Opinion
EP-02-CA-0311-DB
October 18, 2002
MEMORANDUM OPINION AND ORDER
On this day, the Court considered Plaintiffs' "Motion to Remand," filed in the above-captioned cause on August 9, 2002. Defendant American Home Products Corporation ("Wyeth"), filed a Response on August 23, 2002. For the reasons stated below, the Court is of the opinion that Plaintiffs' Motion to Remand should be denied.
BACKGROUND
Plaintiffs Antonia Olivas and Manuel Olivas commenced this action on January 2, 2002, in County Court at Law Number 5 in El Paso County, Texas (hereinafter "state court"). Plaintiffs' First Amended Petition and Jury Demand Served With Discovery (hereinafter "First Amended Petition") named the following entities as Defendants: American Home Products Corporation; Advocare International, LLC; Bayer Corporation; Block Drug Company, Inc.; Bristol Myers Squibb Company; Chattem, Inc.; Glaxosmithkline, PLC; Novartis Consumer Health, Inc.; Novartis Pharmaceuticals Corporation; Smithkline Beecham Consumer Healthcare, L.P.; Smithkline Beecham Corporation; Whitehall-Robins Healthcare; and Walgreen Co., d/b/a Walgreens. In their First Amended Petition, Plaintiffs allege that they purchased and ingested certain over-the-counter, non-prescription drugs, containing phenylpropanolamine ("PPA"). Plaintiff Antonia Olivas suffered personal injuries as a consequence of having ingested PPA-containing products, allegedly designed, formulated, marketed, manufactured, distributed and/or sold by Defendants. Based on these allegations, Plaintiffs bring causes of action against Defendants for strict products liability, negligence, gross negligence, implied warranty of merchantability, implied warranty of fitness for a particular purpose, negligent misrepresentation, breach of continuing duty to warn, civil conspiracy, and malice. Plaintiffs seek compensatory and exemplary damages, attorney fees, costs, and interest.
Plaintiffs are residents and citizens of Texas. Defendant Advocare International, LLC, (hereinafter "Advocare") is a corporate citizen of the State of Texas. All other defendants maintain their principal places of business and are incorporated in states other than Texas.
On July 16, 2002, Wyeth removed the case to this Court pursuant to the provisions of 28 U.S.C. § 1441 (b), asserting that jurisdiction is proper based on diversity of citizenship under 28 U.S.C. § 1332. Wyeth argues that Advocare was fraudulently joined and its citizenship should therefore not be considered in determining whether diversity is complete. On August 9, 2002, Plaintiffs filed the instant Motion to Remand in which they contend that joinder of Advocare is proper and seek to have this case remanded to state court.
AUTHORITIES
Title 28 U.S.C. § 1441, the general removal statute, allows a defendant to remove a case to the federal district court for the district and division within which the action is pending. 28 U.S.C.A. § 1441(a) (West 1994). Title 28 U.S.C. § 1332 (a) confers jurisdiction on district courts over civil actions between citizens of different states where the amount in controversy is over $75,000. For jurisdiction to exist under § 1332, diversity must be complete in that there may be no plaintiff and no defendant who are citizens of the same state. Wisconsin Dep't of Corrections v. Schacht, 524 U.S. 381, 388, 118 S.Ct. 2047, 2052, 141 L.Ed.2d 364 (1998). Furthermore, in a case removed based on diversity jurisdiction, no properly joined party may be a citizen of the state in which the action is brought. 28 U.S.C.A. § 1441(b) (West 1994).
Here, there is no dispute that the amount in controversy exceeds $75,000.
For purposes of diversity jurisdiction, Plaintiffs are residents and citizens of Texas; Advocare is a corporate citizen of Texas, and; all other defendants named in the First Amended Petition maintain their principle places of business and are incorporated in states other than Texas. Defendant asks the Court to apply the fraudulent joinder doctrine, arguing that Resident Defendant Advocare was named as a Defendant solely for the purpose of defeating diversity jurisdiction.
Notwithstanding its moniker, the fraudulent joinder doctrine applies to the misguided joinder as well as to the truly fraudulent. Poulos v. Naas Foods, Inc., 959 F.2d 69, 73 (7th Cir. 1992) ("When speaking of jurisdiction, `fraudulent' is a term of art. . . . Although false allegations of jurisdictional fact may make joinder fraudulent, in most cases fraudulent joinder involves a claim against an in-state defendant that simply has no chance of success, whatever the plaintiffs motives.") (citations omitted).
To prove fraudulent joinder, a defendant "must demonstrate either `outright fraud in the plaintiffs recitation of jurisdictional facts,' or that `there is absolutely no possibility that the plaintiff will be able to establish a cause of action against the in-state defendant in state court." Rodriguez v. Sabatino, 120 F.3d 589, 591 (5th Cir. 1997) (quoting Burden v. Gen. Dynamics Corp., 60 F.3d 213, 217 (5th Cir. 1995) and Cavallini v. State Farm Mut. Auto Ins. Co., 44 F.3d 256, 259 (5th Cir. 1995)). "The question, then, is simply whether the defendant can show that no possibility exists that the plaintiffs have stated a claim against [the non-diverse defendant]." Id. Finally, a court must examine the plaintiffs factual contentions in a light most favorable to the plaintiff and resolve all factual disputes in the plaintiffs favor, see id., and may "pierce the pleadings" and rely on affidavits or other documents to determine whether the party was fraudulently joined. LeJeune v. Shell Oil Co., 950 F.2d 267, 271 (5th Cir. 1992).
DISCUSSION
To ascertain whether Resident Defendant Advocare was fraudulently joined, we must determine whether Wyeth can show that no possibility exists that Plaintiffs can establish a cause of action against Advocare. In support of its fraudulent joinder argument, Wyeth avers that Advocare cannot be held liable to Plaintiffs because the PPA-containing products that caused Antonia Olivas's injuries were not made, marketed, or sold by Advocare. Wyeth argues that a prerequisite for Plaintiffs to recover from Advocare on any of their causes of action is that Advocare must have supplied the injury-producing products consumed by Antonia Olivas.
In an affidavit, Thomas B. Donohue, Jr., Manager and Sr. Vice President of Advocare, states that "Advocare has never manufactured, designed, tested, marketed, distributed, and-or sold Alka-Seltzer Plus, Robitussin, or Dimetapp," the PPA-containing products purchased and ingested by Antonia Olivas. Plaintiffs do not dispute this. Plaintiffs argue, however, that notwithstanding this fact, they have valid causes of action against Advocare under Texas law.
In their Petition, Plaintiffs attempt to establish causes of action against Advocare for strict liability, negligence and gross negligence, breach of implied warranty of merchantibility, breach of implied warranty of fitness for a particular purpose, negligent misrepresentation, breach of continuing duty to warn, civil conspiracy, and malice.
A. Negligence/Strict Liability
In their Motion to Remand, Plaintiffs implicitly admit that their negligence and strict liability claims are barred by Firestone Steel Prods. Co. v. Barajas, 927 S.W.2d 608, 615-16 (Tex. 1996), in which the court held that a plaintiff is barred from asserting a claim of negligence and strict liability against a defendant who did not supply the injury-producing product. Here, Advocare was not the supplier of any of the PPA products purchased and consumed by Antonia Olivas. Therefore, the Court finds that Plaintiffs are barred from asserting their negligence or strict liability causes of action against Advocare.
B. Negligent Misrepresentation
Plaintiffs argue that Barajas does not negate their remaining causes of action. Specifically, Plaintiffs contend that their negligent representation claim is not barred by Barajas because such theory is a separate specie of fraud and is a separate and independent tort from simple negligence. Wyeth counters this argument by stating that Plaintiffs cannot establish all the elements of a negligent misrepresentation claim. To succeed in such an action, Plaintiffs must show: (1) that Advocare made a representation in the course of its business or in a transaction in which it had an interest; (2) that Advocare supplied false information for the guidance of others; (3) that Advocare did not exercise reasonable care or competence in obtaining or communicating the information; and (4) that Plaintiffs suffered pecuniary loss by justifiably relying on the representation. Federal Land Bank Ass'n v. Sloane, 825 S.W.2d 439, 442 (Tex. 1991). Wyeth points out that Plaintiffs cannot show, in light of the fact that Advocare did not design, manufacture, or sell the injury-producing products, that Advocare had any pecuniary interests in inducing Plaintiffs to buy other companies' products. The Court agrees with Wyeth. Because Plaintiffs would be unable to establish all the elements of a negligent misrepresentation cause of action against Advocare, they are barred from asserting such claim.
C. Breach of Warranty
Wyeth contends that Plaintiffs have no possibility of recovering against Advocare on their breach of warranty claims. Wyeth cites Sanchez v. Liggett Meyers, Inc., 187 F.3d 486, 491 (5th Cir. 1999), for the proposition that Plaintiffs are barred from asserting their breach of the implied warranty of merchantibility and the implied warranty of fitness for a particular purpose because such statutory causes of action apply to sellers of goods at issue. The Court agrees. For there to be an implied warranty of merchantability, there must be a contract for the sale of goods between the seller and the buyer. TEX. Bus. COM. CODE ANN. § 2.314 (Vernon 1994). Here, there is no such relationship between Advocare and Plaintiffs since Advocare did not manufacture, market, or sell the PPA products at issue to Plaintiffs.
D. Duty to Warn
Barajas also bars Plaintiffs' duty to warn claim. The court in Barajas stated that a manufacturer owes no duty to a plaintiff "to warn or instruct about another manufacturer's products." Barajas, 927 S.W.2d at 616. The court reasoned that in traditional products liability law, it is "not enough that the seller merely introduced products of similar design and manufacture into the stream of commerce." Id. Here, Advocare did not supply the products purchased and ingested by Antonia Olivas and it owed no duty to warn Plaintiffs of other manufacturers' products. Advocare, therefore, cannot be held liable to Plaintiffs on that basis.
E. Civil Conspiracy
Plaintiffs' remaining cause of action asserted against Advocare is civil conspiracy. The elements for a claim of civil conspiracy are: 1) a combination of two or more persons; 2) an object to be accomplished (an unlawful purpose or a lawful purpose by unlawful means); 3) a meeting of the minds on the object or course of action; 4) one or more unlawful, overt acts; and 5) damages as the proximate result. Insurance Co. of North America v. Morris, 981 S.W.2d 667, 675 (Tex. 1998).
In support of their civil conspiracy claim against Advocare, Plaintiffs argue that Defendants conspired to suppress the truth about the dangers associated with their PPA products and deprived Plaintiffs of the necessary information to make an informed choice before purehasing a PPA product. In response, Wyeth argues that a conspiracy, standing alone, does not create otherwise nonexistent liability. Tilton v. Marshall, 925 S.W.2d 672, 681 (Tex. 1996). In Tilton, the plaintiffs sued Tilton and other defendants asserting fraud, conspiracy, and intentional infliction of emotional distress. The plaintiffs alleged that Tilton had fraudulently represented, through televised programs, that church contributors would receive whatever was requested if they made monetary donations to his ministry. Mary Elizabeth Turk had been suffering from severe physical pain. She began to make donations to Tilton's ministry and requested healing. When her pain worsened, she consulted a doctor and discovered she had rectal cancer. Turk died thereafter. Plaintiffs sued on behalf of her estate. The Texas Supreme Court held that the church contributors could not maintain a fraud claim against Tilton: "[a]s long as the representation forming the basis of the fraud claim is a religious doctrine or belief, it is constitutionally protected from judicial inquiry." Id. at 678. Having determined that the Tilton defendants could not be liable for the underlying tort, the Supreme Court barred plaintiffs' conspiracy claims as well, reasoning that "a defendant's liability for conspiracy depends on participation in some underlying tort for which the plaintiff seeks to hold at least one of the named defendants liable." Id. at 681. Here, because Advocare is not liable for any underlying tort, it cannot be liable for conspiracy.
The Barajas court also addressed a civil conspiracy claim and held that where a defendant owes no duty to the plaintiff, the civil conspiracy claim is negated as a matter of law. Barajas, 927 S.W.2d at 617. Here, Advocare owes no duty to the Plaintiffs because it did not manufacture Dimetapp, Alka-Seltzer Plus, or Robitussin. Thus, absent such a duty, Advocare cannot be liable to Plaintiffs on the basis of a civil conspiracy claim.
CONCLUSION
In light of the foregoing, the Court finds that Wyeth has met its burden of showing that Plaintiffs will not be able to establish any of their causes of action against Advocare. Therefore, the Court finds that Advocare was not properly joined and its citizenship should not be considered in determining whether the instant case is properly removed pursuant to 28 U.S.C § 1441(b). Accordingly, the Court finds that the case was properly removed and that the Court may exercise jurisdiction based on complete diversity. The Court is, therefore, of the opinion that Plaintiffs' Motion to Remand should be denied.
Accordingly, IT IS HEREBY ORDERED that Plaintiffs' "Motion to Remand" is DENIED.