September 29, 2012

Strategic Joinder to Defeat Venue Transfer

Venue can often mean the difference between a win and a loss, or a six-figure case and a seven-figure case. When the case can be moved to a better venue, in most instances it should. Knowing that, the plaintiffs’ bar have developed a variety of strategies to defeat those efforts. The recent case of Napoli v. Pfizer, Inc., decided by the United States District Court for the Eastern District of Pennsylvania addresses one such tactic.

In the case the plaintiff filed suit in the Superior Court of the State of California against Pfizer, Wyeth and Stuart A. Bussey, M.D. The plaintiff was a resident of California. Pfizer and Wyeth were of diverse citizenship from plaintiff, but Dr. Bussey was a resident of California, like the plaintiff. The inclusion of Dr. Bussey would normally defeat diversity jurisdiction when attempting to remove the case to federal court.

Wyeth nonetheless removed the case to the United States District Court for the Central District of California and the case was then transferred to the Eastern District of Pennsylvania pursuant federal multi-district litigation rules. Wyeth asserted the diversity jurisdiction existed with respect to the real parties in interest; the citizenship of Dr. Bussey should be ignored by the District Court since the plaintiff allegedly only joined Dr. Bussey to defeat diversity jurisdiction.

In support of its position with respect to the alleged fraudulent joinder of Dr. Bussey, Wyeth submitted an affidavit from Dr. Bussey’s attorney, Regina C. Kim, esquire. The affidavit stated that Ms. Kim spoke to plaintiff’s counsel on several occasions; that plaintiff’s counsel stated that he did not want an adversarial relationship with Ms. Kim or Dr. Bussey; that Dr. Bussey was included in the suit only “as a strategic move to have the matter filed for over a year, as it affects removal issue”; that the plaintiff would keep Dr. Bussey in the case only until Dr. Bussey produced records in his possession; that Dr. Bussey would be dismissed after his deposition; and that plaintiff’s counsel was 95% certain that he would dismiss the claims against Dr. Bussey after a one-year period. Removal to federal court can only be accomplished during the first year of litigation (subject to a variety of other obstacles/conditions).

The District Court noted that Wyeth faced a heavy burden in convincing the court to ignore Dr. Bussey’s citizenship. The District Court noted that a plaintiff’s subjective motive “for suing a non-diverse defendant, even if that motive is a desire to defeat removal, is simply not relevant to the fraudulent joinder inquiry.” The District Court for the Eastern District of Pennsylvania indicated “instead, our court of appeals follows an objective test which looks to whether a plaintiff has failed to state a claim upon which relief can be granted or simply failed to prosecute the claim against the non-diverse defendant.” The District Court noted that on a motion of this type, the plaintiff was to be given the benefit of doubt.

The District Court noted that statements indicating that the plaintiff was 95% certain that he would not pursue Dr. Bussey is simply indicative that the plaintiff’s counsel had not yet made a final decision as to whether to pursue those claims. The District Court found that Wyeth had failed to present evidence under which the District Court, utilizing the objective test identified above, could disregard the citizenship of Dr. Bussey. 

What It Means to You

Based on this case and its progeny, the course of attack in instances of fraudulent joinder is to quickly establish, where possible, that no viable claim exists against the non-diverse defendant. Speed is of the essence. To the extent the non-diverse defendant is dismissed from the case, an opportunity still exists to remove the case.


Napoli v. Pfizer, Inc., 2012 U.S. Dist. LEXIS 90652 (June 28, 2012)