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Stern v. Mylan Bertek Pharmaceuticals

July 29, 2008

NICHOLAS STERN, PLAINTIFF,
v.
MYLAN BERTEK PHARMACEUTICALS, INC., F/K/A BERTEK PHARMACEUTICALS, INC.; MYLAN PHARMACEUTICALS, INC. F/K/A MYLAN LABORATORIES, INC.; CARDINAL HEALTH 409, INC. F/K/ R.P. SCHERER CORPORATION; AND GENPHARM, DEFENDANTS.
KATHRYN FLOR, PLAINTIFF,
v.
MYLAN BERTEK PHARMACEUTICALS, INC., F/K/A BERTEK PHARMACEUTICALS, INC.; MYLAN PHARMACEUTICALS, INC. F/K/A MYLAN LABORATORIES, INC.; CARDINAL HEALTH 409, INC. F/ R.P. SCHERER CORPORATION; AND GENPHARM, DEFENDANTS.



The opinion of the court was delivered by: Rodriguez, Senior District Judge

MEMORANDUM OPINION & ORDER

These matters come before the Court on motions to remand to the Superior Court of New Jersey, Atlantic County. Because the two Plaintiffs filed their actions simultaneously against the same Defendants, in the interest of judicial economy, the Court will dispose of the companion cases collectively. For the following reasons, the Court will grant each Plaintiff's motion to remand.

I. BACKGROUND

Nicholas Stern and Kathryn Flor ("Plaintiffs") separately, but simultaneously, filed actions in the Superior Court of New Jersey, Atlantic County, on November 20, 2007. On November 27, 2007, the Mylan Defendants ("Mylan") filed a petition to remove both actions to this Court. The next day, November 28, Defendant Cardinal Health 409, Inc. ("Cardinal 409") accepted service of the Plaintiffs' summonses and Complaints at its principal place of business in Somerset, New Jersey. On November 30, Mylan mailed its Notice of Removal to the Clerk of the Superior Court of New Jersey, Atlantic County. The notice was received and filed by the Clerk on December 3, 2007.

As a primary basis removing the cases, Mylan contended that Cardinal 409 was a Delaware corporation with its principal place of business in Ohio. (Def. Opp'n Br., p. 3.) This would have rendered removal of the actions proper, as no defendant would be a citizen of the forum state. See 28 U.S.C. § 1332(c)(1) (a corporation is a citizen of both its state of incorporation and the state where it has its principal place of business). Plaintiffs, however, contend in the instant motions to remand that Cardinal 409 is a Delaware corporation with its principal place of business in New Jersey. (Pl. Flor's Br., p. 3.) Because a defendant is a citizen of the forum, Plaintiffs argue that the removal was inappropriate under 28 U.S.C. § 1441(b), which provides that actions may be removed on the basis of diversity of citizenship "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."

Even if Cardinal 409 has its principal place of business in New Jersey, Mylan contends that the motion to remand should still be denied because Cardinal 409 was not properly "joined and served" at the time removal was effected. (Def. Opp'n Br., p. 3-4.) This would satisfy § 1441(b), as no forum defendants would have been properly joined and served before the action was removed. Plaintiffs answer that such an interpretation of the statute frustrates Congressional intent. They argue the sole purpose of the "joined and served" requirement is to prevent forum defendants from being joined simply to block removal. (Pl. Stern's Brief, p. 10-11.) Nonetheless, Plaintiffs argue that even if the Court adopts Defendant's interpretation of the "joined and served" provision, the remand should still be granted, since Cardinal 409 was properly joined and served before removal became effective. (Pl. Stern's Brief, p. 12.) Plaintiffs posit that removal is incomplete until three steps found within 28 U.S.C. § 1446(d) are performed by the party seeking removal. Alternatively, Plaintiffs argue that the Superior Court was not divested of its jurisdiction until it received notice of removal from Mylan. Thus, Plaintiffs claim that because the Superior Court received notice after Cardinal 409 accepted service, the forum defendant was "joined and served" before removal was effected. In turn, Mylan argues that filing the removal petition in the District Court makes removal effective immediately, so removal was appropriate because it was effected before Cardinal 409 was joined and served.

II. DISCUSSION

On a motion to remand, the removing party bears the burden of establishing all of the elements of federal subject matter jurisdiction. Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990). "The Third Circuit mandates that all doubts are to be resolved against removal." Russ v. Unum Life Ins., 442 F. Supp. 2d 193, 196 (D.N.J. 2006) (citing Boyer, 913 F.2d at 111 (citing Steel Valley Auth. v. Union Switch & Signal Div., 809 F.2d 1006 (3d Cir. 1987))). Thus, such a presumption against removal ensures that Congress's intent to limit federal diversity jurisdiction is honored. See Samuel-Bassett v. KIA Motors America, 357 F.3d 392, 396 (3d Cir. 2004).

A. Citizenship of Defendant Cardinal 409

Assuming that Cardinal 409 was properly joined and served as a Defendant, Plaintiffs contend that because Cardinal 409 is a citizen of New Jersey, the forum defendant rule precludes removal of the suit. See 28 U.S.C. § 1441(b) (actions may be removed on the basis of diversity of citizenship "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"). In opposition, Mylan argues that removal was proper because Cardinal 409 is not a citizen of New Jersey since it does not have a principal place of business in New Jersey, see 28 U.S.C. § 1332(c)(1).

The Court finds no merit in Mylan's position. Cardinal 409 has repeatedly claimed to have a principal place of business in New Jersey. See Pl. Stern's Exh. 5, Notice of Removal from Dambaugh v. Mylan, Inc., No. 07-4411; see also Pl. Flor's Exh. 7, Compl. filed in Wyeth v. Ranbaxy Laboratories Ltd., No. 3:05-cv-02252 (GEB/JJH), Doc. [1], ¶ 1B. Further, Mylan admits that Cardinal 409 is now known as "Catelent [sic] Pharma Solutions, Inc.," a corporation which has its principal place of business in New Jersey. (Def.'s Opp'n Br., p. 3.) Mylan does not contend that Catalent Pharma Solutions has merged with Cardinal 409, or even that the two names represent two separate entities. Nor does Mylan allege that Cardinal 409 has been acquired, or otherwise relocated, by Catalent. Mylan simply claims that Cardinal 409 is now known as Catalent Pharma, Inc., a corporation unnamed in the present action. This Court cannot allow corporate defendants to control the forum of potential litigation simply by periodically changing names. See generally Dandrea v. Malsbary Mfg. Co., 839 F.2d 163 (3d Cir. 1988) (acknowledging that a corporation sued under a former name "was never a nonexistent entity; [but rather] it was a party called by its former name when it had taken a different name" and was thus the same entity legally).

Although Mylan points to Cardinal 409's Answer to the Complaint to establish citizenship, see Def.'s Opp'n Br., p.3, that document does not reveal where Cardinal 409's principal place of business is located. See Cardinal 409's Answer, ¶ 9. Notwithstanding the fact that a corporate name change has no impact on the corporation's identity, see Dandrea, 839 F.2d at 166, Cardinal 409 and Mylan both ultimately seem to recognize that Cardinal 409 and Catalent are one and the same. Despite that Plaintiffs may have misnamed Cardinal 409, the corporation that Plaintiffs have sued maintains its principal place of business in New Jersey.*fn1

In light of the strong presumption against removal, an evaluation of the record indicates that Mylan has not carried its burden in establishing Cardinal 409's citizenship. Thus, this Court finds that Cardinal 409, now known as Catalent Pharma Solutions, Inc., does indeed have its principal place of business in New Jersey. Therefore, the forum defendant rule prohibits removal so long as ...


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