship. For example, Nancy States is a citizen of Pennsylvania, the same state as
Wyeth Pharmaceuticals, Inc., a company that manufactured and marketed HRT drugs
she took.
The Jasperson suit was brought by Rick Jasperson, as trustee of the next-of-kin
of six decedents who used HRT drugs. The Jasperson plaintiffs alleged that in each
case, the next-of-kin sustained injuries when a woman family member developed
breast cancer as a result of taking HRT drugs that were manufactured, marketed, and
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sold by one or more of six defendants. One of the six decedents, Elizabeth
Mendelson, was a citizen of New Jersey, the same state as Pharmacia Corporation,
Wyeth, and Pharmacia & Upjohn Company, companies that manufactured and
marketed HRT drugs that Mendelson took.
The Allen suit was brought by 60 women who also alleged they each developed
breast cancer as a result of HRT medications manufactured, marketed, and sold by one
or more of eight defendants. Five Allen plaintiffs are citizens of the same state as at
least one of the defendants. Three of these five plaintiffs asserted claims against
manufacturers who were citizens of the same state. For example, Rachel Epstein is
a citizen of New York, the same state as Pfizer, a company that manufactured and
marketed HRT drugs that she took.
C. Procedural History
The Kirkland, Jasperson, and Allen plaintiffs filed suits for damages in
Minnesota state court in July 2008. In each of the three consolidated cases, the
plaintiffs alleged they or a decedent family member had developed breast cancer from
taking HRT medications. The plaintiffs asserted state law claims for negligence, strict
liability, breach of implied warranty, breach of express warranty, fraud, negligent
misrepresentation, and statutory violations of the False and Misleading Advertising
Act, the Prevention of Consumer Fraud Act, and the Uniform Deceptive Trade
Practices Act.
The manufacturers removed all three cases to the United States District Court
for the District of Minnesota. In the manufacturers’ removal petitions, they argued
diversity jurisdiction existed under the fraudulent misjoinder doctrine. They alleged
that the plaintiffs joined their claims together against the manufacturers to defeat
diversity jurisdiction. The manufacturers argued that the plaintiffs’ claims were
fraudulently misjoined, stating that those claims did not arise out of the same
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transaction or occurrence, a requirement for joinder under Federal Rule of Civil
Procedure 20(a).
The plaintiffs filed motions to remand the cases to state court for lack of subject
matter jurisdiction, asserting that complete diversity between the plaintiffs and
defendants did not exist. Before the plaintiffs’ motions were addressed, the litigation
came before the United States Judicial Panel on Multidistrict Litigation (“MDL”).
The Kirkland and Jasperson cases were transferred to the Eastern District of Arkansas
and assigned to an MDL judge. Plaintiffs requested that the MDL court rule on their
pending motions to remand to state court.
Before the MDL court ruled on the question of remand, on December 19, 2008,
the manufacturers moved to dismiss most of the claims brought by the Kirkland
plaintiffs and all of the claims brought on behalf of the Jasperson decedents on the
grounds that the plaintiffs’ claims were duplicative of earlier filed California claims.1
Plaintiffs’ oppositions to the motions were due on December 30, 2008, and they
requested an extension of time to reply to the manufacturers’ motions to dismiss.
On December 29, 2008, the court denied plaintiffs’ requests for an extension,
stating that it “did not grant your Motion for Extension of Time to Respond, because
I’m satisfied that you couldn’t say anything that would change my mind on the issues
involved here.” On that same day, the court denied in part plaintiffs’ motions to
remand the Kirkland and Jasperson cases to state court, concluding that the plaintiffs
were misjoined. The court stated that there was no reason for the joinder of the non-
diverse plaintiffs other than to defeat diversity jurisdiction, and explained
MDL courts have repeatedly held that misjoined plaintiffs will not defeat
diversity . . . .
1
The California lawsuits had also been transferred to an MDL court.
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[E]ven if a non-diverse plaintiff [has] a valid cause of action against a
defendant, that plaintiff may not prevent removal based on diversity of
citizenship if there is no reasonable basis for the joinder of that non-
diverse plaintiff with the other plaintiffs. (Quotations omitted).
Appellants’ Add. at 134-35.
The court concluded that the plaintiffs had failed to properly join under Rule
20 because “[t]he only thing common among Plaintiffs is that they took an HRT drug
-- but not necessarily the same HRT drug. Plaintiffs are residents of different states
and were prescribed different HRT drugs by different doctors, for different lengths of
time, in different amounts, and they suffered different injuries.” Id. at 135.
The court granted four of the Kirkland and Jasperson plaintiffs’ motions to
remand because those plaintiffs had asserted claims against a defendant who was from
the same state. The court denied 59 Kirkland and Jasperson plaintiffs’ motions to
remand because the plaintiffs were not asserting claims against manufacturers from
the same state. The court granted the manufacturers’ motions to dismiss as to these
59 plaintiffs. The court dropped the 59 plaintiffs from the lawsuit and dismissed their
claims, because they duplicated previously-filed California claims.
On December 30, 2008, the plaintiffs moved pursuant to Rule 59(e) to alter or
amend the December 29 orders of dismissal. The plaintiffs argued that the court
improperly dismissed the cases without giving them an opportunity to respond to the
motions, and the court abused its discretion by dismissing the cases rather than staying
the Minnesota actions pending disposition of the California cases. The district court
denied the Rule 59(e) motions on December 30, 2008.
In February 2009, the United States Judicial Panel on MDL transferred the
Allen case to the same MDL court for coordinated proceedings with other pending
HRT cases. On February 10, 2009, plaintiffs refiled their motions to remand the Allen
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case to state court. The court denied the motions on that same day, stating that the
plaintiffs were improperly joined under Rule 20 and that he could “see no reason for
the joinder of the non-diverse plaintiffs other than to defeat diversity jurisdiction.”
Id. at 383. The court granted three of the Allen plaintiffs’ motions to remand because
those women had asserted claims against a manufacturer who was from the same state.
The court granted the manufacturers’ motions to dismiss as to the remaining 57
plaintiffs. The court dropped the remaining 57 plaintiffs from the lawsuit and
dismissed their claims because of their duplicative cases.
As a result of the district court’s orders in Kirkland, Jasperson, and Allen, seven
plaintiffs’ cases were remanded to state court and the remaining 116 plaintiffs were
dropped from the litigation and their cases were dismissed.
The dismissed plaintiffs2 appeal (1) the district court’s December 29, 2008,
orders and judgments denying plaintiffs’ motions to remand to state court and granting
defendants’ motions to dismiss duplicative cases; and (2) the district court’s December
30, 2008, orders on plaintiffs’ Rule 59(e) motions to alter or amend the final orders
of dismissal. Plaintiffs argue the district court: (1) erred in denying their motions to
remand to state court when it adopted the fraudulent misjoinder doctrine; (2) erred by
dismissing the plaintiffs from the cases without giving them a reasonable opportunity
to be heard; and (3) abused its discretion by refusing to stay the duplicative Minnesota
claims pending final resolution of the California claim. We reverse on the first issue,
thus we need not address the final two issues.
2
The plaintiffs whose cases were remanded to state court are not parties to these
appeals.
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II. DISCUSSION
On appeal, the plaintiffs argue the district court erred in denying their motions
to remand by applying a discredited theory known as “fraudulent misjoinder”3 when
it concluded they were improperly joined to defeat diversity jurisdiction.
“We review the district court’s denial of the remand motion de novo.” Menz
v. New Holland North America, Inc., 440 F.3d 1002, 1004 (8th Cir. 2006); see also
Wilkinson v. Shackelford, 478 F.3d 957, 963 (8th Cir. 2007) (“Whether a plaintiff has
fraudulently joined a party to defeat diversity jurisdiction is a question of subject
matter jurisdiction we review de novo.”).
A defendant may remove a state law claim to federal court only if the action
originally could have been filed there. Phipps v. FDIC, 417 F.3d 1006, 1010 (8th Cir.
2005). Diversity jurisdiction under 28 U.S.C. § 1332 requires an amount in
controversy greater than $75,000 and complete diversity of citizenship among the
litigants. 28 U.S.C. § 1332(a). “Complete diversity of citizenship exists where no
defendant holds citizenship in the same state where any plaintiff holds citizenship.”
OnePoint Solutions, LLC v. Borchert, 486 F.3d 342, 346 (8th Cir. 2007).
After removal, a plaintiff may move to remand the case to state court, and the
case should be remanded if it appears that the district court lacks subject matter
jurisdiction. 28 U.S.C. § 1447(c). The defendant bears the burden of establishing
federal jurisdiction by a preponderance of the evidence. Altimore v. Mount Mercy
College, 420 F.3d 763, 768 (8th Cir. 2005). All doubts about federal jurisdiction
should be resolved in favor of remand to state court. Wilkinson, 478 F.3d at 963.
3
Some courts refer to this judicially-created doctrine as “procedural
misjoinder.”
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Courts have long recognized fraudulent joinder as an exception to the complete
diversity rule. See 14B Charles Alan Wright et al., Federal Practice and Procedure
§ 3723, at 788-789 (4th ed. 2009). Fraudulent joinder occurs when a plaintiff files a
frivolous or illegitimate claim against a non-diverse defendant solely to prevent
removal. Filla v. Norfolk S. Ry. Co., 336 F.3d 806, 809 (8th Cir. 2003). When
determining if a party has been fraudulently joined, a court considers whether there
is any reasonable basis in fact or law to support a claim against a nondiverse
defendant. Wilkinson, 478 F.3d at 964.
A more recent, somewhat different, and novel exception to the complete
diversity rule is the fraudulent misjoinder doctrine which one appellate court4 and
several district courts5 have adopted. Fraudulent misjoinder
occurs when a plaintiff sues a diverse defendant in state court and joins
a viable claim involving a nondiverse party, or a resident defendant, even
though the plaintiff has no reasonable procedural basis to join them in
4
Although the Eleventh Circuit is the only federal appellate court to adopt
fraudulent misjoinder, see Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353, 1360
(11th Cir. 1996), abrogated on other grounds by, Cohen v. Office Depot, Inc., 204
F.3d 1069 (11th Cir. 2000), the Fifth and Ninth Circuits have acknowledged it,
although not expressly adopted it. See In re Benjamin Moore & Co., 309 F.3d 296,
298 (5th Cir. 2002) (citing Tapscott, 77 F.3d at 1360) (“[I]t might be concluded that
misjoinder of plaintiffs should not be allowed to defeat diversity jurisdiction.”); In re
Benjamin Moore & Co., 318 F.3d 626, 630-31 (5th Cir. 2002) (“[W]ithout detracting
from the force of the Tapscott principle that fraudulent misjoinder of plaintiffs is no
more permissible than fraudulent misjoinder of defendants to circumvent diversity
jurisdiction, we do not reach its application in this case.”); California Dump Truck
Owners Ass’n v. Cummins Engine Co., Inc., 24 Fed. Appx. 727, 729 (9th Cir. 2001)
(“For purposes of discussion we will assume, without deciding, that this circuit would
accept the doctrines of fraudulent and egregious joinder as applied to plaintiffs.”).
5
See, e.g., Coleman v. Conseco, Inc., 238 F. Supp. 2d 804 (S.D. Miss. 2002);
Greene v. Wyeth, 344 F. Supp. 2d 674 (D. Nev. 2004); Smith v. Nationwide Mut. Ins.
Co., 286 F. Supp. 2d 777 (S.D. Miss. 2003).
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one action because the claims bear no relation to each other. In such
cases, some courts have concluded that diversity is not defeated where
the claim that destroys diversity has “no real connection with the
controversy” involving the claims that would qualify for diversity
jurisdiction.
Ronald A. Parsons, Jr., Should the Eighth Circuit Recognize Procedural Misjoinder?,
53 S.D. L. Rev. 52, 57 (2008).
The Eleventh Circuit first considered and adopted the fraudulent misjoinder
doctrine in Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353, 1360 (11th Cir. 1996).
Tapscott concerned a putative class action filed in Alabama state court. Id. at 1355.
In the initial complaint, one Alabama plaintiff sued four defendants, one of whom was
an Alabama resident. Id. The first amended complaint added sixteen named plaintiffs
and twenty-two named defendants. Id. The plaintiffs then amended their complaint
again, naming four additional plaintiffs, all Alabama residents, and three named
defendants. Id. One of those defendants, Lowe’s Home Centers, was a North
Carolina resident. Id.
The initial complaint and first amended complaint alleged fraud violations
arising from the sale of automobile service contracts. Id. The second amended
complaint alleged fraud violations arising from the sale of extended service contracts
in connection with the sale of retail products. Id. The result of the amended
complaints and joinder under Rule 20 was to create two distinct groups of plaintiffs
and defendants: the non-diverse “automobile class” and the diverse “merchant class.”
Id. at 1359-60, n.16.
Lowe’s Home Centers removed the case to federal court and moved to sever the
claims against it from the claims against the automobile class defendants. Id. at 1355.
The plaintiffs moved to remand to state court for lack of federal subject matter
jurisdiction. Id. The district court granted Lowe’s Home Centers’ motion to sever
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and denied the plaintiffs’ motion to remand to state court, holding that there was “no
allegation of joint liability between Lowe’s and any other defendant and no allegation
of conspiracy” and “there was an improper and fraudulent joinder, bordering on a
sham.” Id. at 1360 (internal quotations omitted).
On appeal, the Eleventh Circuit Court of Appeals affirmed the district court’s
denial of the plaintiffs’ motion to remand. Id. The court held there was misjoinder
under Rule 20 because there was “no real connection” between the two sets of alleged
transactions. Id. The court reasoned that the alleged transactions concerning the
automobile class were wholly distinct from the transactions involving the merchant
class. Id. The only similarity between the two classes was that both classes violated
particular fraud provisions in the Alabama state code. Id. The Eleventh Circuit
cautioned that “mere misjoinder” is not fraudulent misjoinder. Id. However, the
plaintiffs’ joinder of these two groups of unrelated defendants was “so egregious as
to constitute fraudulent joinder.” Id. Therefore, the Eleventh Circuit reasoned that the
district court did not err in concluding the plaintiffs attempted to defeat diversity
jurisdiction by misjoinder. Id.
Courts’ reactions to Tapscott have been mixed. Some district courts have
adopted the doctrine as a means of ensuring defendants their statutory right of removal
to the federal courts and precluding plaintiffs from preventing removal to federal
court. See, e.g., In re Diet Drugs, No. 98-20478, 1999 WL 554584, at *3 (E.D. Pa.
July 16, 1999) (unreported) (explaining that plaintiffs’ egregious misjoinder
“wrongfully deprives Defendants of their right of removal.”); Reed v. American
Medical Sec. Group, Inc., 324 F. Supp. 2d 798, 805 (S.D. Miss. 2004) (adopting the
fraudulent misjoinder doctrine because “diverse defendants ought not be deprived of
their right to a federal forum by such a contrivance as this.”). See also Laura J. Hines
& Steven S. Gensler, Driving Misjoinder: The Improper Party Problem in Removal
Jurisdiction, 57 Ala. L. Rev. 779, 825 (2006) (explaining that fraudulent misjoinder
protects access to federal courts).
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Other courts have criticized Tapscott, arguing that questions of joinder under
state law do not implicate federal subject matter jurisdiction, federal jurisdiction is to
be narrowly construed, and the fraudulent misjoinder doctrine has created an
unpredictable and complex jurisdictional rule. See, e.g., Osborn v. Metropolitan Life
Ins. Co., 341 F. Supp. 2d 1123, 1127 (E.D. Cal. 2004) (rejecting fraudulent misjoinder
because “the last thing the federal courts need is more procedural complexity.”);
Rutherford v. Merck & Co., 428 F. Supp. 2d 842, 851 (S.D. Ill. 2006) (holding that
Tapscott is an improper expansion of federal diversity jurisdiction, and misjoinder
should be resolved by a state court); 14B Charles Alan Wright et al., Federal Practice
and Procedure § 3723, at 876 (4th ed. 2009) (explaining that fraudulent misjoinder
adds “a level of complexity – and additional litigation – to a federal court’s decision
regarding removal.”).
The Eighth Circuit Court of Appeals has not yet considered the fraudulent
misjoinder doctrine. See Parsons, supra, at 60. We make no judgment on the
propriety of the doctrine in this case, and decline to either adopt or reject it at this
time. Rather, on the record in this case, we conclude that even if we adopted the
doctrine, the plaintiffs’ alleged misjoinder in this case is not so egregious as to
constitute fraudulent misjoinder.
Rule 20(a)(1), Federal Rules of Civil Procedure, allows multiple plaintiffs to
join in a single action if (i) they assert claims “with respect to or arising out of the
same transaction, occurrence, or series of transactions or occurrences;” and (ii) “any
question of law or fact common to all plaintiffs will arise in the action.”6 In
6
Whether the federal or state rules on joinder apply has also received conflicting
results post-Tapscott. Compare Tapscott, 77 F.3d at 1360 (applying, without analysis,
the federal rules of joinder to determine that the plaintiffs egregiously misjoined the
defendants), and Brooks v. Paulk & Cope, Inc., 176 F. Supp. 2d 1270, 1274 (M.D.
Ala. 2001) (applying the Federal Rules of Civil Procedure), with Osborn, 341 F. Supp.
2d at 1128 (“[M]ost courts looking at this issue have applied the state rule. This seems
the better choice since the question is whether the parties were misjoined in state
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construing Rule 20, the Eighth Circuit has provided a very broad definition for
the term “transaction.” As stated in Mosley v. General Motors Corp., 497 F.2d 1330
(8th Cir. 1974):
“Transaction” is a word of flexible meaning. It may
comprehend a series of many occurrences, depending not
so much upon the immediateness of their connection as
upon their logical relationship.
Accordingly, all “logically related” events entitling a person to institute
a legal action against another generally are regarded as comprising a
transaction or occurrence. The analogous interpretation of the terms as
used in Rule 20 would permit all reasonably related claims for relief by
or against different parties to be tried in a single proceeding. Absolute
identity of all events is unnecessary.
Id. at 1333 (citations omitted); see also 7 Charles A. Wright et al., Federal Practice
and Procedure, § 1653, at 415 (3d ed. 2001) (explaining that the transaction/
occurrence requirement prescribed by Rule 20(a) is not a rigid test and is meant to be
“read as broadly as possible whenever doing so is likely to promote judicial
economy.”).
After considering the Rule 20 joinder standards, we conclude that the
manufacturers have not met their burden of establishing that plaintiffs’ claims are
court.”), and Asher v. Minnesota Mining and Mfg. Co., No. 04CV522KKC, 2005 WL
1593941, at *6 (E.D. Ky. June 30, 2005) (unreported) (stating that more courts apply
state procedural rules). However, we decline to address this choice of law issue
because the standards for joinder under Fed. R. Civ. P. 20 and Minn. R. Civ. P. 20.01
are identical in all significant respects, and application of the state joinder rules does
not affect our analysis. Therefore, for purposes of this case only, we apply the federal
rules in addressing the misjoinder allegation.
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egregiously misjoined.7 Plaintiffs’ claims arise from a series of transactions between
HRT pharmaceutical manufacturers and individuals that have used HRT drugs.
Plaintiffs allege the manufacturers conducted a national sales and marketing campaign
to falsely promote the safety and benefits of HRT drugs and understated the risks of
HRT drugs. Plaintiffs contend their claims are logically related because they each
developed breast cancer as a result of the manufacturers’ negligence in designing,
manufacturing, testing, advertising, warning, marketing, and selling HRT drugs.
Some of the plaintiffs allege to have taken several HRT drugs made by different
manufacturers.
Furthermore, given the nature of the plaintiffs’ claims, this litigation is likely
to contain common questions of law and fact. See Hines & Gensler, supra, at 822
(“When plaintiffs join together to sue a defendant based on the purchase of a common
product or having engaged in a common transaction, it seems rather clear that their
claims will involve some common question of law or fact.”). One such common
question might be the causal link between HRT drugs and breast cancer. Causation
for all of the plaintiffs’ claims will likely focus on the 2002 WHI study suggesting a
link between HRT drugs and breast cancer and whether the manufacturers knew of the
dangers of HRT drugs before the publication of that study.
Based on the plaintiffs’ complaints, we cannot say that their claims have “no
real connection” to each other such that they are egregiously misjoined. See Tapscott,
77 F.3d at 1371. This is unlike Tapscott where the alleged transactions concerning
the automobile class were wholly distinct from the transactions involving the
merchant class and there was “no real connection” between the two sets of
transactions. Id. Here, there may be a palpable connection between the plaintiffs’
7
We observe that the district court determined that removal was proper because
the plaintiffs failed to meet the requirements of Fed. R. Civ. P. 20(a). But it was the
manufacturers’ burden as the removing party to prove that federal jurisdiction exists.
See Altimore, 420 F.3d at 768.
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claims against the manufacturers as they all relate to similar drugs and injuries and the
manufacturers’ knowledge of the risks of HRT drugs.
Furthermore, the manufacturers have presented no evidence that the plaintiffs
joined their claims to avoid diversity jurisdiction. “[T]he majority of courts demand
more than simply the presence of nondiverse, misjoined parties, but rather a showing
that the misjoinder reflects an egregious or bad faith intent on the part of the plaintiffs
to thwart removal.” Hines & Gensler, supra, at 803. Without any evidence that the
plaintiffs acted with bad faith, we decline to conclude they egregiously misjoined their
claims.
We clarify that we make no judgment on whether the plaintiffs’ claims are
properly joined under Rule 20. See Moore v. SmithKline Beecham Corp., 219 F.
Supp. 2d 742, 746 (N.D. Miss. 2002) (“Of course, the court is not faced with and
expresses no opinion as to the issue of whether joinder is proper in this case; rather,
the court’s task is solely to determine whether the Plaintiffs are so egregiously
misjoined that fraudulent joinder has taken place.”). It may be that the plaintiffs’
claims are not properly joined, and it has been suggested that the proper procedure
may be for the manufacturers to argue that to the state court.8 See Johnson v. Glaxo
Smith Kline, 214 F.R.D. 416, 421 (S.D. Miss. Mar. 29, 2002) (holding that even if
defendants are correct that plaintiffs’ claims are improperly joined, the issue of “mere
misjoinder” is more appropriately addressed to the state district court). However, it
8
Considering the uncertainty surrounding the propriety of the joinder of
plaintiffs’ claims, the preferable course of action may have been for defendants to
challenge the misjoinder in state court before it sought removal. See 14B Charles A.
Wright et al., Federal Practice and Procedure § 3723, at 658 (3d ed. 1998) (“[T]he
fraudulent-joinder doctrine and its allied jurisprudence adds a further level of
complexity – and additional litigation – to a federal court’s decision regarding
removal jurisdiction . . . . In many situations this confusion easily could be avoided
by having the removing party challenge the misjoinder in state court before seeking
removal.”).
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is not clear that the joinder is so egregious and grossly improper under the broadly-
interpreted joinder standards that it warrants an adoption and application of the
fraudulent misjoinder doctrine. See Walton v. Tower Loan of Miss., 338 F. Supp. 2d
691, 695 (N.D. Miss. 2004) (“[F]or Tapscott to be applicable, this court would be
required to find a level of misjoinder that was not only improper, but grossly improper
. . . .”). Therefore, absent evidence that plaintiffs’ misjoinder borders on a “sham,”
see Tapscott, 77 F.3d at 1360, we decline to apply Tapscott to the present case.
III. CONCLUSION
Because the joinder of claims in this case does not constitute egregious
misjoinder, complete diversity does not exist and the district court erred in denying
plaintiffs’ motions to remand to state court. We reverse the district court’s orders and
judgments granting in part and denying in part plaintiffs’ motions to remand to state
court and instruct the district court to remand all of the cases to Minnesota state court
for lack of diversity jurisdiction. Because the district court lacked jurisdiction to act
in this matter, we also vacate the district court’s orders granting the manufacturers’
motions to dismiss the duplicative cases.9
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9
We need not consider plaintiffs’ remaining claims because resolution of the
fraudulent misjoinder issue renders resolution of any other claims unnecessary.
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