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Ramirez v. Our Lady of Lourdes Hospital at Pasco

United States District Court, Ninth Circuit

September 25, 2013

JUANITA RAMIREZ and ANGEL SANCHEZ RIOS, Plaintiffs,
v.
OUR LADY OF LOURDES HOSPITAL AT PASCO d/b/a LOURDES HEALTH NETWORK, ELTON KERR, MD, JOHNSON & JOHNSON, INC., and ETHICON, INC. Defendants.

ORDER OF REMAND

RICARDO S. MARTINEZ, District Judge.

I. INTRODUCTION

Before the Court are Defendant Our Lady of Lourdes Hospital at Pasco's Motion to Sever (Dkt. ##7, 10); Defendants Johnson and Johnson, Inc. and Ethicon, Inc.'s Motion to Stay All Proceedings (Dkt. #13), and Plaintiffs' Motion to Remand (Dkt. #21). For the reasons that follow, the Court finds that it lacks subject matter jurisdiction over this action. Accordingly the case shall be remanded to King County Superior under Case No. 13-2-192228-8 SEA.

II. BACKGROUND

This case arises from medical complications that Plaintiffs allege resulted from the implantation of a pelvic mesh product. Plaintiffs Juanita Ramirez and Angel Sanchez Rios filed a complaint in King County Superior Court, Case No. 13-2-192228-8 SEA, on May 13, 2013. In the complaint, Plaintiffs asserted medical malpractice claims against Ms. Ramirez's treating physician Dr. Elton Kerr, and Our Lady of Lords Hospital at Pasco ("OLLH"), the hospital where Dr. Kerr performed a "laparoscopic-assisted vaginal hysterectomy with lysis of adhesions and placement of Gynecare TVT in conjunction with a cystoscopy" on Ms. Ramirez. Dkt. #2, p. 27 (Compl. at ¶ 8). Plaintiffs also named Johnson and Johnson, Inc. and its wholly owned subsidiary Ethicon, Inc. (collectively "J&J") as defendants in the state court action for product liability claims related to J&J's Gynecare TVT pelvic mesh product.

J&J removed the action from state court pursuant to 28 U.S.C. § 1441(a) and § 1446, invoking this Court's jurisdiction on diversity grounds under 28 U.S.C. § 1332. Dkt. #1. This section creates federal jurisdiction over state law causes of action when the parties are diverse in citizenship and the amount in controversy exceeds $75, 000. 28 U.S.C. § 1332(a), (b). They contend that although Dr. Kerr and OLLH are alleged to be Washington residents, they should be ignored for purposes of diversity jurisdiction because they were fraudulently misjoined. Dkt. #1, p. 2. After removal, OLLH filed a motion to sever the product liability claims from the medical malpractice claims. Dkt. ##7, 10. Dr. Kerr later joined the motion to sever. Dkt. #17.

On June 28, 2013, J&J moved for a stay of all proceedings pending a transfer of the action to MDL No. 2327 in the Southern District of West Virginia ( In re Ethicon, Inc., Pelvic Repair Sys. Prods. Liab. Litig., MDL No. 2327, 2012 WL 432533). Dkt. #13. On July 23, 2013, Plaintiffs moved to remand the action back to King County Superior Court. Dkt. #21. According to the parties, the United States Judicial Panel on Multidistrict Litigation ("JPML") issued a Conditional Transfer Order ("CTO") after the J&J Defendants notified it of this action. Plaintiffs and OLLH (joined by Dr. Kerr) have filed motions to vacate the CTO, which the JPML has set for consideration at a hearing session scheduled for September 26, 2013. Dkt. #49, p. 1.

III. DISCUSSION

The parties disagree about the order in which this Court should consider the motions pending before it. Plaintiffs contend that the Court should turn first to the question of whether it has jurisdiction over this action. Dr. Kerr and OLLH contend that the Court should consider the motion to sever before determining jurisdiction. Lastly, J&J contends that this Court should stay the action so that the JPML can determine whether federal jurisdiction is proper.

Courts in the Ninth Circuit have resolved this issue differently. For example, the Central and Eastern Districts of California have recently issued two divergent opinions in cases involving motions to remand and to stay proceedings pending transfer to MDL No. 2327. Compare Perry v. Luu, Case No. C13-729-AWI-JLT, 2013 WL 3354446 (C.D. Cal. July 3, 2013) (considering jurisdiction first and finding remand proper) with Rubio v. Arndal, Case No. C13-27-LJO-BAM, 2013 WL 796669 (E.D. Cal. March 4, 2013) (considering motion to stay first and finding motion to remand moot). Notwithstanding this current lack of consensus, district courts are courts of limited jurisdiction and they are obligated to determine whether they have jurisdiction over a particular action. Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 377 (1994). In the Ninth Circuit, "federal courts normally must resolve questions of subject matter jurisdiction before reaching other threshold issues." Potter v. Hughes, 546 F.3d 1051, 1061 (9th Cir. 2008). Moreover, "a district judge should not automatically stay discovery, postpone rulings on pending motions, or generally suspend further rulings upon a parties' [sic] motion to the MDL Panel for transfer and consolidation." Rivers v. Walt Disney Co., 980 F.Supp. 1358, 1360 (C.D. Cal. 1997); JPML Rule 2.1(d) ("[t]he pendency of... a conditional transfer order... before the Panel pursuant to 28 U.S.C. § 1407 does not affect or suspend orders and pretrial proceedings in any pending federal district court action and does not limit the pretrial jurisdiction of that court"). Thus, the Court shall first address the jurisdictional issue.

A. Legal Standard for Motion to Remand

District courts have original jurisdiction over actions where the parties are citizens of different states and the amount in controversy exceeds $75, 000. 28 U.S.C. § 1331(a). The "burden of establishing federal jurisdiction is on the party seeking removal, and the removal statute is strictly construed against removal jurisdiction." Prize Frize, Inc. v. Matrix Inc., 167 F.3d 1261, 1265 (9th Cir. 1999). Any doubt as to the right of removal is resolved in favor of remand. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). Here, both Plaintiffs and Defendants Dr. Kerr and OLLH are alleged to be citizens of Washington, which would ordinarily result in a finding that the case was improperly removed. The removing Defendants- J&J - contend that because Dr. Kerr and OLLH were fraudulently misjoined, complete diversity exists between Plaintiffs and J&J, the only properly joined Defendants.

B. Fraudulent Misjoinder

Federal Rule of Civil Procedure 20, which governs permissive joinder of parties, ...


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