Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_07-cv-01988/USCOURTS-cand-3_07-cv-01988-0/pdf.json

Parties Involved:
McKesson Corporation
Defendant
Novartis Corporation
Defendant
Novartis Pharmaceuticals Corporation
Defendant
Theresa Waldon
Plaintiff

Document Text:

United States District Court

For the Northern District of California

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Docket No. 8

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Docket No. 14

United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

THERESA WALDON,

 Plaintiff,

 v.

NOVARTIS PHARMACEUTICALS CORP.,

Defendant. /

No. C07-01988 MJJ

ORDER DENYING PLAINTIFF’S

MOTION TO REMAND

INTRODUCTION

Before the Court is Plaintiff Theresa Waldon’s (“Plaintiff” or “Waldon”) Motion to

Remand.1

 Defendant Novartis Pharmaceuticals Corporation (“NPC”) and Novartis Corporation

(collectively, “Novartis”) oppose the Motion to Remand.2

 For the following reasons, the Court

DENIES Plaintiff’s Motion to Remand.

FACTUAL & PROCEDURAL BACKGROUND

On March 28, 2007, Plaintiff Theresa Waldon, a resident of Georgia, filed suit in California

state court against Defendants NPC, Novartis, and McKesson Corporation (“McKesson”)

(collectively, “Defendants”). NPC is incorporated in Delaware, with its principal place of business

in New Jersey. Novartis is incorporated in New York, with its principal place of business in New

York. McKesson is incorporated in Delaware, with its alleged principal place of business in

Case 3:07-cv-01988-MJJ Document 24 Filed 06/18/07 Page 1 of 5
United States District Court

For the Northern District of California

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California. Plaintiff alleged harm from an allergic reaction suffered as a result of the ingestion of the

prescription medication Trileptal. 

On April 9, 2007, prior to service upon any of the Defendants, Novartis noticed removal to

federal court pursuant to 28 U.S.C. § 1441(b). Subsequently, on April 12, 2007, Plaintiff properly

served all Defendants. On May 4, 2007, Plaintiff filed a Motion to Remand on the grounds that

there was not complete diversity. In opposition, Novartis asserts that McKesson’s citizenship should

not be considered, as they were not properly joined and served at the time of removal. Novartis

further argues that McKesson is fraudulently joined, and that this Court should ignore McKesson’s

citizenship in its removal analysis.

LEGAL STANDARD

Pursuant to 28 U.S.C. § 1441(a), a defendant in a civil action may remove a case from state

court to federal district court if the district court has subject matter jurisdiction over the case. The

district court has subject matter jurisdiction over a case if there is diversity of citizenship between

the parties or if the action is founded on a claim arising under the Constitution, laws, or treaties of

the United States. 28 U.S.C. § 1441(b); 28 U.S.C. § 1331 (federal question); 28 U.S.C. § 1332

(diversity jurisdiction); Ethridge v. Harbor House Restaurant, 861 F.2d 1389, 1393 (9th Cir. 1988). 

Section 1441(b) provides that if federal jurisdiction is based on diversity of citizenship, removal is

available only if no defendant is a citizen of the forum state. 28 U.S.C. § 1441(b). As the party

seeking to remove the action, the defendant bears the burden of establishing that subject matter

jurisdiction exists. Ethridge, 861 F.2d at 1393. Because the Court strictly construes the removal

statute against removal, if there is any doubt as to the existence of federal jurisdiction, the Court

should remand the matter to state court. See Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). 

The procedure for removal is set forth in 28 U.S.C. § 1446. This section provides that a

defendant seeking to remove a civil action to federal court must file a notice identifying the basis for

removal “within 30 days after the receipt by the defendant, through service or otherwise, of a copy

of the initial pleading setting forth the claim for relief upon which such action or proceeding is

based.” 28 U.S.C. § 1446(b). 

Pursuant to 28 U.S.C. § 1447(c), a plaintiff may challenge the propriety of removal based on

Case 3:07-cv-01988-MJJ Document 24 Filed 06/18/07 Page 2 of 5
United States District Court

For the Northern District of California

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 Untimely removal is a procedural, rather than a jurisdictional, defect. Maniar v. Fed. Deposit Ins. Corp., 979 F.2d

782, 785 (9th Cir. 1992). 

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procedural defects and move to remand a case to state court within 30 days after the filing of the

notice of removal. See N. Cal. Dist. Council of Laborers v. Pittsburg-Des Moines Steel Co., 69 F.3d

1034, 1037 (9th Cir. 2003).3

ANALYSIS

A. Does Removal Prior to Service of Any Defendant Satisfy 28 U.S.C. § 1441(b)?

Because Plaintiff chose to file in state court and Novartis noticed removal, the dispute over

this Court’s jurisdiction arises under the right to removal governed by 28 U.S.C. § 1441(b). Plaintiff

asks the Court to remand on the basis that Section 1441(b) prohibits removal if a party “joined and

served” shares common citizenship with the venue in which the suit is filed. Plaintiff argues that to

hold otherwise would sanction a “procedural trap” and create a “very strange anomaly.” In

opposition, Novartis urges the Court to adhere to a strict interpretation of the statutory language of

Section 1441(b). Novartis asserts that because McKesson remained an unserved defendant at the

time of removal, it should not be considered “properly joined and served” as specified by Section

1441(b), and as such, their citizenship should not bear on this Court’s consideration of the validity of

the removal.

The language of 28 U.S.C. § 1441(b) provides that a case may be removed on diversity

grounds “only if none of the parties in interest properly joined and served as defendants is a citizen

of the State in which such action is brought.” 28 U.S.C. § 1441(b). This case was filed in California

state court, and the parties to this action do not dispute that McKesson is a citizen of California.

Thus, the remaining question is whether McKesson’s citizenship should be taken into account for

purposes of removal. If McKesson is included, Section 1441(b) would bar removal as McKesson’s

California citizenship aligns with the California court in which suit was filed. If McKesson is

excluded, removal under Section 1441(b) would be permitted, as complete diversity existed at the

time of removal. For the reasons set forth below, the Court finds that McKesson’s citizenship

should not be considered because McKesson was not properly joined and served at the time of

removal.

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United States District Court

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While this Court recognizes that the Holmstrom court presents an appealing interpretation of Section 1441(b), this

Court does not find Holmstrom’s justification for departing from the statutory language persuasive.

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B. McKesson Was Not Properly “Joined and Served” At the Time of Removal.

As explained below, the Court finds that McKesson was not properly “joined and served” at

the time of removal as required by 28 U.S.C. § 1441(b).

District Courts are split as to the issue of unserved defendants removing prior to service of

any defendants. This Court finds guidance from the court’s reasoning in City of Ann Arbor

Employees’ Retirement Sys. v. Gecht, 2007 WL 760568 (N.D. Cal. March 9, 2007). In Gecht, the

court addressed a removal noticed by an unserved defendant prior to service of any defendants. Id.

at *1. The court in Gecht was sympathetic to the plaintiff’s arguments, which align with those of the

Plaintiff in the instant case, noting that they possessed “a great deal of appeal.” Id. at *6. However,

the court found the plain language of Section 1441(b) persuasive, recognizing that “a court may

depart from the plain language of a statute only under ‘rare and exceptional circumstances.’” Id.

(quoting Demarest v. Manspeaker, 498 U.S. 184 (1991)). Gecht found that a court could only “look

beyond the express language of a statute where a literal interpretation would thwart the purpose of

the overall statutory scheme or lead to an absurd or futile result.” Id. (quoting Albertson’s Inc. v.

Commissioner of Internal Revenue, 42 F.3d 537, 545 (9th Cir. 1994); see also Delgado v. Shell Oil

Co., 231 F.3d 165, 177 (5th Cir. 2000) (finding that a lack of service was no bar to removal). The

Court finds the reasoning of Gecht to be persuasive. 

Plaintiff urges otherwise and requests this Court to find that “public policy and fundamental

fairness should prevail over an overly technical reading. . .” (Pl.’s Reply at 4:21-22.) Plaintiff cites

Holmstrom v. Harad, 2005 WL 1950672 (N.D. Ill. 2005) in support of her argument that the

exclusion of McKesson would result in an unfair outcome. Beyond descriptions of potentially unfair

results arising from a plain text interpretation of Section 1441(b) and the Holmstrom court’s analysis

of the effects of service on removal4

, Plaintiff does not cite any authority to suggest a different

legislative purpose than that apparent from the text of the statute. The court in 

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Plaintiff asks the Court to “realign” the parties to conform with “their true interests in the litigation.” (Pl.’s Mot.

to Remand. p. 13.) Realignment is appropriate when “no actual, substantial controversy exists between the parties on one

side of the dispute and their named opponents.” 32A Am. Jur. 2d Federal Courts § 787. The potentially similar interests of

Novartis and McKesson in the instant action have no bearing on realignment, as they are both named as defendants.

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Gecht speaks to this eloquently in its criticism of Holmstrom:

[I]f Congress had wanted to ensure that removal would not be appropriate until it was

clear that Plaintiff was trying to prevent removal by speciously naming resident

defendants, Congress could have provided that no removal petition could be filed

until one or more nonresident defendant had been joined and served. The statute also

could have been written to give a plaintiff, e.g., 30 or 60 days to effect service before

permitting a defendant to remove.

Gecht, 2007 WL 760568 at *9.

Because this Court finds no compelling reason to depart from the plain text of section

1441(b), the Court finds that McKesson’s citizenship has no bearing on the sufficiency of the

removal at its time of notice. 

Additionally, because the Court has already determined, on other grounds, that removal is

appropriate, the Court need not reach the merits of the Defendant’s arguments addressing improper

joinder of McKesson.5

CONCLUSION

For the foregoing reasons, the court DENIES Plaintiff’s Motion to Remand.

IT IS SO ORDERED.

Dated: June___, 2007 

MARTIN J. JENKINS

UNITED STATES DISTRICT JUDGE

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