Opinion
CIVIL ACTION NO. 04-142-DLB.
October 7, 2004
MEMORANDUM OPINION ORDER
INTRODUCTION
This case involves a product liability action originally filed in Boone Circuit Court and subsequently removed to this Court pursuant to 28 U.S.C. § 1332. Plaintiffs move to remand the case (Doc. #3) and their motion is now ripe for review.
FACTUAL PROCEDURAL BACKGROUND
Until September 1997, Defendant Wyeth, Inc. (Wyeth) manufactured and distributed the popular diet drugs "Pondimin" and "Redux." These drugs have been the subject of much litigation. Plaintiffs sued Wyeth, as well as their treating physician, Dr. W. Rex Duff, for heart damage allegedly sustained as a result of being prescribed and taking these drugs as part of a weight loss regimen.
Plaintiffs individually consulted Dr. Duff at Bariatrics, Inc. of Kentucky for the purpose of obtaining professional weight loss therapy. After these initial consultations, Dr. Duff spoke to Plaintiffs collectively regarding his weight management program, which Plaintiffs allege consisted of indiscriminately prescribing Fenfluramine ("Pondimin") and Phentermine. Pondimin is an appetite suppressant that facilitates weight loss. Plaintiffs allege that, prior to prescribing the drug, Dr. Duff elicited from them only a "cursory" medical history and conducted what he referred to as a "Bariatric examination." According to Plaintiffs, Dr. Duff failed to assess their individual needs for therapy of Pondimin, and failed to warn them — either verbally or via a medication guide — of any risks associated with the drug. Plaintiffs ingested Pondimin on a daily basis, as prescribed, and their prescriptions were regularly refilled by Dr. Duff on follow-up visits. Plaintiffs eventually stopped taking Pondimin and, in 2003, each Plaintiff underwent an echocardiogram, which revealed heart valve damage/regurgitation. Defendant Wyeth voluntarily recalled the drugs at issue in September 1997.
When taken in combination, these drugs are commonly referred to as "Fen-phen."
Claims such as those asserted by Plaintiffs were previously consolidated in multi-district litigation (MDL) in the Eastern District of Pennsylvania, In re: Drugs Products Liability, MDL No. 1203. A nationwide class action settlement was approved by the MDL court in August 2000. Pursuant to that settlement, Plaintiffs were eligible, and have elected, to "opt-out" of the settlement and pursue relief individually in Kentucky state court.
Plaintiffs originally filed their complaint in Boone Circuit Court on December 18, 2003. That complaint, however, named only Dr. Duff and Bariatrics, Inc. as defendants. Plaintiffs filed a First Amended Complaint on April 19, 2004, adding Wyeth as a defendant. Defendants removed the action to this Court on July 6, 2004 on the basis of diversity jurisdiction, alleging that Dr. Duff, a non-diverse defendant, was fraudulently joined. (Doc. #1). Plaintiffs subsequently filed the pending Motion to Remand. (Doc. #3).
ANALYSIS
Plaintiffs seek remand on the ground that Wyeth's Notice of Removal was untimely filed. Plaintiffs also contend that Wyeth has not sustained its burden of proving fraudulent joinder and, therefore, complete diversity is lacking. Before considering fraudulent joinder, the Court turns first to the issue of timeliness. For, if a time limitation applies to actions removed for fraudulent joinder reasons, and this limitation was not met, any allegation of fraudulent joinder becomes moot.Section 1446 of Title 28 of the United States Code generally prescribes the procedure for removal of cases under section 1441. Under section 1441(b), "a notice of removal shall be filed within 30 days after receipt by the defendant, through service or otherwise, of a copy of the initial pleading. . . ." (emphasis added). In response to Plaintiffs' timeliness challenge, Wyeth claims: 1) the 30-day time limit does not apply in the case of fraudulent joinder, 2) Judge Caldwell's opinion in Collett v. Freid, No. 03-526, constitutes "other paper" under the second paragraph of section 1446(b), or that 3) it is entitled to an equitable extension.
That paragraph states:
If the case stated by the initial pleading is not removable, a notice of removal may be filed within 30 days after receipt by the defendant . . . of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable. (emphasis added).
Wyeth's last two arguments can be dispensed with rather quickly. First, Wyeth may avail itself to the relief offered by the second paragraph of section 1446(b) only if the case stated by the initial pleading was non-removable. Judge Caldwell's opinion and order was issued after Wyeth filed its Notice of Removal, which included the assertion that diversity existed because Dr. Duff had been fraudulently joined. Therefore, Wyeth's reliance upon the opinion as "other paper" from which it first learned that the case was removable based upon fraudulent joinder is misplaced. Nor does the opinion, itself, qualify as "other paper." Many courts have considered the "other paper" provision of section 1446(b) and limited its application to papers "filed in the case." See Sunburst Bank v. Summit Acceptance Corp., 878 F. Supp. 77, 80 (S.D. Miss. 1995). Even those courts that have construed the provision broadly require some relation to the pending case. See Hamilton v. Hayes Freight Lines, Inc., 102 F. Supp. 594 (E.D. Ky. 1952) (holding that an answer in an appeal that involved the same parties qualified as "other paper" for purposes of applying the time limit of section 1446(b)). Even though Wyeth is also named as a defendant in Collett, that case does not form part of, or have any bearing on, the instant action.
The opinion was issued on July 15, 2004, whereas Wyeth's notice of removal was filed on July 6, 2004.
Wyeth's argument that it is entitled to an "equitable extension" of the filing period is also without merit. It is well established that a party entitled to remove a suit from state court to federal district court must comply strictly with the provisions of the statute governing the exercise of the privilege. Hamilton v. Hayes Freight Lines, 102 F. Supp. 594 (E.D. Ky. 1952); Bragg v. Ky. RSA #9-10, Inc., 126 F. Supp. 2d 448 (E.D. Ky. 2001); Mitchell v. Ky-American Water Co., 178 F.R.D. 140, 141-42 (E.D. Ky. 1997) (time provisions of removal statute are strictly construed, and if defendant fails to file removal notice within thirty days from receipt of pleading by defendant, action must be remanded). Similarly, courts are without authority to enlarge, change or modify the clear terms of the statute. Id. See also Holston v. Carolina Freight Carriers Corp., 936 F.2d 573, 1991 WL 112809, at *2 (6th Cir.) (Table decision, text available in Westlaw) (noting that it has been uniformly held that the failure to file for removal within the 30-day period, while waivable by plaintiff, is a formal barrier to the exercise of federal jurisdiction).
Finally, Wyeth argues that the 30-day rule does not apply to removals based on fraudulent joinder. In support, Wyeth cites to three cases in which various district courts have concluded that the 30-day removal period does not apply where a non-diverse defendant has been fraudulently joined. See Parks v. NY Times Co., 195 F.Supp. 919 (M.D. Ala. 1961); Costa v. Port Auth. of NY, No. 95-CV-4749, 1996 WL 143908 (S.D.N.Y. 1996); Nosonowitz v. Allegheny Beverage Corp., 463 F.Supp. 162 (S.D.N.Y. 1978). Notably, Wyeth does not point to any authority within this circuit, nor has the Court been able to locate any case in the Sixth Circuit or any district court within the circuit presented with this question. Few courts have expressly addressed this issue. Delaney v. Viking Freight, Inc., 41 F. Supp. 2d 672, 674 fn. 2 (E.D. Tex. 1999). Nonetheless, most reported opinions have enforced a 30-day removal period that begins to run from the time a defendant first ascertains that a party has been fraudulently joined, id., that is, that there is no reasonable basis for predicting that state law might impose liability on the facts alleged. See also Jernigan v. Ashland Oil Inc., 989 F.2d 812, 817 (5th Cir. 1993) (concluding that defendants were entitled to remove within 30 days following their discovery of improper joinder).
In this case, it is reasonable to conclude that Wyeth believed that Dr. Duff had been fraudulently named as a defendant from the time it first received the suit papers and saw the face of the complaint. This is evidenced by the Notice of Removal itself, wherein Wyeth states, "The Court has original subject matter jurisdiction under the provisions of 28 U.S.C. § 1332 because, excluding the fraudulently joined defendants, this is a civil action between citizens of different states, and the amount in controversy exceeds $75,000." (Doc. #1, p. 2). Wyeth further alleges that "Plaintiffs' First Amended Complaint follows a pattern of fraudulent joinder that has now become obvious in diet drugs actions brought against [it]." (Doc. #1, p. 3). The Court concludes that the 30-day period for removal applies and is calculated based upon when a defendant first ascertains that a co-defendant has been fraudulently joined. In this case, Wyeth's Notice of Removal reflects that it became aware of the fraudulent joinder of Dr. Duff from face of the Amended Complaint served upon it.
The only remaining question, therefore, is whether Wyeth timely removed this case. The certified mail receipt indicates that Wyeth was served with the First Amended Complaint on May 27, 2004. Wyeth, however, did not file its Notice of Removal with this Court until July 6, 2004, forty days later. Initially, Wyeth claimed that Plaintiffs violated Kentucky Civil Rule 4.03 by failing to file the return certified mail receipts with the Court. Based solely on that transgression, Wyeth asserted that its notice was timely filed. That argument is without merit and of no consequence to the current proceeding. It is the service upon the defendant which starts the thirty day clock, not the Court's receipt of the certified mail, return receipt forms. Wyeth also argues that it removed "promptly" after Plaintiffs' counsel informed defense counsel that Wyeth had, in fact, been served. While the Court is sympathetic to defense counsel's plight in trying to diligently defend a multitude of recently filed cases, the plain language of the removal statute reveals that the time for removal commences when the defendant is served, not when defense counsel is notified that the defendant has been served. See Mgmt. Network Group, Inc. v. ITC Group, Inc., No. 95-2063, 1995 WL 351393, at*2 (D. Kan. May 23, 1995) (distinguishing between receipt by a defendant and receipt by a defendant's attorney). The statute itself requires removal within thirty days after receipt by the defendant. It does not state within thirty days after defense counsel learns of the receipt by the defendant. This "receipt rule" has been adopted by the Sixth Circuit. See, Tech Hills II Assoc. v. Phoenix Home Life, 5 F.3d 963, 968 (6th Cir. 1993). Under either the "receipt rule" or the actual service rule, because there is no dispute that Wyeth was properly served on May 27, 2004, whether the receipt rule or actual service rule applies is of no consequence. Because that First Amended Complaint placed Wyeth on notice that Dr. Duff had been fraudulently joined, the thirty day clock for removal began on May 27, 2004, the date Wyeth was properly served with the complaint. For these reasons, the Court finds that Wyeth's removal notice was untimely under 28 U.S.C. § 1446(b) and was, therefore, procedurally defective.
Rule 4.03 provides that "the person serving the summons shall make proof thereof to the court promptly, and in any event within the time during which the person served must respond."
One final matter deserves comment. On September 24, 2004, Dr. Duff and Bariatrics, Inc. filed a motion for summary judgment. The Court expresses no opinion on the merits of this motion, as it shall be remanded to the state court for adjudication.
CONCLUSION
In accordance with the above, IT IS ORDERED that Plaintiffs' Motion to Remand (Doc. #3) is hereby GRANTED and this matter is, therefore, REMANDED IN ITS ENTIRETY to Boone Circuit Court, from which it was removed.