United States: Lucky Seven – Multi-Plaintiff Misjoinder Fails In Illinois Post-BMS

Last Updated: October 12 2017
Article by James Beck

Once the Supreme Court's decision in Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017), definitively determined that non-resident plaintiffs can't go suing non-resident defendants anywhere they want, attention turned to one of the primary types of forum-shopping gamesmanship that plaintiffs used to trap defendants in their preferred venues.

St. Louis – and thus the Eastern District of Missouri – were one of the first battle grounds, and as we celebrated here, here, and here, a jurisdiction that had previously been almost impervious to attempts to combat fraudulent misjoinder seems to be coming around. See Jinright v. Johnson & Johnson, Inc., 2017 WL 3731317, at *4-5 (E.D. Mo. Aug. 30, 2017); Covington v. Janssen Pharmaceuticals, Inc., 2017 WL 3433611, at *4-5 (E.D. Mo. Aug. 10, 2017); Turner v. Boehringer Ingelheim Pharma, Inc., 2017 WL 3310696, at *3 (E.D. Mo. Aug. 3, 2017); Jordan v. Bayer Corp., 2017 WL 3006993, at *4 (E.D. Mo. July 14, 2017); Siegfried v. Boehringer Ingelheim Pharmaceuticals, Inc., 2017 WL 2778107, at *4-5 (E.D. Mo. June 27, 2017). So far every post-BMS removal of a misjoined, multi-plaintiff action in Missouri has followed the rationale discussed in our prior posts (and below), except for those with timing issues.

So that's one "magnet jurisdiction" seemingly on the way towards at least some degree of redemption.

Another one is the Southern District of Illinois, home to Madison and St. Clair Counties. That one started out looking a lot more doubtful. The first court to decide a post-BMS removal case had the attitude that nothing had changed. The court elected to ignore BMS – not even deigning to discuss it, beyond mentioning the defendant's reliance. Rios v. Bayer Corp., 2017 WL 3600374, at *1 (S.D. Ill. Aug. 22, 2017). Otherwise, it appeared that the Southern District was going to continue a status quo that had allowed it to keep its docket largely free of escapees from Madison and St. Clair, no matter what:

Plaintiff's Complaint alleges that Defendants are citizens of [numerous states and foreign countries], and that some of the plaintiffs are also citizens of [the same states]. Thus, complete diversity does not exist on the face of the Complaint. In their Notice of Removal, Defendants state that this Court nonetheless has diversity jurisdiction because the out-of-state Plaintiffs' claims were either fraudulently joined or procedurally misjoined, and thus the non-diverse Plaintiffs' citizenship should be ignored for purposes of determining jurisdiction. But because it is clear from the face of the Complaint that diversity jurisdiction is lacking, the Court need not first determine the existence of personal jurisdiction, and once again opts not to do so in this case.

Id. at *2.

And so things stood until just recently, until another jurist in the district (one who wasn't a former member of ATLA's board of governors), former Chief Judge Herndon, decided that he couldn't in good conscience say that BMS changed nothing. In a series of seven Xarelto cases, Judge Herndon recognized that there could be no more jurisdictional business as usual in the Southern District after BMS. See Berousee v. Janssen Research & Development, LLC, 2017 WL 4255075 (S.D. Ill. Sept. 26, 2017); Douthit v. Janssen Research & Development, LLC, 2017 WL 4224031 (S.D. Ill. Sept. 22, 2017); Braun v. Janssen Research & Development, LLC, 2017 WL 4224034 (S.D. Ill. Sept. 22, 2017); Bandy v. Janssen Research & Development, LLC, 2017 WL 4224035 (S.D. Ill. Sept. 22, 2017); Pirtle v. Janssen Research & Development, LLC, 2017 WL 4224036 (S.D. Ill. Sept. 22, 2017); Roland v. Janssen Research & Development, LLC, 2017 WL 4224037 (S.D. Ill. Sept. 22, 2017); and Woodall v. Janssen Research & Development, LLC, 2017 WL 4237924 (S.D. Ill. Sept. 22, 2017).

Since they are all by the same judge on the same subject, these seven opinions not surprisingly track the same rationale. We'll reference the most recent decision, Berousee, in our discussion. Berousse is a typical (actually somewhat on the small side, in our experience) misjoined mishmash of "32 non-Illinois plaintiffs from 18 different states who were embedded in the lawsuit explicitly to destroy diversity jurisdiction" by making sure that at least one plaintiff was not diverse from the non-resident defendant being sued. Id., 2017 WL 4255075, at *1. This motley crew of plaintiffs were blatantly misjoined, having nothing to do with one another, except allegedly taking the same product and suffering similar types of injuries

Notwithstanding the facial non-diversity of the complaint, the defendant removed (from St. Clair county), citing ("draw[ing] attention to") BMS for the proposition that "state courts lack specific jurisdiction to entertain non-resident plaintiff claims." Id. The court agreed that BMS "established the Fourteenth Amendment's due process clause did not permit the exercise of specific personal jurisdiction in state court over nonresident consumer's claims." Id. at *1 n.2.

The key point in all these cases is the federal district court's "discretion in jurisdiction." That is, under Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574 (1999), such courts, in determining their jurisdiction, are free to invert the usual process and consider personal jurisdiction before diving into subject matter jurisdiction where the personal jurisdiction question is "straightforward" and "present[s] no complex question of state law," and conversely "subject-matter jurisdiction is problematic." Berousee, 2017 WL 4255075, at *2 (discussing Ruhrgas).

[D]istrict courts do not overstep Article III limits when declining jurisdiction of state-law claims on discretionary grounds without determining whether those claims fall within their pendent jurisdiction without deciding whether the parties present a case or controversy. Where a straightforward personal jurisdiction issue presenting no complex question of state law is pending before the Court − and the dispute over subject-matter jurisdiction is problematic − the court does not abuse its discretion by turning directly to personal jurisdiction.

Id. at *2 (Ruhrgas quotations omitted).

Now – that is to say, after BMS – personal jurisdiction is much more "straightforward" than the subject matter jurisdictional thicket of fraudulent misjoinder and CAFA jurisdiction:

[S]everal courts [have] utilized the BMS holding [and] conclusively held personal jurisdiction − instead of subject-matter jurisdiction − is the more straightforward inquiry. Based on the above recent legal decisions combined with lack of "unyielding jurisdictional hierarchy," interests of judicial economy, and weight of the precautionary effect on ruling on an issue that could regress and bind the state court, the Court finds that in this matter personal jurisdiction is the more straightforward inquiry − and will analyze same before addressing challenges to subject-matter jurisdiction.

Id. at *3 (citations to E.D. Mo. decisions already cited in this post omitted).

That was the hard part, because once the court gets to the personal jurisdiction inquiry, application of BMS really is pretty cut and dried in the context of mass torts and multi-plaintiff misjoined complaints. General personal jurisdiction was out under our old friend Daimler AG v. Bauman, 134 S. Ct. 746 (2014), as the defendant was neither incorporated nor headquartered in Illinois. Berousee, 2017 WL 4255075, at *3.

As for specific jurisdiction, "[i]n exercising specific personal jurisdiction, defendants' contacts with Illinois must be directly related to the challenged conduct." Id. (citations omitted). There must be "purposeful availment" related to litigation. Id. at *3 n.3. Plaintiffs claimed that "defendants purposefully targeted Illinois as the location for multiple clinical trials which formed the foundation for defendants' [FDA new drug] application." Id. at *4. That was insufficient under BMS:

It is undisputed that the non-Illinois plaintiffs do not claim injuries from ingesting [the drug] in Illinois, and all conduct giving rise to the non-Illinois plaintiffs' claims occurred elsewhere. The instant matter is analogous to BMS where the United States Supreme Court held that California state courts do not retain specific personal jurisdiction over non-resident defendant pharmaceutical companies, for non-resident plaintiff claims not arising out of or relating to defendant's contacts with California. . . . [T]his Court lacks specific personal jurisdiction over defendants regarding the non-Illinois plaintiffs' claims.

Id. (emphasis original).

The plaintiff-side jurisdictional argument that Berousee rejected was the same one allowed by an Illinois intermediate appellate court last year in M.M. v. GlaxoSmithKline LLC, 61 N.E.3d 1026 (Ill. App. 2016), which is why M.M. became our #8 worst case of the year. While the Supreme Court recently denied certiorari, see 2017 WL 1153625 (U.S. Oct. 2, 2017), that means next to nothing. Consider, for example, the number of denied certiorari petitions in PMA preemption cases before the Court took, and affirmed, the pro-preemption decision in Riegel. Off the top of our heads (and it's been a while) we can name at least four − Martin v. Medtronic; Brooks v. Howmedica; Kemp v. Medtronic (one of Bexis'); and Mitchell v. Collagen. There are probably more.

So we wouldn't read anything into the denial in M.M. It's reasoning didn't impress us – at minimum it is another "grasping" and "exorbitant" theory of personal jurisdiction that, like those in Bauman and BMS, cannot pass Due Process muster. More importantly, M.M. is questionable in light of the Illinois Supreme Court's recent decision in Aspen American Insurance Co. v. Interstate Warehousing, Inc., 2017 WL 4173349 (Ill. Sept. 21, 2017), which not only decisively rejected jurisdiction by consent, id. at *4-5, but also had this to say about a similar theory, involving warehouses rather than clinical trials:

[P]laintiff has established that defendant does business in Illinois through the warehouse. . . . But this fact falls far short of showing that Illinois is a surrogate home for defendant. Indeed, if the operation of the warehouse was sufficient, in itself, to establish general jurisdiction, then defendant would also be at home in all the other states where its warehouses are located. The Supreme Court has expressly rejected this reasoning.

Id. at *4. Granted, Aspen Insurance was addressing general jurisdiction, but since we're discussing non-resident plaintiffs and Due Process, the "grasping"/"exorbitant" principle is the same. Substitute "clinical trials" for "warehouses" and you can see where this is going....

Nor, getting back to the focus of this post, did the clinical trials argument impress Judge Herndon. He was so unimpressed, he didn't even cite M.M. while rejecting its rationale. In Berousee,"the non-Illinois plaintiffs failed to allege ingestion of [the drug] in Illinois, or suffered from injuries caused by [the drug] in Illinois." 2017 WL 4255075, at *4. Without such allegations, "there is no connection between Illinois and the underlying [drug] controversy, which in itself is unconnected to Illinois." Id. Allegations like the plaintiffs, about clinical trials generally, merely involved "general connections with forum [that] are not enough; a corporation's continuous activity of some sort within a state is not enough to support demand that corporation be amenable to lawsuits unrelated to specified activity." Id. The same sort of conduct "took place throughout the United States." Id. at *4 n.4. But the non-resident plaintiffs "were not prescribed [the drug] here, nor did they purchase the drug, suffer any injury, or receive treatment in [this state]." Id.

There being no personal injury over non-resident plaintiffs' claims against non-resident defendants, those plaintiffs had to be dismissed, without prejudice. Id. at *4-5. Dismissal of those plaintiffs' claims meant that complete diversity existed between the lone Illinois plaintiff and the defendants, so remand of that claim to state court was denied. Id. at *5.

The other six decisions by Judge Herndon apply the same core jurisdictional reasoning as Berousee almost verbatim. See Douthit, 2017 WL 4224031, at *3-6; Braun, 2017 WL 4224034, at *3-6; Bandy, 2017 WL 4224035, at *3-6; Pirtle, 2017 WL 4224036, at *3-6; Roland, 2017 WL 4224037, at *2-5; Woodall, 2017 WL 4237924, at *3-6.

That is not to say that they are identical in all respects, however. In Douthit, the plaintiffs' back-up argument, that the removal was untimely, was rejected almost out of hand. The Supreme Court's decision in BMS constituted an "order or other paper" under 28 U.S.C. § 1446(b)(3) opening up a new 30-day removal period. 2017 WL 4224031, at *6. Plaintiffs made only "a feeble attempt to persuade the Court that pleadings and orders filed in other suits, not related to the removed case" weren't "orders or other papers" under this statute . Id. The court decisively rejected this "erroneous[] conten[tion]":

Correctly, defendants attest BMS conclusively established the Due Process Clause prohibits non-Illinois plaintiffs from filing claims against defendants in Illinois state courts. The Court agrees with defendants and finds plaintiffs' argument unfounded. When a "different case resolve[s] a legal uncertainty concerning the existence of original federal jurisdiction[,]" removal is allowed on that basis.

Id. (quoting Wisconsin v. Amgen, Inc., 516 F.3d 530, 534 (7th Cir. 2008)). Accord Braun, 2017 WL 4224034, at *6; Bandy, 2017 WL 4224035, at *6; Pirtle, 2017 WL 4224036, at *6; Roland, 2017 WL 4224037, at *5; Woodall, 2017 WL 4237924, at *6.

We hope that Judge Herndon's septilogy (while not as entertaining as J.K. Rowling's) nails down post-BMS jurisdictional issues in Southern District of Illinois, just as firmly as those issues appear to be resolved in the Eastern District of Missouri. On to California and Pennsylvania.

This article is presented for informational purposes only and is not intended to constitute legal advice.

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