The opinion
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
JACQUELINE WILLIAMS HOLLEY : CIVIL ACTION
:
v. :
:
TEVA PHARMACEUTICALS USA, INC., :
et al. : NO. 20-1613
MEMORANDUM
Bartle, J. August 4, 2020
Plaintiff Jacqueline Williams Holley has sued
defendants Teva Pharmaceuticals USA, Inc. (“Teva USA”), Teva
Women’s Health, LLC, Duramed Pharmaceuticals, Inc., a division
of Barr Pharmaceuticals, Inc., and Teva Women’s Health, Inc. for
personal injuries in this products liability action as a result
of an allegedly defective intrauterine device. The action was
originally filed in the Court of Common Pleas of Philadelphia
County and removed to this court on the basis of diversity of
citizenship and the requisite amount in controversy. See 28
U.S.C. § 1441(a); 28 U.S.C. § 1332. Before the court is the
motion of the plaintiff to remand the action to the state court.
See 28 U.S.C. § 1447(c).
It is undisputed that the complaint was filed in the
Court of Common Pleas at 11:27 a.m. on March 25, 2020. All
defendants were served at 11:45 a.m. Defendants then filed
their Notice of Removal in this court on March 25, 2020, at
5:14 p.m. and the Notice of Removal in the Court of Common Pleas
at 6:08 p.m.
For this court to have subject matter jurisdiction
under § 1332, there must be complete diversity of citizenship,
that is, the citizenship of no plaintiff and no defendant shall
be the same. Johnson v. SmithKline Beecham Corp., 724 F.3d 337,
346 (3d Cir. 2013). For this purpose, a corporation is deemed a
citizen of both its state of incorporation and the state where
it has its principal place of business. Id. at 347. However,
even where there is complete diversity, an action may not be
removed from the state court where a defendant is a citizen of
the state where the action is filed. 28 U.S.C. § 1441(b)(2).
Thus if a defendant corporation has its principal place of
business in Pennsylvania, the forum state, the action may not be
removed to this federal court sitting in the Eastern District of
Pennsylvania.
It is undisputed that plaintiff is a citizen of Ohio
and that none of the defendants is a citizen of that state.
While complete diversity exists, the parties vigorously argue
over the location of Teva USA’s principal place of business.
Plaintiff contends that it is in Pennsylvania while Teva USA
asserts that it is in New Jersey.1 Plaintiff’s motion to remand
1. Teva USA is incorporated in the state of Delaware.
depends on the resolution of this factual issue since, as noted
above, removal from the Court of Common Pleas to this court is
proper if its principal place of business is in New Jersey but
improper if it is in Pennsylvania.
The burden of proof rests on Teva USA as the party
asserting this court’s subject matter jurisdiction. Kokkonen v.
Guardian Life Ins. Co., 511 U.S. 375, 377 (1994). Diversity of
citizenship of the parties must exist at the time the complaint
was filed and at the time of removal. Johnson, 724 F.3d at 346.
The Supreme Court in Hertz Corp. v. Friend, 559 U.S.
77 (2010), facing circuit conflicts, established the definition
of principal place of business. The Court held that this phrase
“is best read as referring to the place where a corporation’s
officers direct, control, and coordinate the corporation’s
activities.” Hertz Corp., 559 U.S. at 92–93. The Court
described that place, as had the lower courts, as the
corporation’s “nerve center,” which “should normally be the
place where the corporation maintains its headquarters.” Id. at
93. The nerve center is “not simply an office where the
corporation holds it board meetings (for example, attended by
directors and officers who have travelled there for the
occasion).” Id. The Court emphasized that a corporation’s
nerve center is a single place within a state. Id. at 95. In
deciding this issue, courts must be wary of jurisdictional
manipulation. Id. at 96-97. The Supreme Court’s goal is to
provide a simple and straightforward jurisdictional test in the
interest of predictability, judicial economy, and the need to
avoid gamesmanship.
We turn to the facts which the parties have placed in
the record after a period of discovery.
The headquarters and principal place of business of
Teva USA was located in North Wales, Pennsylvania in July 2018
when it publicly announced that it was moving its headquarters
to Parsippany, New Jersey where it had leased 345,000 square
feet of office space. An incentive for the move was the
commitment of the State of New Jersey to a $40 million tax
incentive plan. In addition to Teva USA, the Governor of New
Jersey, Philip Murphy, also announced the move in July 2018.
The actual move took place as of January 1, 2020. Since that
date, the North Wales facility has been used as a distribution
center.
The two top officers of Teva USA are Brendon O’Grady,
who is the President and CEO, and Asaph Naamon, who is the
Senior Vice-President and Chief Financial Officer. They are
involved in making “corporate activity direction, control, and
coordination decisions.” Although Mr. O’Grady lives in Florida,
both he and Mr. Naamon have their offices in Parsippany,
New Jersey. Since January 1, 2020, subject to the later closure
of the office due to the coronavirus pandemic, they have made
corporate decisions there, and Mr. O’Grady has conducted “Town
Hall Meetings” for Teva USA employees from that location.
Other high-level officers, such as Deborah Griffin,
Deb Peterson, Dough McCormack, and Joerg Tillman, whose roles
and responsibilities “are limited and specialized” and focus on
“specific segments of Teva USA’s business” also have offices in
Parsippany, New Jersey, although Ms. Griffin, a Senior Vice
President and Chief Accounting Officer, also has an office in
North Wales, Pennsylvania. The Corporate Secretary, Brian
Shanahan, has his office in West Chester, Pennsylvania.
Teva USA’s Board of Directors consists of three
members. Mr. O’Grady serves as Chair while Mr. Naamon and Ms.
Griffin make up the remainder of the Board. As noted above, all
three have offices in Parsippany.
The evidence clearly establishes that the headquarters
of Teva USA has been in Parsippany, New Jersey since January 1,
2020 and was at that location when this case was filed and then
removed to this court in March. While this large corporation
not surprisingly has officers who live and have offices at
various other sites, Parsippany, New Jersey is the place where
“high level officers direct, control, and coordinate the
corporation’s activities.” Hertz Corp., 559 U.S. at 80. It is
the nerve center of Teva USA. There is no evidence of corporate
manipulation to create diversity of citizenship.
Accordingly, Teva is not a citizen of Pennsylvania.
This court has subject matter jurisdiction under § 1332(a), and
the motion of plaintiff to remand this action to the Court of
Common Pleas of Philadelphia County will be denied.