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Product Liability Suit for Zoloft Birth Defects Proceeds in State Court


Nineteen families filed a single complaint in West Virginia state court alleging products liability and negligence claims against three pharmaceutical companies. The families alleged that the prescription antidepressant sertraline hydrochloride, branded as Zoloft, caused birth defects to each child born of a pregnancy where the mother ingested Zoloft.

 

Instead of filing the complaint as a single civil action, the clerk of court, pursuant to West Virginia Rule of Civil Procedure 3(a), docketed each family separately, resulting in nineteen distinct actions, one action for each family named in the complaint. The clerk assigned each family a civil action number and charged them a separate filing fee. However, the families were not required to file separate complaints.

 

The pharmaceutical companies interpreted Rule 3(a) to mean that nineteen distinct actions existed. The pharmaceutical companies were corporations organized under Delaware law and with principle places of business in New York and New Jersey. Eighteen of the families were diverse from the pharmaceutical companies. One family included citizens of New York. Based upon their reading of Rule 3(a) and because eighteen of the nineteen families were completely diverse from all of the pharmaceutical companies, the pharmaceutical companies removed all but the non-diverse family to the United States District Court for the Southern District of West Virginia. The non-diverse case remained pending in state court. The eighteen removed families filed individual motions to remand in the district court.

 

The pharmaceutical companies argued that removal was proper because the actions, when analyzed individually, showed that each plaintiff was diverse from each defendant. The families argued that the action is a single case and that the families were treated separately only for administrative purposes, which had no bearing on the diversity jurisdiction analysis. The state court held that administrative separation of claims in state court did not determine the propriety of joinder in federal court.

 

After concluding that the action was really one civil action for purposes of diversity jurisdiction, the district court then addressed the pharmaceutical companies' alternative argument, that even if the case can be viewed as a single case, the New York family, the only non-diverse plaintiff, was fraudulently joined. The fraudulent joinder doctrine provides an exception to the complete diversity requirement. Thus, if the New York family was fraudulently joined, the district court had jurisdiction. To establish fraudulent joinder, the district court required the pharmaceutical companies to show that the families failed to meet either or both of the requirements for joinder, namely: (1) the claims must arise out of the same transaction, series of transactions, or occurrence, and (2) some question of law or fact common to all parties must be present.

 

The district court ultimately found that the families met both requirements. First, the claims were logically related and arise from the same series of transactions or occurrences—namely the production, distribution, and promotion of Zoloft. Second, the common question of law or fact requirement was satisfied because questions of fact common to all of the families included the design of Zoloft, the pharmaceutical companies' knowledge of Zoloft's safety, and the pharmaceutical companies' representations about its safety. Thus, the district court determined that joinder was proper. The district court granted the families' motion to remand to the state court for lack of subject matter jurisdiction. The pharmaceutical companies appealed.

 

The Fourth Circuit Court of Appeals dismissed the pharmaceutical companies' appeal for lack of jurisdiction. The court held that the district court's joinder analysis that had been undertaken solely for resolution of subject matter jurisdiction was not in excess of its authority and the district court's determination that the New York family members were actually parties to the action was not reviewable as a collateral decision to that court's decision to remand.

 

A federal court of appeal’s review of a remand order is barred if the district court remanded based on the district court's lack of subject matter jurisdiction or a defect in removal other than lack of subject matter jurisdiction that was raised by the motion of a party within 30 days after the notice of removal was filed. The court found that the district court remanded the case after explicitly concluding that the pharmaceutical companies had not established subject matter jurisdiction. The district court did so by considering whether a state rule of procedure created distinct cases, or whether there was one action in which the New York family was a party. The reason the district court considered Rule 3(a) was simply to determine what parties were joined in order to decide jurisdiction. This evaluation was found to be a necessary step for the court to determine subject matter jurisdiction and was not severable from that conclusion.

 

The court held that the district court's determination that the New York family was a party in this action was not reviewable as a collateral decision to the district court's decision to remand. The facts did not indicate any purpose other than a joinder analysis undertaken solely for the resolution of subject matter jurisdiction. There was no conflict between federal statutes. The district court was obviously addressing subject matter jurisdiction when it went beyond the complaint and looked at Rule 3(a).

 

The court held that the Waco v. United States Fidelity & Guaranty Co., 293 U.S. 140 (1934) exception did not apply. The Waco exception to the statutory bar on appellate review of orders remanding a removed case to state court for lack of subject-matter jurisdiction applies to purportedly reviewable orders that (1) have a preclusive effect upon the parties in subsequent proceedings and (2) are severable, both logically and factually, from the remand order itself. Under the Waco exception, if a court looks to an issue for the purpose of determining subject matter jurisdiction, the issue is not separable because it cannot be said to have preceded the remand decision in logic and in fact. The court found that the district court’s removal order had no preclusive effect and there was no decision that preceded the determination of subject matter jurisdiction that could be separated from the inquiry of subject matter jurisdiction.

 

The court concluded that the district court's consideration of Rule 3(a) and whether there was one action in which one non-diverse non-removed family was a party, was not in excess of its authority. The district court’s joinder analysis was a necessary legal underpinning to its determination that the case was not properly removed for lack of diversity subject matter jurisdiction. The defendant-pharmaceutical companies appeal was dismissed.

 

See: E.D. ex rel. Darcy v. Pfizer, Inc., 2013 WL 3487397 (C.A.4 (W.Va.), July 12, 2013) (not designated for publication).

 

See also Medical Law Perspectives, May 2013 Report: Drugs, Dosage, and Damage: Physician Liability for Prescribing or Administering Medication  

 

 

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