BROWN v. Johnson & Johnson

*NOT FOR PUBLICATION*

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

____________________________________

MAUREEN ABBEDUTTO, : Civ. Action No. 17-5812(FLW)

:

Plaintiff, :

: OPINION

v. :

:

JOHNSON & JOHNSON, et al., :

:

Defendants. :

____________________________________:

NANCY BAKER, : Civ. Action No. 17-7712(FLW)

:

Plaintiff, :

:

v. :

:

JOHNSON & JOHNSON, et al., :

:

Defendants. :

____________________________________:

CAROLYN BENNETT, : Civ. Action No. 17-7723(FLW)

:

Plaintiff, :

:

v. :

:

JOHNSON & JOHNSON, et al., :

:

Defendants. :

____________________________________:

EDNA BROWN, : Civ. Action No. 17-5724(FLW)

:

Plaintiff, :

:

v. :

:

JOHNSON & JOHNSON, et al., :

:

Defendants. :

____________________________________

KIM KNIGHT, : Civ. Action No. 17-5796(FLW)

:

Plaintiff, :

:

v. :

:

JOHNSON & JOHNSON, et al., :

:

Defendants. :

____________________________________:

WOLFSON, Chief Judge:

In the instant matter, Plaintiffs Maureen Abbedutto, Nancy Baker, Carolyn

Bennett, Edna Brown, and Kim Knight (collectively “Plaintiffs”), all Illinois residents,

each move to remand their cases to state court, arguing that removal to federal court

by Johnson & Johnson, Inc. (“J&J”) was improper because defendant Walgreen Co.

(“Walgreen”), also an Illinois resident, was not fraudulently joined as a defendant.

Because I find that Walgreen was properly joined in these cases, Plaintiffs’ motions

are GRANTED, and these cases are remanded to the Illinois state courts from which

they were brought.

BACKGROUND and PROCEDURAL HISTORY

The above-referenced actions are companion cases to the Multidistrict

Litigation (“MDL”), titled “Johnson & Johnson Talcum Powder Products Marketing,

Sales Practices, and Products Liability Litigation,” Civ. Action No. 16-2738, which

has been assigned to this Court. Plaintiffs first filed individual suits in Illinois state

court. In their state-court complaints, Plaintiffs named as defendants the following

entities: Johnson & Johnson, Johnson & Johnson Consumer, Inc., Johnson & Johnson

Consumer Companies, Inc., Johnson & Johnson Consumer Logistics Services, LLC,

Johnson & Johnson Baby Products, Inc. (collectively, “J&J”), Imerys Talc America,

Inc. f/k/a Luzenac America, Inc. (“Imerys”), 1 and Walgreen Co. (“Walgreen”)

(together with J&J as “Defendants”). Invoking diversity jurisdiction, J&J removed

these matters to various United States District Courts in Illinois, which were then

transferred to this Court by the Judicial Panel on Multidistrict Litigation. Before me

are Plaintiffs’ motions for remand.

As in all other member cases in this MDL, Plaintiffs’ actions arise from

diagnoses of ovarian cancer, which each Plaintiff alleges was caused by regular,

perineal use of Johnson & Johnson Baby Powder and Shower to Shower talcum

powder products. Compl.,¶ 31.2 Relevant here, Plaintiffs allege that “Walgreen was

marketing, promoting, and selling the PRODUCTS in the regular course of business.”

Id. at ¶ 19. Plaintiffs further allege that, “[a]s a manufacturer of its own products

containing talc, Walgreen had actual knowledge that the use of the PRODUCTS in

the perineal area could cause ovarian cancer.” Id. at ¶ 20. In total, Plaintiffs bring

eight claims against Walgreen: (1) failure to warn, (2) negligence, (3) breach of

express warranty, (4) breach of implied warranty, (5) negligent misrepresentation,

(6) fraudulent misrepresentation, (7) civil conspiracy, and (8) concerted action.

1 Since removal, Imerys has petitioned for bankruptcy, and as such, all matters

i n v o l v i n g I m e r y s h a v e b e e n stayed by the automatic stay.

2 Because the complaints in all these cases are substantially similar, I will only cite

the Brown Complaint.

In the instant matter, Plaintiffs seek remand of these actions to state court on

the basis that complete diversity is lacking since Walgreen is a citizen of Illinois, and

that it was properly joined. In response, J&J argues that despite the various counts

asserted against Walgreen, Plaintiffs have not demonstrated that there are any

colorable claims against Walgreen. More specifically, as to Plaintiffs’ failure-to-warn

claim, J&J contends that Walgreen is not liable under 735 ILCS 5/2–621, Illinois’s

products liability statute, because Walgreen, as an innocent seller, should be

dismissed from suit. For the reasons that follow, I disagree.3

DISCUSSION

Pursuant to 28 U.S.C. § 1407, this civil action was transferred to this Court as

part of the Johnson & Johnson Talcum Powder Products multidistrict litigation

("MDL"). "The legislative history of § 1407 . . . demonstrates that Congress intended

transferee courts to have broad pretrial authority." In re Patenaude, 210 F.3d 135,

144 (3d Cir. 2000). "Under the Federal rules the transferee district court [has]

authority to render summary judgment, to control and limit pretrial proceedings, and

to impose sanctions for failure to make discovery or comply with pretrial orders." Id.

(citation omitted). Accordingly, as a preliminary matter, to the extent that the parties

rely on Seventh Circuit law in the context of remand, this Court notes that such law

does not govern the instant motion. Specifically, "[a]s an MDL court sitting within

the Third Circuit, [this District Court] must apply [this] Court of Appeals' fraudulent

3 Because I find that Plaintiffs have alleged a colorable failure-to-warn claim

a g a i n s t W a l g r e e n , I n e e d n ot address all other counts.

joinder standard." In re Diet Drugs (Phentermine, Fenfluramine, Dexfenfluramine)

Prod. Liab. Litig., No. 03-20128, 2003 U.S. Dist. LEXIS 12228, 2003 WL 21973329,

at *2 (E.D. Pa. June 12, 2003) (citing In re Korean Airlines Disaster, 829 F.2d 1171,

1174, 265 U.S. App. D.C. 39 (D.C. Cir. 1987), aff'd sub nom. Chan v. Korean Air Lines,

Ltd., 490 U.S. 122, 109 S. Ct. 1676, 104 L. Ed. 2d 113 (1989)); In re Ikon Office

Solutions, Inc. Sec. Litig., 86 F. Supp. 2d 481, 484 (E.D. Pa. 2000)); see also In Re

Plavix Prod. Liab. & Mktg. Litig., No. 3:13-CV-03610-FLW, 2014 U.S. Dist. LEXIS

142910, 2014 WL 4954654, at *6-*8 (D.N.J. Oct. 1, 2014) (applying the Third Circuit's

fraudulent joinder standard to a matter that was initially filed in California state

court and subsequently removed to the U.S. District Court for the Northern District

of California, where it was transferred to the District of New Jersey as part of an

MDL).

STANDARD OF REVIEW

As the Transferee Judge in an MDL, I apply the procedural law of the Third

Circuit. See In re Diet Drugs (Phentermine, Fenfluramine, Dexfenfluramine) Prod.

Liab. Litig., No. 03-20128, 2003 U.S. Dist. LEXIS 12228 (E.D. Pa. June 12, 2003)

(citing In re Korean Airlines Disaster, 829 F.2d 1171, 1174 (D.C. Cir. 1987), aff'd sub

nom. Chan v. Korean Air Lines, Ltd., 490 U.S. 122 (1989)). Under 28 U.S.C. § 1441,

"any civil action brought in a State court of which the district courts of the United

States have original jurisdiction, may be removed by the defendant or defendants to

the district court." The defendant seeking to remove the matter bears the burden of

showing that (1) federal subject matter jurisdiction exists, (2) removal was timely

filed, and (3) removal was proper. 28 U.S.C. §§ 1441, 1446, 1447; Boyer v. Snap-on

Tools Corp., 913 F.2d 108, 111 (3d Cir. 1990), cert. denied, 498 U.S. 1085, 111 S. Ct.

959, 112 L. Ed. 2d 1046 (1991). After a case has been removed, the district court,

however, may nonetheless remand it to state court if the removal was procedurally

defective or subject matter jurisdiction is lacking. 28 U.S.C. § 1447(c).

In cases where subject matter is based on diversity jurisdiction, see 28 U.S.C.

§ 1332, each party must be of diverse citizenship from each other and the amount in

controversy must exceed $75,000. 28 U.S.C. § 1332(a); Grand Union Superm. of the

Virgin Isl., Inc., v. H.E. Lockhart Mgmt., Inc., 316 F.3d 408, 410 (3d Cir. 2003).

Additionally, Section 1441(b)(2) imposes another condition on removal known as the

“forum defendant rule,” which provides that an "action otherwise removable solely on

the basis of [diversity] jurisdiction . . . may not be removed if any of the parties in

interest properly joined and served as defendants is a citizen of the State in which

such action is brought.” “Therefore, the forum defendant rule prohibits removal based

on diversity where a defendant is a citizen of the forum state—the state in which the

plaintiff originally filed the case.” In Re Plavix Prod. Liab. & Mktg. Litig., 2014 U.S.

Dist. LEXIS 142910, 2014 WL 4954654, at *3 (citing Blackburn v. United Parcel

Service, Inc., 179 F.3d 81, 90 n.3 (3d Cir. 1999)).

FRAUDULENT JOINDER

An exception to the requirement that removal be based solely on complete

diversity is the doctrine of fraudulent joinder. In re Briscoe, 448 F.3d 201, 215–16 (3d

Cir. 2006). Where multiple defendants are named, but one or more are not of diverse

citizenship from the plaintiff, “the diverse defendant[s] may still remove the action if

[they] can establish that the non-diverse defendants were ‘fraudulently’ named or

joined solely to defeat diversity jurisdiction.” Id. at 216. The Third Circuit has

instructed “that joinder is fraudulent where ‘there is no reasonable basis in fact or

colorable ground supporting the claim against the joined defendant, or no real

intention in good faith to prosecute the action against the defendant or seek a joint

judgment.’” Boyer, 913 F.2d at 111 (quoting Abels v. State Farm Fire & Cas. Co., 770

F.2d 26, 32 (3d Cir. 1985)); Batoff v. State Farm Ins. Co., 977 F.2d 848, 852 (3d Cir.

1992) (describing a claim as not colorable if it is “wholly insubstantial and frivolous”).

Accordingly, a court’s determination of fraudulent joinder does not focus on whether

plaintiff’s claims are “plausible” under Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) or

Rule 12(b)(6), rather it focuses on whether they are more than “frivolous.” In re

Briscoe, 448 F.3d at 218; Batoff, 977 F.2d at 852. Importantly, “it is possible that a

party is not fraudulently joined, but that the claim against that party ultimately is

dismissed for failure to state a claim upon which relief may be granted.” In re Briscoe,

448 F.3d at 218 (quoting Batoff, 977 F.2d at 852).

To determine fraudulent joinder, “the district court must focus on the plaintiff’s

complaint at the time the petition for removal was filed.” McBride, LEXIS 169330, at

*13 (quoting Hogan v. Raymond Corp., 536 F. App’x 207, 211 (3d Cir. 2013) (citations

omitted). “[A] court must first ‘ask whether, on the face of the complaint, there are

sufficient allegations concerning identity and conduct to justify consideration of their

citizenship." In re Briscoe, 448 F.3d at 218 (quoting Abels, 770 F.2d at 29).

ANALYSIS

Plaintiffs’ tort claims arise from decades of regular perineal application of

Johnson & Johnson Baby Powder and Shower to Shower talcum powder. Compl.,¶

31. In Count 12, Plaintiffs assert that Walgreen is liable for its failure to warn of talc’s

defects. Id. at ¶ 171. Specifically, Plaintiffs allege that J&J talcum powder products

failed to contain adequate warnings, instructions, or information about the increased

risk of ovarian cancer associated with perineal use, while representing the product

as safe for use and application to the female genital area. Id. at ¶ 185.

J&J maintains that Walgreen, as a “pass-through retailer,” merely provided

“shelf-space” for J&J products. (Notice of Removal, ¶¶ 27, 28). J&J argues that

Plaintiffs’ allegations regarding Walgreen’s knowledge of the J&J talcum powder

products’ defects are lacking; and in that connection, J&J submits a certification that

attests to the following: “Walgreen Co. did not have any knowledge or information

regarding any alleged defects of [J&J talcum powder] products, which allegedly

caused injury or damages to purchasers or users.” See Brindley Aff., ¶ 12. Hence,

J&J reasons that without the requisite knowledge, Walgreen was simply an innocent

seller that cannot be subject to liability under Illinois’s product liability laws.

Turning to Illinois product liability law, “all persons in the distributive chain

are liable for injuries resulting from a defective product.” Thomas v. Kaiser

Agricultural Chemicals, 407 N.E.2d 32, 36 (Ill. 1980). Moreover, “the failure to warn

of a product's dangerous propensities may serve as the basis for holding the

manufacturer or seller strictly liable in tort.” Hammond v. North American Asbestos

Corp, 454 N.E.2d 210, 216 (Ill. 1983) (citing Woodill v. Parke Davis & Co., 402 N.E.2d

194 (Ill. 1980)). Nevertheless, nonmanufacturing defendants qualify for a statutory

exception to supply-chain product liability under 735 ILCS 5/2–621. The statute

provides that:

(b) Once the plaintiff has filed a complaint against the manufacturer or

manufacturers, and the manufacturer or manufacturers have or are

required to have answered or otherwise pleaded, the court shall order

the dismissal of a strict liability in tort claim against the certifying

defendant or defendants, provided the certifying defendant or

defendants are not within the categories set forth in subsection (c) of

this Section. Due diligence shall be exercised by the certifying defendant

or defendants in providing the plaintiff with the correct identity of the

manufacturer or manufacturers, and due diligence shall be exercised by

the plaintiff in filing an action and obtaining jurisdiction over the

manufacturer or manufacturers . . . .

735 ILCS 5/2–621(b). Based on this provision, “any nonmanufacturing defendant

who has not contributed to the alleged defect is entitled automatically to dismissal

from a products liability action.” Harris v. Johnson & Johnson, 2017 U.S. Dist. LEXIS

220407, at *5-6 (N.D. Ill. May 30, 2017) (quoting Yount v. Shashek, 472 F. Supp. 2d

1055, 1065 (S.D. Ill. 2006); see also Murphy v. Mancari's Chrysler Plymouth, Inc., 887

N.E.2d 569, 573 (Ill. App. Ct. 3d Dist. 2008) (“Pursuant to section 2-621, also known

as the ‘seller's exception,’ a nonmanufacturer defendant in a strict product liability

action may be dismissed from the action if it certifies the correct identity of the

manufacturer of the product which allegedly caused the injury.”).

Importantly, and relevant here, the exception does not permit dismissal of

nonmanufacturer sellers if the plaintiff can prove:

(1) That the defendant has exercised some significant control over the design

or manufacture of the product, or has provided instructions or warnings to

the manufacturer relative to the alleged defect in the product which caused

the injury, death or damage; or

(2) That the defendant had actual knowledge of the defect in the product which

caused the injury, death or damage; or

(3) That the defendant created the defect in the product which caused the

injury, death or damage.

735 ILCS 5/2–621(c)(1)-(3) (emphasis added).

Here, Plaintiffs argue that Walgreen’s knowledge of J&J talcum powder

products’ defects makes it liable under 735 ILCS 5/2–621(c)(2), which provision bars

dismissal under the seller’s exception if the defendant had actual knowledge of the

defect in the product which caused the injury, death or damage. Indeed, in the

Complaint, Plaintiffs allege that, “[a]s a manufacturer of its own products containing

talc, Walgreen had actual knowledge that the use of the PRODUCTS in the perineal

area could cause ovarian cancer. Compl.,¶ 20. Plaintiffs also allege that “[a]t all

pertinent times… Walgreen [was] assessing and analyzing the safety, efficacy, and

suitability of the PRODUCTS.” Id. at ¶ 42. Finally, Plaintiffs allege that Walgreen

and J&J “[t]ogether at their shared office… coordinate sales, distribution, marketing,

shopper insight, customer loyalty to Walgreen, customer rewards, Walgreen

shoppers’ trending specific to the [J&J talcum powder products], sales, sales goals

and customer service.” Id. at ¶ 21. Accepting these allegations as true, Plaintiffs have

sufficiently alleged a reasonable basis regarding whether Walgreen had the requisite

knowledge of defect, and as such, under a fraudulent joinder analysis, Walgreen

would not be entitled to rely on the seller’s exception at this stage.4

I note that in several prior cases — all nearly identical to this matter on the

facts and involve products liability claims — Illinois district courts have rejected

similar fraudulent joinder arguments in this context made by J&J, and granted

plaintiffs’ motions to remand. See, e.g., Harris, 2017 U.S. Dist. LEXIS 220407, at *9

(finding that the plaintiff sufficiently alleged that Walgreen was more than a mere

pass-through retailer); Frye v. Johnson & Johnson, No. 18-940, 2018 U.S. Dist. LEXIS

67002 (N.D. Ill. Apr. 20, 2018) (same); Harlan v. Johnson & Johnson, No. 15-0418,

2015 U.S. Dist. LEXIS 115340, at *8-9 (S.D. Ill. Aug. 31, 2015)(same); Doles v.

Johnson & Johnson, No. 09-862, 2009 U.S. Dist. LEXIS 96555, at *15-16 (S.D. Ill.

Oct. 19, 2009); Lewis v. Johnson & Johnson, No. 15-0565, 2015 U.S. Dist. LEXIS

115338, at *7-8 (S.D. Ill. Aug. 31, 2015); Cadagin v. Johnson & Johnson, No. 18-1821,

4 Defendant’s certification that Walgreen did not know of talc-powder’s alleged

d e f e c t s d o e s n o t c h a n g e t h is conclusion. A court may pierce the pleadings for indicia

of fraudulent joinder after examining the face of the complaint only “if it does not step

‘from the threshold jurisdictional issue into a decision on the merits.’” In re Briscoe,

448 F.3d at 219 (quoting Boyer, 913 F.2d at 112); see also Batoff, 977 F.2d at 852.

Courts decline to consider defendant’s sworn affidavits in the context of fraudulent

joinder because doing so would inappropriately require courts to make merit-based

factual determinations. See Boomerang Recoveries, LLC v. Guy Carpenter & Co., LLC,

182 F. Supp. 3d 212, 219-221 (E.D. Pa. 2016) (reasoning that it would be improper to

consider defendant’s certifications because they would be excluded from a Rule

12(b)(6) inquiry, which is more searching than fraudulent joinder analysis); see also

Holguin v. Kohl's Dep't Store, Inc., No. 2:15-cv-07016-SDW-LDW, 2016 U.S. Dist.

LEXIS 30356, at *6-7 (D.N.J. Feb. 19, 2016); Alexandre, 2019 U.S. Dist. LEXIS 96830,

at *12-13. Because J&J’s purported evidence, at best, disputes Plaintiffs’ allegations

of knowledge, and because it would be improper for the Court to resolve such a factual

dispute on the merits at this jurisdictional stage, the Court cannot consider J&J’s

certification.

2018 U.S. Dist. LEXIS 177742, at *5-8 (S.D. Ill. Oct. 16, 2018). Having reviewed

them, I am in agreement with those courts’ assessment.

In short, on the face of the Complaint, I cannot find any indicia of fraudulent

joinder for the purpose of destroying diversity. Plaintiffs’ allegations of failure to warn

show an actual intention to proceed against Walgreen. Accordingly, because

Plaintiffs’ failure-to-warn claim against Walgreen is colorable under 735 ILCS 5/2–

621, Walgreen was not fraudulently joined, removal was improper, and the motion to

remand is, therefore, GRANTED.5

CONCLUSION

Because Plaintiffs have at least one colorable claim against Walgreen, i.e.

failure-to-warn under 735 ILCS 5/2–621, removal based on fraudulent joinder was

improper. Plaintiffs’ motions to remand are GRANTED. The above-captioned

matters are remanded to Illinois state courts from which they were removed.

DATED: July 19, 2019 /s/ Freda L. Wolfson

Hon. Freda L. Wolfson

U.S. Chief District Judge

5 I make no comment on whether Plaintiffs have sufficiently stated a failure-to-

w a r n c l a i m a g a i n s t J & J . M y analysis is solely confined to fraudulent joinder.