Brown v. Johnson & Johnson

Background

Bridgett Brown and Elizabeth Dawson filed related state-court actions alleging that medications they were prescribed caused them to develop breast cancer. The named drug-maker defendants—Johnson & Johnson, Janssen Pharmaceuticals, Inc., Janssen Research & Development LLC, and Eli Lilly and Company—removed the actions to the Northern District of California. Each plaintiff then moved to remand, meaning to return the case to state court.

The plaintiffs argued that the federal court lacked both federal-question jurisdiction and diversity jurisdiction. The drug-maker defendants relied on diversity jurisdiction under 28 U.S.C. § 1332(a). They acknowledged that the plaintiffs and Kaiser Permanente International were all citizens of California but argued that Kaiser was a fraudulently joined defendant who should be disregarded when determining jurisdiction.

Jurisdiction and Fraudulent Joinder

Diversity jurisdiction generally requires every plaintiff to be a citizen of a different state from every defendant. A nondiverse defendant may be disregarded if the defendant was fraudulently joined. The removing defendants bear a heavy burden to show either actual fraud in the jurisdictional allegations or that the plaintiff could not possibly establish a state-law claim against the nondiverse defendant. The court must also consider whether any pleading defect could be cured by amendment.

The plaintiffs alleged claims against Kaiser Permanente International for strict products liability based on failure to warn, general negligence, and negligence based on failure to warn. The court examined only the general-negligence claim because it was dispositive.

The drug-maker defendants argued that Kaiser Permanente International, acting as a pharmacy, owed the plaintiffs only a duty to accurately fill prescriptions. The court rejected that characterization as too narrow. The plaintiffs also alleged that Kaiser insured and treated them and sold and distributed the drugs. Their complaints further alleged that the defendants, including Kaiser Permanente International, participated in the design, development, manufacturing, testing, advertising, marketing, promotion, labeling, warning, distribution, sale, and post-marketing safety monitoring of the drugs.

The court concluded that the defendants had not shown that the plaintiffs could not possibly state a negligence claim against Kaiser Permanente International or another Kaiser entity. The defendants did not dispute that other Kaiser entities were also California citizens and did not provide authority establishing that an insurer, treatment provider, or distributor could not be liable for negligence. Because the plaintiffs could potentially recover against Kaiser on at least one claim, Kaiser was a proper defendant. The court therefore held that complete diversity did not exist and that the federal court lacked jurisdiction over the cases.

Attorney’s Fees

Elizabeth Dawson requested attorney’s fees related to the remand motion, arguing that the removal lacked an objectively reasonable basis. The court denied that request. It found that the defendants’ argument—that Kaiser could not be liable because it was a pharmacy—was grounded in law and that the parties genuinely disputed whether Kaiser Permanente International provided non-pharmaceutical services. The court therefore concluded that removal was not objectively unreasonable.

Disposition

Judge Araceli Martinez-Olguin granted Brown’s and Dawson’s motions to remand. The court directed the clerk to transmit the files to the Alameda County Superior Court and close the federal cases. Dawson’s motion for attorney’s fees was denied. All other pending motions were denied as moot, without prejudice to raising those arguments upon remand.