Opinion
No. C 01-4771 MJJ
May 15, 2002
ORDER GRANTING PLAINTIFF MOTION TO REMAND
INTRODUCTION
Before the Court is a Motion to Remand brought by Plaintiffs Erica Rose Doherty, by and through her guardian ad litem John Doherty, and Jared Shelley, by and through his guardian ad litem, Lorie Shelley ("Plaintiffs"), pursuant to 28 U.S.C. § 1447 (c). Plaintiffs brought their claim. California state court, and Defendants Aventis Pasteur, Inc., et al. ("Defendants") removed to federal court on the basis of federal question and diversity jurisdiction pursuant to 28 U.S.C. § 13 and § 1333. For the reasons discussed below, the Court concludes that it does not have subject matter jurisdiction under either 28 U.S.C. § 1331 or § 1333, and therefore GRANTS Plaintiffs' Motion to Remand and does not reach the issue of Defendants' Motion to Dismiss.
FACTUAL BACKGROUND
This is a class action on behalf of American children who received vaccines containing "thimerasol," a preservative and bactericide that contains ethyl mercury. Defendant drug manufacturers used thimerasol in some multi-dose vaccines to prevent the growth of bacteria. Plaintiffs contend that these vaccines exposed their children to toxic doses of mercury that cause neurological damage and neurodevelopmental injuries. Plaintiffs allege that Defendants manufactured or administered the thimerasol-containing vaccines without warning parents of the potential dangers of the product, or advising them of alternatives such as non-thimerasol containing vaccines.
LEGAL STANDARD
As a general rule, an action filed in state court may be removed to federal court only if it might have been brought there originally. See 28 U.S.C. § 1441 (b). Courts construe the removal statute strictly, and must reject federal jurisdiction if there exists any doubt as to the propriety of removal. See Duncan v. Stuetzle, 76 F.3d 1480, 1485 (9th Cir. 1996); see also Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992).
ANALYSIS
Plaintiffs argue that removal was improper because there is neither federal question jurisdiction nor diversity jurisdiction. The Court addresses each in turn below.
I. Federal Question Jurisdiction
Plaintiffs contend that there is no basis for federal question jurisdiction over their California state law causes of action for negligence, fraud, breach of warranty and product liability. Defendants counter with two arguments. First, they assert that Plaintiffs' claims are created by and arise under federal statute, the Vaccine Act of 1986 ("Vaccine Act"), which creates an administrative recovery scheme for vaccine-related injuries. See 42 U.S.C. § 300aa-1 et seq. Second, Defendants argue the Plaintiffs' state law claims necessarily turn on the resolution of substantial federal questions embedded in the Vaccine Act.
Federal question jurisdiction exists for claims "arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. The presence or absence of federal question jurisdiction is governed by the "well-pleaded complaint rule," which provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiffs properly pleaded complaint. See Caterpiller Inc. v. Williams, 482 U.S. 386, 392 (1987). The anticipation of federal defense, including the defense of preemption, does not suffice to create federal jurisdiction even if the complaint anticipates the defense and even if all parties concede that the federal defense is the only real issue. See id. at 393.
As a corollary to the "well-pleaded complaint rule. the "artfully-pleaded complaint rule" does not allow a plaintiff to escape federal question jurisdiction by neglecting to plead necessary federal questions. See Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 22 (1983). However, the "mere presence of a federal issue in a state cause of action does not automatically confer jurisdiction." Merrell Dow Pharms., Inc. v. Thompson, 478 U.S. 804, 813 (1986). Rather, federal courts may hear, through removal, "only those cases in which a well-plead complaint establishes either that federal law creates the cause of action or that the plaintiffs right relief necessarily depends on resolution of a substantial question of federal law." Id. at 807, n. 2 (quoting Franchise Tax Rd., 463 U.S. at 28).
Finally, certain federal statutes have such an extraordinary effect that they preempt an entire area of state law and convert state law claims into federal statutory claims. See Caterpiller, 482 U.S. at 393. The Supreme Court has interpreted only § 502(a) of the Employment Retirement and Insurance Act ("ERISA"), § 301 of the Labor Management Relations Act ("LMRA") and certain types of Indian land grant rights to have such a completely preemptive effect. See id. at 393; see also Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 64 (1987); see also Oneida Indian Nation County of Oneida, 414 U.S. 661, 667 (1974).
A. Created by Federal Law
In opposition to Plaintiffs' Motion to Remand, Defendants argue that Plaintiffs' causes of action are created by and arise under the Vaccine Act. The Vaccine Act creates a federal no-fault remedial scheme for vaccine-related injuries in which plaintiffs first pursue their claims through the Federal Court of Claims. See 42 U.S.C. § 300aa-16. The policy of the statute is to expedite the award of damages and protect vaccine manufacturers from burdensome litigation. See H.R. Rep. No. 99-908 at 4 (1986), reprinted in 1986 U.S.C.C.A.N. at 6345. of significance to this case, the Vaccine Act mandates that plaintiffs first bring their claims for vaccine-related injuries to the Federal Court of Claims; only if the plaintiffs reject that court's judgment may they pursue their claims in state or federal court. See 42 U.S.C. § 300aa-11(2)(A). Plaintiffs here did not pursue their claims through the Vaccine Act scheme, but instead went directly to state court.
Defendants argue that since Plaintiffs must first exhaust their remedies through the Federal Court of Claims, any claims they may bring under state law before exhaustion are necessarily federal claims. They contend that this first phase of "vaccine-related injury" litigation, which must be channeled through the Federal Court of Claims, is an exclusively federal remedy that precludes separate state court causes of action before exhaustion. This analysis leaps over a crucial point, however: the Vaccine Act specifically contemplates that civil law remedies are an alternative vent for the resolution of vaccine-related injury claims after administrative exhaustion. See 42 U.S.C. § 300aa-16; see also Shalala v. Whitecotton, 514 U.S. 268, 269-70 (1995). It is axiomatic that a federal remedy that leaves intact alternative civil fora cannot be the basis for "creation" of claims that may be brought in those fora. See Haggerty v. Wyeth Aherst Pharms., 79 F. Supp.2d 182, 18 (E.D.N.Y. 2000) (finding no federal jurisdiction because Vaccine Act neither creates nor preempts state tort actions).
The parties differ sharply, and at length, about the meaning of "vaccine-related injury" for the purposes of the Vaccine Act's exhaustion requirement. Plaintiffs argue that their state law claims are not for vaccine-related" injuries but instead are based on injuries caused by thimerasol, which they contend is, at best, an adulterant or contaminant of a vaccine whose effects are not covered under the Vaccine Act. They point to various provisions of the statute, including the Vaccine Injury Table, which has been strictly construed in various cases, and includes no reference to thimerasol. See Staples v. Sec'y of Health and Human Svcs., 30 Fed.C1., 348 (1994); see also Brausewetter v. Sec'y of Health and Human Svcs., 1999 WL 562700 (Fed. C1.); see also Burch v. Sec'y of Health and Human Svcs., 2001 WL 180129 (Fed.C1.). Defendants in turn rely on various arguments put forward by the Secretary of Health and Human Services in King v. Aventis Pasteur, No. CV 01-1305 (D.Ore. filed Mar. 5, 2002) that construe "vaccine related injury" as any injury caused by any lawfully included component of a vaccine. If Plaintiffs succeed in their argument that thimerasol is merely a contaminant or adulterant, they may continue with their claim in state or federal court without exhausting their statutory remedies under the Vaccine Act. If, on the other hand, Defendants prevail in their interpretation, the claim must be dismissed and Plaintiffs may pursue their claims through the Vaccine Act program. Ultimately, however, whether Plaintiffs' avoidance of the Vaccine Act's exhaustion requirement precludes their state court causes of action is a matter for the state court to decide, as the Vaccine Act neither completely preempts nor creates Plaintiffs' state law claims.
B. Preemption
Implicit in Defendants' arguments against the Motion to Remand is the premise that Plaintiffs' claims are preempted in some fashion by the Vaccine Act. As set forth below, there is little for Defendants to rely on for the purposes of this Motion. It is settled law that "federal preemption is ordinarily a federal defense to the plaintiffs suit. As a defense, it does not appear on the face of a well-pleaded complaint, and, therefore, does not authorize removal to federal court." Metropolitan Life, 481 U.S. at 64; see also Caterpiller, 482 U.S. at 393.
Here, Defendants seem to argue that Plaintiffs' pre-exhaustion claims are preempted by the Vaccine Act. Resp. 21, n. 14. Complete preemption would allow Defendants to remove this action federal court; partial preemption, as discussed above, is a federal defense and as such is not sufficient to allow for removal. See Metropolitan Life, 481 U.S. at 64. For partial preemption purposes, the significant issue is whether Plaintiffs' claims are inconsistent with the Vaccine Act. The Supreme Court has held that the defense of federal preemption is not sufficient to establish federal question jurisdiction, even if both parties acknowledge it as the central issue in the case. See id. Since Plaintiffs plead only state law tort claims, which, they argue, fall outside the parameters the Vaccine Act, the issue of whether the Act preempts those claims is a matter for the state court decide. While the Vaccine Act may have the eventual effect of preempting Plaintiffs' state law claims, that possibility does not create federal jurisdiction in this case.
Defendants also argue that the Vaccine Act completely preempts Plaintiffs' state law claim by occupying the entire area of tort law associated with vaccine-related injuries. This argument is unpersuasive for two reasons. First, the Supreme Court has found only three bases for complete preemption: ERISA, the LMRA and certain Indian land grant rights. See Caterpillar, 482 U.S. at 393. The Vaccine Act does not eliminate the state tort system as the complete-preemption statute do. Rather, the Act postpones the use of civil remedies while, notably, providing for the tolling of the statute of limitations during the pendency of the administrative proceedings. 42 U.S.C. § 300a 16(c).
Second, even assuming arguendo that the Vaccine Act had such a completely preemptive effect, that would not eliminate claims that arguably fall outside the scope of the Act, as Plaintiff assert their claims do. Even under ERISA and the LMRA, there simply is no complete preemption of state law claims that fall outside the boundaries of the statute in question. See id. at 396. As it unclear whether Plaintiffs' state law claims fall outside the purview of the Vaccine Act, the Court cannot hold that the Act completely preempts such claims.
C. Substantial Question of Federal Law
The last ground upon which federal question jurisdiction might be sustained here is no more helpful to Defendants. Defendants argue that this case raises a substantial federal question about the scope of the Vaccine Act regarding the statutory construction of the term "vaccine-related injury," a question that must be resolved in federal court. Plaintiffs convincingly counter that the Vaccine Act provides an administrative scheme that is co-extensive and compatible with state law based civil actions. They point out that the mere presence of a federal issue, in this case whether thimerasol is an "adulterant' or a vaccine" for the purposes of the Vaccine Act, does not create federal jurisdiction. Merrell Dow, 478 U.S. at 814. The federal issue must be substantial, and it must be intimately or uniquely related to existing federal law. See id. n. 11. Here, as in Merrell Dow, Congress did not craft an exclusively federal remedy. Instead, it created a statutory scheme built on elements of both state and federal law that leaves intact state law-based remedies. Merrell Dow teaches that unless federal issues are central to the resolution of the state law claim, courts should refrain from allowing federal jurisdiction to overtake causes of action that are properly left to the state courts. Id. at 815. Further, in this case Plaintiffs plead causes of action that exist far more independently than those pleaded in Merrell Dow. There, plaintiffs used standards set forth in the Food Drug and Cosmetics Act ("FDCA") as elements of their claims. Id. at 805. The Supreme Court found that the interpretation of those standards did not present a substantial federal question. Id. at 814. Here, the fact that Defendants contest the definition of "vaccine-related injury" in the Vaccine Act is not enough to create "arising under" jurisdiction. See Haggerty, 79 F. Supp. 2d at 189.
II. Diversity Jurisdiction
A. Complete Diversity
Defendants also assert jurisdiction based on diversity pursuant to 28 U.S.C. § 1332(a)(1). Defendants argue that two California doctors, the only non-diverse Defendants, whom Plaintiffs allege administered the thimerasol-containing vaccines, are fraudulently joined. In a class action, the Court will look only to the citizenship of the named class representatives to ascertain diversity. See Snyder v. Harris, 394 U.S. 332, 340 (1969). Joinder is deemed fraudulent, and the defendant's presence in the lawsuit is ignored for the purposes of determining diversity, if the plaintiff fails to state a cause of action against a resident defendant, and the failure is obvious according to settled state law. See Morris v. Princess Cruises, Inc., 236 F.3d 1061. 1067 (9th Cir. 2001).
Defendants assert, on four bases, that the California doctors are fraudulently joined. First, they contend that the Vaccine Act precludes recovery from these physicians. As the Court explained above, the Vaccine Act does not, at this time, control Plaintiffs' claims. Therefore any argument based on a definitive reading of the Vaccine Act's definition of "vaccine-related injury" is unpersuasive. This is particularly so under the permissive standard for fraudulent joinder. Moreover, Defendants cannot cogently argue that it is "settled law" that state law tort claims alleging a non-vaccine related injury as against physicians are barred by the Vaccine Act. The very meanings of "vaccine-related injury" and "adulterant or contaminant" are, at this point, undetermined. Plaintiffs' claims against the California doctors are at least arguably viable, and thus Defendants' first argument fails.
Next, Defendants argue that fraudulent joinder is revealed by Plaintiffs' irreconcilably inconsistent allegations. Defendants argue that since Plaintiffs plead allegations of failure to warn as against Defendant drug manufacturers, they should be barred from pleading failure to warn claims against Defendant doctors, who could not have known of the dangers of thimerasol. This argument fails on two counts. First, Plaintiffs are permitted to plead allegations in the alternative or even inconsistently. In general, Plaintiffs may plead whatever version of facts, or whatever legal theory, would support recovery. Weil Brown, Civil Procedure Before Trial, §§ 6:242-6:244 at 6-54 (2001). Second, even assuming arguendo that Plaintiffs cannot state a valid failure to warn claim against Defendant doctors, they plead other allegations that could support recovery. For example, Plaintiffs plead that after Defendant drug manufacturers began warning the medical community about the risks of thimerasol, Defendant doctors failed to warn Plaintiffs' parents of the risks, failed to make available non-thimerasol containing vaccines, and failed to advise Plaintiffs' parents that thimerasol-free vaccines were available. Therefore, Plaintiffs have pleaded state law cause of action against Defendant doctors that are, at least, arguably viable.
Third, Defendants argue that Plaintiffs fail to state viable negligence claims under California law. This contention is not convincing. Defendants correctly note that California Health and Safety Code § 120455 bars Plaintiffs from bringing vaccine-related injury claims against medical providers, unless the act or omission in question is willful misconduct or gross negligence. However, the issue of what constitutes a "vaccine-related injury" is precisely the question the parties most dispute. Plaintiffs contend that § 120455 does not govern their claims; Defendants argue that it does. Neither party is able to cite to applicable law on the question because it does not yet exist. Therefore, under the "settled law" standard required to find fraudulent joinder, the Court cannot find, on the basis that no state law cause of action exists, that the California doctors are fraudulently joined.
Cal. Health and Safety Code § 120455 provides in relevant part: "no person shall be liable for any injury caused by an act or omission in the administration of a vaccine or other immunizing agent to a minor, including the residual effects of the vaccine or immunizing agent . . . and the act or omission does not constitute willful misconduct or gross negligence."
Finally, Defendant argue that Plaintiffs cannot recover from Dr. Waters due to a pre-existing arbitration agreement between Dr. Waters and members of the Plaintiff class. The Court need not reach this issue because Defendant Dr. Wong is not a party to an arbitration agreement; he is a California resident, and thus complete diversity is destroyed. However, assuming for purposes of argument that the arbitration agreement might influence the existence of diversity jurisdiction, the Court finds that the applicability and force of the agreement are not matters that pertain to a determination of jurisdiction. Whether the agreement prevents the present civil action is a statutory matter for the state court to decide pursuant to the California Code of Civil Procedure § 1281.2, which provides a detailed scheme for the interpretation of arbitration agreements. It is not a matter of settled state law that the agreement is valid, enforceable or applicable to the cause of action here. As a result, Defendants have not met their burden of proving that Dr. Waters was fraudulently joined.
It is Defendants' burden to prove that the California doctors cannot be liable under any theory. They have failed to carry their burden and therefore have failed to prove that the Court has diversity jurisdiction.
CONCLUSION
Because Defendants have failed to show that federal question or diversity jurisdiction exists in this case, the Court GRANTS Plaintiffs' Motion to Remand. The case is hereby ordered remanded to the San Francisco Superior Court.