Petition for Writ of Certiorari — Ritchey v. Upjohn Drug Co.

~ Soprems Court, 0°8. :

iy ) FILED

98 336 aus 25 Wwe

In The

Supreme Court of the United States

October Term, 1997

*

JOE B. RITCHEY,

Petitioner,

UPJOHN COMPANY and WILLIAM DEMENT,

Respondents.

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On Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Ninth Circuit

¢

PETITION FOR WRIT OF CERTIORARI

+

MicHaAet D. MosHER

Rosert S. Catz

Counsel of Record

50 North Main Street

Paris, Texas 75460-4250

(903) 785-4721

Counsel for Petitioner

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTIONS PRESENTED FOR REVIEW

1. Does the one year limitation on diversity removal

under the 1988 amendments to 28 U.S.C. § 1446(b) abso-

lutely preclude removal in all diversity cases after the

limitation period expires, and if not, does the one year

limitation period on removal only begin to run from the

date when the action stated by the initial pleading setting

forth the claim for relief filed in state court was served on

the diverse state court defendant, who then filed notice of

removal more than two years beyond the filing of the

original action in state court?

2. Does removal of a case by a diverse defendant

under 28 U.S.C. § 1446(b) on grounds of fraudulent join-

der based on the bald and frivolous claim that plaintiff

could not possibly prevail in state court under state law

against non-diverse defendants, unconstitutionally vest

the judicial power in the United States courts beyond

Article III, Section 2 of the United States Constitution

when any alleged pleading deficiences could have been

readily cured by amendment to the original state court

complaint which had not even once yet been amended in

state court?

3. Is a diversity case removable under 28 U.S.C.

§ 1446(b) on grounds of alleged fraudulent joinder of

nondiverse parties where the district court found, in the

absence of any discovery and in the face of comprehen-

sive and detailed countervailing declaration, that the pro

se plaintiff could not possibly prevail against a statute of

limitations and res judicata defense for state law common

law fraudulent concealment, deceit and conspiracy by a

ii

QUESTIONS PRESENTED FOR REVIEW - Continued

pharmaceutical manufacturer and its so-called indepen-

dent FDA advisors who allegedly, for payments from

Upjohn of more than $2,000,000 per year, concealed

research from and misled the Food and Drug Administra-

tion to prevent the timely discovery of the cause of injury

and causes of action by the petitioner — even though the

offered new and independent State resident actions tolled

the statutes of limitations under California law and the

state law conspiracy was only discovered by the plaintiff

less than 6 months before the filing of this action in state

court.

EO” Um”

iil

THE PARTIES TO THE PROCEEDINGS

Petitioner is Joe B. Ritchey, a pro s¢ plaintiff in the

United States District Court for the Northern District of

California, and a pro se appellant in the United States

Court of Appeals for the Ninth Circuit. Defendants and

Respondents are The Upjohn Drug Company (“Upjohn”),

Dr. William Dement (“Dement”) a California state resi-

dent and another state resident served as John Doe defen-

dant, the Sleep Disorders Clinic.

iv

TABLE OF CONTENTS

Ce I a ge 1 |

Re es a a eee 1 .

CONSTITUTIONAL AND STATUTORY PROVI-

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ES tie EO oe i a 6

ee ee ee oe a

perameeueteens th Treereet Court. 6s. 65 iso eve ce tees 9

REASONS FOR GRANTING CERTIORARI ......... 9

1. The Court Should Grant Review In This Case To

Resolve The Uncertainty Regarding The Inter-

pretation Of The One-Year Limitation On Diver-

sity Removal Under The 1988 Amendments to 28

188 2ee es Bere epee rer ery eee erp 9

2. Review By This Court Is Necessary To Decide An

Important Question Of Federal Jurisdiction Given

The Circuits And District Courts’ Lack Of A Clear

And Unambiguous Position Regarding The

Nature And Extent Of the Power Of The Federal

Courts Under Article III, Section 2 Of The Consti-

tution And The 1988 Amendments to 28 U.S.C.

§ 1446(b) To Examine The Merits Of Claims Aris-

ing Solely Under State Law Brought In State .

Court Against Non-Diverse State Court Defen-

GUN Gao heh os wks 5 a aa ea eekana es (ueoee eS Ue nae eee 13

Pe ee ee ee, ee Te Ne ee eo oe

— — ait smmanapiees —-"

Vv

TABLE OF AUTHORITIES

Page

(PRO FORMA)

CASES

AIDS Counseling and Testing Centers v. Group W

Television, Inc., 903 F.2d 1000 (10th Cir. 1990)....-- 18

Allied Equipment Corp. v. Litton Saudi Arabia Corp.,

7 Cal. 4th 503 (1994) .......2ccceeercceserscecrers 13

Angel v. Bullington, 330 U.S. 183 (1947).....--+---+e: 15

B., Inc. v. Miller Brewing Co., 663 F.2d 545 (5th Cir.

NT oc iis wn nn whe 8 te en On Senet at 17

Batoff v. State Farm Insurance Company, 977 F.2d 848

(3d Cit, 1992) ..--. een ees esecesccenecnes LUTE TTS 17

Beisel v. Aid Ass’n for Lutherans, 843 F. Supp. 616

(OD Cal. TING o.oo oe sere Cones st aaren nesses sane 10

Boyer v. Snap-on Tools Corp., 913 F.2d 108 (3rd Cir.

ee BY COOL DEES POPE LAER DSL AG haete a a7, 25

Bristol-Meyers Squibb Co. v. Superior Court (1995),

rv ok Oh, MPR aS Pie eB ble tice tts 20

Carlin v. Superior Court of Sutter County, 13 Cal. 4th

1104, 920 P.2d 1347 (1996), 56 Cal. Rptr. 2d 162.....; 20

Caterpillar, Inc. v. Lewis, 519 U.S. 61, 117 S.Ct. 467

ee OEE Rr Ee Ee ratte al thin 5, 11, 12

Chesapeake & O. R. Co. 2. Cockrell, 232 U.S. 146

AMERY i ean cans gb hss Fash ena asa oR ESE ENS eet eS 16, 21

Chicago, R. I. & P. R. Co. ¥. Dowell, 229 U.S. 102

ROWED oboe idannt ative sa radeon ss Mensa reer erent © 16

Dodson v. Spiliada Maritime Corp., 951 F.2d 40 (5th

pay 8 ee REL TOT REDRESS Lett leita i ad sleet 17

vi

TABLE OF AUTHORITIES —- Continued

Page

Green Point Sav. Bank v. Cortez, 104 F.3d 351

(Table), 1996 WL 549729 (2nd Cir. 1996)........... 12

Green Point Savings Bank v. Hidalgo, 910 F. Supp. 89

LEAD PO re REP ETA A GLC sé Wek bus O44 Rag Ktan es nema eeS 12

Hackethall v. National Casualty Company, 189 Cal.

ADD. Se RE AESOP kas AGC be eed Re sd hewebhes ead 13

Hom. v. Service Merchandise Co., Inc., 727 F. Supp.

SOOO El She. ROME s 8b aos oa 4s Oa Se LARS A 11

Illinois Cent. R. Co. of State of Illinois v. Sheegog, 215

aN CE. AUPE Feed as Ana D ERK hn ton daeus chee Rowe 16

In re Uniroyal Goodrich Tire Co., 104 F.3d 322 (11th

i ORE c.g PRESTR AR caphee, Seals cane yt eran Hra ta emer ae paperep nay 11

Kinabrew v. Emco-Wheaton, Inc., 936 F. Supp. 351

(Neb he RE RE Paar grr a een ate Pee a eure See 10

Lobato v. Pay Less Drug Store, Inc., 261 F.2d 406

CRT GRR As bh a baa cave bene ee eae eN Oh sees be 18

Lucas v County of Los Angeles, 47 C.A. 4th 277 (July

BOD 5.6 a estos is baa ad Aye ea ak eta ees 3 21

Molko v. Holy Spirit Association, 46 Cal. 3d 1092

CR WRES TN iS aes RONG EE HTD OAKES Pe BCE Deke Abeer bee 14

Neitzke v. Williams, 490 U.S. 319 (1989) .............. 17

Newman v. Brent, 1998 Dist. Lexis 10476 (D.D.C.

PUR Bh, TO iin 60s 5 08/9 BAAN RS a ECON Se aOR we ¥h

New York Life Ins. Co. v. Deshotel, 142 F.3d 873 (5th

Shs SEMOE eh Coho nS CHL e CEN SHE RELEA CEO EAE VAC EET AES 10

Norgart v. Upjohn Co., 64 Cal. App. 4th 192 (1998),

Fe RRs MY OR OT ond Ck cvs uneres aunedasweekeaa 20

Vii

TABLE OF AUTHORITIES - Continued

O’Brien v. Powerforce, Inc., 939 F. Supp. 774 (D.

eis SIE 2 Cah sah epee es ae Pam sense Os

Pampillonia v. RJR Nabisco, Inc., 138 F.3d 459 (2d

ek NN esac ci ii he ss owey red ene ssn ee tes

Perez v. General Packer, Inc., 790 F. Supp. 1464 (C.D.

‘ag Fe , , 5 DCE PIE EE ER Oe ROO tah, ciate

Powers v. Chesapeake & O. Ry. Co., 169 U.S. 92

FR onc uacdv es es ee ee swan ys Suess sets a ces

Pullman Co. v. Jenkins, 305 U.S. 534 (1939)......+.-;

Rashid v. Scenck Construction Co., 843 F. Supp. 1081

(IGE). W.Va. 1993). 0-525 es ce csesne ees enceteeese

Rezendes v. Dow Corning Corp., 717 F. Supp. 1435

TED, Cal. 1909)... <5 2+ seen sniteensanenss srs

Ritchey v. Upjohn Drug Co., 139 F.3d 1313 (9th Cir.

| er eee en Rees, 1, 4, 13, 19,

Ritchey v. Upjohn Drug Co., No. 94-15171 (9th Cir.

1995) (unpublished disposition) ....---+-+++--+:

Singh v. Daimler-Benz AG, 9 F.3d 303 (3d Cir. 1993) ..-.

Smoot v. Chicago, Rock Island & Pac. R.R. Co., 378

F.2d 879 (10th Cir. 1967)....----+-seerererrtees

Stevens v. Superior Court, 180 Cal. App. 3d 605

CSUIMA cia has advag= Chem ae es ee ssomenbet es shtas

REDE is ink Sin pea eRe ot Chea a te Sern

Wyatt v. Union Mortgage Co., 24 Cal. 3d 773 (1979) ..--

Page

Vili

TABLE OF AUTHORITIES - Continued

Page

CONSTITUTIONAL PROVISIONS

United States Constitution, Article II], Section 2...... 1

STATUTES

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Be Was Se RRs Dak aes Kae ke cis Oeek es eee 18

California Civil Code § 430.10(f).................... 19

RULES

Rea: R. Civ. Proc. 12006)... . 6... eee a Av; BOs aes Oe

Pants, Be Pre. Des os oss ee Ss AAS 18

MIscELLANEOUS

Archibald, Reintroducing “Fraud” to the Doctrine of

Fraudulent Joinder, 78 Va. L. Rev. 1377 (1992)...... 14

Catz & Guyer, Federal In Forma Pauperis Litigation:

In Search of Judicial Standards, 31 Rutgers L. Rev.

GOD RUPE ie feeb io eek ese eh CANS Cea eee aweb ta 18

Eee rrr

ix

TABLE OF AUTHORITIES - Continued

Page

ision of Section 1446 in

Commentary on 1988 Rev

Annotated (West, 1997) ..-- 11

the United States Code

H.R. Rep. No. 889, 100th Cong., 2d Sess., at 71-73

(1988) reprinted in 1988 U.S.C.C.A.N 5982,

PPS RES REE IEE Tey tae cin ral roe tian 11

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OPINIONS BELOW

The District Court entered its Order Granting Defen-

dants’ Motions to Dismiss and its Order Denying Plain-

tiff’s Motion to Remand on September 9, 1996. (App. 25).

The opinion of the Ninth Circuit affirming these orders is

reported as Ritchey v. Upjohn Drug Co., 139 F.3d 1313 (9th

Cir. 1998) (App. 1).

JURISDICTION

The final judgment of the Court of Appeals for the

Ninth Circuit was entered on April 3, 1998. On May 27,

1998, that court denied Petitioner’s timely petition for

rehearing with suggestion for rehearing en banc. (App.

36). The jurisdiction of this Court is invoked under 28

U.S.C. § 1254(1). This timely petition was filed within 90

days of the denial of rehearing with suggestion for

rehearing en banc.

®

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

1. United States Constitution, Article III, Section 2 pro-

vides in relevant part:

The judicial power shall extend to. . . . Controversies

between Citizens of Different States

2. 28 U.S.C. § 1332

(a) The district courts shall have original jurisdic-

tion of all civil actions where the matter in controversy

exceeds the sum or value of $75,000, exclusive of interest

and costs, and is between citizens of different States.

3. 28 U.S.C. § 1441

(a) Except as otherwise expressly provided by Act

of Congress, any civil action brought in a State court of

which the district courts of the United States have origi-

nal jurisdiction, may be removed by the defendant or the

defendants, to the district court of the United States for

the district and division embracing the place where such

action is pending. For purposes of removal under this

chapter, the citizenship of defendants sued under ficti-

tious names shall be disregarded.

4. 28 U.S.C. § 1446

(a) A defendant or defendants desiring to remove

any civil action or criminal prosecution from a State court

shall file in the district court of the United States for the

district and division within which such action is pending

a notice of removal signed pursuant to Rule 11 of the

Federal Rules of Civil Procedure and containing a short

and plain statement of the grounds for removal, together

with a copy of all process, pleadings, and orders served

upon such defendant or defendants in such action.

(b) The notice of removal of a civil action or pro-

ceeding shall be filed within thirty 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, or within

thirty days after the service of summons upon the defen-

dant if such initial pleading has then been filed in court

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and is not required to be served on the defendant, which-

ever period is shorter.

If the case stated by the initial pleading is not remov-

able, a notice of removal may be filed within thirty days

after receipt by the defendant, through service or other-

wise, of a copy of an amended pleading, motion, order or

other paper from which it may first be ascertained that

the case is one which is or has become removable, except

that a case may not be removed on the basis of jurisdic-

tion conferred by section 1332 of this title more than 1

year after commencement of the action.

5. 28 U.S.C. § 1447

A motion to remand the case on the basis of any

defect other than subject matter jurisdiction must be

made within 30 days after the filing of the notice of

removal under section 1446(a). If at any time before final

judgment it appears that the district court lacks subject

matter jurisdiction, the case shall be remanded. An order

remanding the case may require payment of just costs

and any actual expenses, including attorney fees,

incurred as a result of the removal. A certified copy of the

order of remand shall be mailed by the clerk to the clerk

of the State court. The State court may thereupon proceed

with such case.

STATEMENT

Procedural History

On January 3, 1994 petitioner Joe B. Ritchey brought

this pro se action against the Upjohn Company, Dr. Wil-

liam Dement, Sleep Disorders Center and other Doe

defendants in the California Superior Court for Santa

Cruz County. Process was served on Upjohn by their

agents, co-conspirators and co-defendants on Wednesday,

December 27, 1995. On Monday, January 29, 1996, more

than two years after the action was filed in state court

and more than 33 days after receipt by agents of Upjohn

of the copy of the initial pleading setting forth the claim

for relief under 28 U.S.C. § 1446(b)(1), Upjohn, a non-

California corporation, removed the case to the United

States District Court for the Northern District of Califor-

nia although the other co-defendants were California res-

idents.! Upjohn claimed there was complete diversity of

1 The statute provides that “notice of removal shall be filed

within thirty days.” (Emphasis added). Curiously, the court of

appeals held that petitioner “waived that issue when he failed

to raise it within 30 days after removal” in the district court, and

“did not raise the issue before us until his reply brief.” 139 F.3d

1313, 1315 fn.3 (9th Cir. 1998). Upjohn’s inexplicable failure to

file a timely notice of removal within 30 days is jurisdictional,

cannot be waived by the parties, and can be raised by a party at

any time including a reply brief on appeal and in this petition

for writ of certiorari. Petitioner now asserts before this Court

that the order of the district court granting removal and

awarding summary judgment to the respondents is void for

want of subject matter jurisdiction. Accordingly, this Court

should grant certiorari and vacate the district court’s final

judgment on the merits with directions that Upjohn’s untimely

notice of removal be dismissed for want of subject matter

dacs sen

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citizenship, asserting that Dement, Sleep Disorders Cen-

ter and the other state Doe defendants were sham defen-

dants because they could rely upon the state law defenses

of the statute of limitations and res judicata.

Pro se plaintiff moved to remand, pointing out that

the California defendants destroyed complete diversity,

and that Upjohn’s notice of removal came more than two

years after the action was filed in state court for acts of

fraud and conspiracy that were not discovered by peti-

tioner until six months before this state court action was

filed on January 3, 1994. The district court denied the

motion to remand, and granted the Fed. R. 12(b)(6)

motions as to all the defendants on grounds of the state

statute of limitations and res judicata. On May 3, 1996 at a

hearing on defendants’ motion to dismiss and plaintiff’s

motion to remand the following insiructive remarks were

made in open court by the district judge.

The Court:

Basically, I think this case presents one issue

that’s difficult, and that is what the last clause in

1446(b) means, and obviously there are cases

going both ways with the majority of the cases

in favor of Mr. Ritchey’s position. However, I

jurisdiction, with the case remanded back to the Superior Court

in and for the County of Santa Cruz, California. Caterpillar, Inc.

v. Lewis, 519 U.S. 61, 117 S.Ct. 467, 472 (1996). (Failure by state

court plaintiff to file motion to remand within 30 days is

mandatory, but defects that go to subject matter jurisdiction can

be raised at any time). Upjohn’s notice of removal which shall be

filed in thirty days is untimely and any subsequent action taken

by the district court other than an order of remand is void for

want of subject matter jurisdiction.

must say that I find the reasoning of the Zogbi

case, and I recognize that there’s even a case in

that district later than Zogbi that goes the other

way, more persuasive because it seems to me

that reading it the way that a number of cases

have done, including a couple from this district,

really is just nonsensical. Frankly, and I might as

well be totally up front with you Mr. Ritchey, I

just, while this case goes forward in state court, I

just don’t think there's a chance that it’s going to go

forward here. The statute of limitations was deter-

mined against you and went up on appeal and you

lost. (Emphasis added). (App. 65)

The Ninth Circuit affirmed, ruling that the one-year

time period within which removal must be effected under

§ 1446(b) did not apply, and mistakenly concluded with

no support in the district court record that the California

defendants were fraudulently joined because the limita-

tions period had run before Petitioner filed his complaint.

Thus, according to the Ninth Circuit, diversity was com-

plete simply by claiming without more that the California

defendants, like Upjohn, could assert that under Califor-

nia law no cause of action was stated against them.

Neither the District Court nor the Ninth Circuit would

consider Petitioner’s opposing declarations, detailed

offered evidence in opposition and amendments that

would have cured any pleading defects.

Statement of Facts

In 1983 and thereafter, Petitioner was taking a now

banned dosage of Halcion, a drug manufactured by

Upjohn, which caused him to suffer a number of side

effects. The side effects caused numerous serious dam-

ages, including Petitioner’s conviction on criminal

offenses which in 1991 State Bar Proceedings, the Califor-

nia Supreme Court unanimously agreed had been solely

caused by Upjohn’s product. In the First Cause of Action

in his Complaint in this matter, Petitioner alleged that

Upjohn, Dement, various of its employees,

agents and directors and “independent

researchers and clinicians” . . . joined . . . to

defraud and deceive the Food and Drug Admin-

istration and the consuming public, by submit-

ting incomplete, misleading, and false data in

violation of the Federal Food, Drug and Cos-

metic Act.” App. 37.

In his Second Cause of Action, Petitioner further

alleged:

Defendants, the Upjohn Company, William

Dement and Does 1 through 10, composing

employees, agents, consultants, investigators,

and attorneys, commenced a conspiracy and

concert of action wherein each said party acted

as a conspirator and/or co-conspirator within

the course and scope of said conspiracy. App.

48.

The Second Cause of Action also alleged the object of

the conspiracy was to “misrepresent the true nature, dan-

gers, hazards, and risks associated with the drug Hal-

cion. ... ” and that defendants acted “in concert” in

furtherance of the conspiracy “to hinder the submission

of full, complete and unbiased information to the FDA, to

misreport protocol results, to select biased and favorable

investigators, to suppress the dissemination of informa-

tion reasonably disclosing the risks, hazards, and conse-

quences of the usage of Halcion. .. . ” App. 48.

The Complaint also alleges as to both Causes of

Action that Defendants “have striven to conceal their

civil and criminal liability and illegal acts under various

federal statutes and promulgated regulations and Plain-

tiff has just discovered a portion of them within the last 18

months ... ” (App. 39).

In March of 1990, Petitioner had previously sued

Upjohn alone, alleging in California State Judicial Council

form complaint that Upjohn’s product Halcion was defec-

tive, and that he had taken it with resulting injuries

(Ritchey I). In October of 1993, the United States District

Court granted summary judgment against Petitioner in

that case, on the sole ground that California’s one-year

statute of limitations for personal injury actions had run

before he sued. The dismissal was affirmed by the Ninth

Circuit on June 6, 1995. See Ritchey v. Upjohn Drug Co.,

No. 94-15171 (9th Cir. 1995) (unpublished disposition).

(App. 53).

In Ritchey I, the Ninth Circuit held that Petitioner’s

suit for personal injuries was barred by California’s one-

year statute of limitations, because he had ” ‘notice or

information of circumstances to put a reasonable person

on inquiry’ over one year before filing” that action; i.e., as

early as August of 1988 and no later than March of 1989.

(App. 55). However, neither Dement, Sleep Disorder Cen-

ter nor other subsequently discovered defendants named

in this case filed on January 3, 1994 in the California

superior court were known to the plaintiff nor named in

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Ritchey I, nor had there been any ruling on Petitioner’s

newly pled facts which would under state law toll the

statute of limitations, that those newly discovered defen-

dants had engaged in a conspiracy with Upjohn to con-

ceal the truth about Halcion in order to defraud

Petitioner, the public and the FDA. See Omnibus Declara-

tion and offered facts of Joe Ritchey in Support of Petition

for Remand. (App. 68 & 74).

Jurisdiction in District Court

If the district court had jurisdiction, it was pursuant

to 28 U.S.C. § 1332(a) on the theory that this was a

diversity action, which was removed pursuant to 28

U.S.C. § 1441(a). However, it was and is Petitioner’s

position that because the other served defendants were

newly discovered and identified California domiciliaries,

complete diversity is defeated and the federal court lacks

subject matter jurisdiction.

This petition for writ of certiorari squarely presents

core and fundamental questions regarding subject matter

jurisdiction and the scope of diversity removal.

+

REASONS FOR GRANTING CERTIORARI

1. The Court Should Grant Review In This Case To

Resolve The Uncertainty Regarding The Interpreta-

tion Of The One-Year Limitation On Diversity

Removal Under The 1988 Amendments to 28 U.S.C.

§ 1446(b)

Petitioner’s motion to remand was based in part on

28 U.S.C. § 1446(b), which provides:

10

If the case stated by the initial pleading is |

not removable, a notice of removal may be filed

within thirty days after receipt by the defen-

dant, through service or otherwise, of a copy of

an amended pleading, motion, order or other

paper from which it may first be ascertained

that the case is one which is or has become

removable, except that a case may not be

removed on the basis of jurisdiction conferred

by section 1332 of this title more than 1 year

after commencement of the action.

It was, and is, Petitioner’s view that the Section 1332

diversity removal of this action was absolutely precluded

by § 1446(b), because the action had been pending in state

court for more than one year at the time the removal

notice was filed. However, the Ninth Circuit ruled that

the one-year time limit applies only “to the antecedent

clause to which it is attached, and not to other para-

graphs or sentences in the statute.” (App. 7). And because

the action was removable, if at all, at the time it was

originally filed, the circuit court held that the one-year

time limit did not apply. Id.

This approach is similar to that adopted by the Fifth

Circuit in New York Life Ins. Co. v. Deshotel, 142 F.3d 873

(5th Cir. 1998). However, as the Ninth Circuit acknowl-

edged, a number of district courts have disagreed with

this view, holding that the last clause of § 1446(b) must be

construed strictly to mean exactly what it says. See Kina-

brew v. Emco-Wheaton, Inc., 936 F. Supp. 351, 353 (M.D. La.

1996); O’Brien v. Powerforce, Inc., 939 F. Supp. 774, 778 &

nn.1 & 2 (D. Haw. 1996); Beisel v. Aid Ass'n for Lutherans,

843 F. Supp. 616, 618-19 (C.D. Cal. 1994); Rashid v. Scenck

Construction Co., 843 F. Supp. 1081, 1086-87 n.6 (S.D. W.

ial ial

11

Va. 1993); Perez v. General Packer, Inc., 790 F. Supp. 1464,

1468 (C.D. Cal. 1992); Hom. v. Service Merchandise Co., Inc.,

727 F. Supp. 1343, 1345 (N.D. Cal. 1990); Rezendes v. Dow

Corning Corp., 717 F. Supp. 1435, 1437-38 (E.D. Cal. 1989);

the latest case to so hold offers an extensive review of the

history and purpose of 1446(b) amendments in Newman v.

Brent, 1998 Dist. Lexis 10476 (D.D.C. July 8, 1998). And of

course this Court noted last term that “no case, however,

may be removed from state to federal court based on

diversity of citizenship ‘more than 1 year after com-

mencement of the action.’ ” Caterpillar, Inc. v. Lewis, 117

S.Ct. 467, 473 (1996). Petitioner construes the Court’s

meaning of that statement in Caterpillar that no case

means no case.

The Ninth Circuit viewed a portion of the 1988

amendment to § 1446(b) as supporting its conclusion,

noting that the House Report on the proposed amend-

ment expressed the thought that what Congress was

attempting to do by enacting the 1 year limitation to

diversity removal was preclude removal “late in the pro-

ceedings” at a time when it is likely that “substantial

progress has been made in state court.” H.R. Rep. No.

889, 100th Cong., 2d Sess., at 71-73 (1988) reprinted in

1988 U.S.C.C.A.N. 5982, 6031-34. As the circuit court

acknowledged, this is hardly a ringing endorsement of its

views. App. 8.

Numerous other cases have assumed without decid-

ing that the one-year limitation on removal is absolute.

See Caterpiller, Inc. v. Lewis, 519 U.S. 61, 117 S.Ct. 467, 473

(1996); Singh v. Daimler-Benz AG, 9 F.3d 303, 309 (3d Cir.

1993); In re Uniroyal Goodrich Tire Co., 104 F.3d 322, 323

(11th Cir. 1997). The Commentary on 1988 Revision of

12

Section 1446 in the United States Code Annotated (West,

1997) makes the same assumption and specifically states

it was intended to apply to all diversity removal based

upon claims of fraudulent joinder. See Anno. at pp.

316-318. Moreover, at least one district court has held that

the one-year limitation of § 1446(b) is jurisdictional. See

Green Point Savings Bank v. Hidalgo, 910 F. Supp. 89

(E.D.N.Y. 1995) (granting motion to remand).

Certiorari should be granted to resolve the uncer-

tainty surrounding the proper construction of § 1446(b),

and to determine whether its one-year diversity removal

limitation is jurisdictional. Both circuits to reach the issue

have ruled in favor of expansive federal jurisdiction,

which is inconsistent with the limited nature of federal

diversity jurisdiction and Article III, Section 2 of the

Constitution. Caterpillar, 117 S.Ct. at 472-73.2 It is partic-

ularly important to have a definitive statement from this

Court on this issue, because the inconsistent results in the

resolution of removal petitions leads to uncertainty and

unfairness. This particularly important as those cases in

which motions to remand have been granted, § 1447(d)

precludes direct appeal of the remand order. See, e.g.,

Green Point Sav. Bank v. Cortez, 104 F.3d 351 (Table), 1996

WL 549729 (2nd Cir. 1996). As a result, circuit court cases

do not adequately reflect the true range of factual

2 The Judicial Conference of the United States, in it’s 1995

“Long Range Plan for the Federal Courts”, called for diversity

jurisdiction to be severely restricted, noting that diversity

jurisdiction then accounted for “about one of every two civil

trials” and “a massive diversion of federal judge power away

from their principal function” (p. 31)

13

situations and judicial analysis of this issue, and district

judges are left without a definitive statement on the con-

struction of § 1446(b).

2. Review By This Court Is Necessary To Decide An

Important Question Of Federal Jurisdiction Given

The Circuits And District Courts’ Lack Of A Clear

And Unambiguous Position Regarding The Nature

And Extent Of the Power Of The Federal Courts

Under Article III, Section 2 Of The Constitution

And The 1988 Amendments to 28 U.S.C. § 1446(b) To

Examine The Merits Of Claims Arising Solely

Under State Law Brought In State Court Against

Non-Diverse State Court Defendants.

The circuit court in this case determined that the non-

diverse defendants were fraudulently joined because as

to them, “the statute of limitations had long since run,

regardless of whether Ritchey’s new cause of action is

characterized as a personal injury cause of action or a

fraud cause of action.” 139 F.3d at 1320. This curious

result was done without regard to California substantive

law on state conspiracies that toll the statute of limita-

tions which is binding on a federal court sitting in diver-

sity. See, Allied Equipment Corp. v. Litton Saudi Arabia

Corp., 7 Cal. 4th 503, 510 (1994) (discusses elements of

civil conspiracy); Hackethall v. National Casualty Company,

189 Cal. App. 3d 1102, 1111 (1987) (elements of deceit and

fraud); Wyatt v. Union Mortgage Co., 24 Cal. 3d 773 (1979)

and Stevens v. Superior Court, 180 Cal. App. 3d 605 (1986)

(elements of fraudulent and intentional concealment with

facts strikingly similar to the facts alleged in petitioner’s

14

complaint. Molko v. Holy Spirit Association, 46 Cal. 3d 1092

(1988) (independent claim of conspiracy serves as com-

plete bar to statute of limitations defense). See compre-

hensive countervailing Declarations of Joe Ritchey in

Support of Petition for Remand. (App. 68 & 74.)

In order to reach this result, the circuit court did two

things which are inconsistent with the jurisprudence of

this Court, and upon which there is disagreement among

the circuit courts in determining an issue of fraudulent

joinder. See, Archibald, Reintroducing “Fraud” to the Doc-

trine of Fraudulent Joinder, 78 Va. L. Rev. 1377, 1392-1396

(1992).

First, instead of considering whether the Plaintiff

had, in good faith, sought to impose joint liability upon

all the defendants in his complaint, the circuit court

instead looked outside the pleadings in favor of the

defendants only, and purported to determine that no

cause of action was well pled in the state court complaint

against either the non-diverse defendants or the diverse

defendant. Second, instead of placing a heavy burden of

persuasion on the removing defendant to establish fraud-

ulent joinder, the circuit court instead applied a stringent

analysis of the complaint and the surrounding facts, nar-

rowly construing the causes of action arising under Cali-

fornia law, which were asserted or which could have been

more specifically asserted against the non-diverse defen-

dants by Petitioner’s offered amendment of the complaint

and as factually specifically detailed in Petitioners

responsive pleadings to the claims of fraudulent joinder.

15

By refusing to consider Petitioner’s offered Amend-

ments to the complaint that would have been allowed as

a matter of right in State Court under California’s liberal

amendment and pleading rules, the Federal Court

granted Upjohn and the California defendants procedural

privileges they would not have received in state court. At

the hearing on Petitioner’s motion to remand, the district

court judge recognized this anomaly, admitting that had

the case been returned to state court it would have gone

forward. (See remarks of the district judge at the May 3,

1996 remand hearing at supra pages 5-6) Thus, the

approach taken by the circuit court in this case improp-

erly rewards forum shopping defendants who remove in

order to present their defenses in a more favorable fed-

eral forum. See Angel v. Bullington, 330 U.S. 183, 192

(1947).$

As early as Powers v. Chesapeake & O. Ry. Co., 169 U.S.

92 (1898), this Court acknowledged that fraudulently

joining a domiciliary of the forum state as a party defen-

dant would not defeat diversity jurisdiction. And in

Wilson v. Republic Iron & Steel Co., 257 U.S. 92 (1921), this

Court affirmed the assertion of jurisdiction upon removal

of a case from Alabama state court, holding that diversity

existed because the “joinder [of an Alabama citizen] was

a sham and fraudulent - that is, without any reasonable

basis in fact and without any purpose to prosecute the

3 “A federal court in North Carolina, when invoked on

grounds of diversity of citizenship, cannot give that which

North Carolina has withheld. Availability of diversity

jurisdiction which was put into the constitution so as to prevent

discrimination against outsiders is not to affect discrimination

against the great body of local citizens.” (330 U.S. at 192)

16

cause in good faith against [the Alabama citizen].” Id. at

98.

In subsequent cases, this Court has affirmed that the

purpose for the doctrine of fraudulent joinder was to

prevent plaintiffs from defeating federal diversity juris-

diction by joining resident defendants whom the plaintiff

did not intend to pursue, and against whom joint liability

could not be established. See Pullman Co. v. Jenkins, 305

U.S. 534, 541 (1939) (diverse defendant may show that the

non-diverse defendant has not been joined in good faith,

and thus should nct be considered in determining the

right to remove); Chicago, R. I. & P. R. Co. v. Dowell, 229

U.S. 102, 113 (1913) (where plaintiff had a cause of action

which was joint, and had elected to sue both tort feasors

in one action, his motive in doing so is of no importance);

Illinois Cent. R. Co. of State of Illinois v. Sheegog, 215 U.S.

308, 316 (1909) (joinder cannot be fraudulent where the

legal effect of the complaint was to allege joint liability as

against both diverse and non-diverse defendants); Chesa-

peake & O. R. Co. v. Cockrell, 232 U.S. 146 (1914) (fraudu-

lent joinder was not established by a petition which

attacked the merits of the complaint). In Cockrell, the

Court held that diversity could not be established by a

petition which “manifestly went to the merits of the

action as an entirety, and not to the joinder; that is to say,

it indicated that the plaintiff's case was ill founded as to

all the defendants.” Id. at 153.

Despite the guidance of this long-settled body of law,

some circuit courts, such as the Ninth Circuit in the

instant case, have engrafted a summary judgment-like

procedure upon the determination of motions to remand

where the diverse defendant claims fraudulent joinder.

17

See Dodson v. Spiliada Maritime Corp., 951 F.2d 40, 42 (Sth

Cir. 1992); B., Inc. v. Miller Brewing Co., 663 F.2d 545, 549

(5th Cir. 1981). This approach frequently leads federal

circuit courts beyond the existence vel non of fraudulent

joinder into the underlying merits of the case, as occurred

here. Moreover, the other circuit courts which have

addressed this issue have applied differing principles and

have come to inconsistent results.

The Third Circuit rejects the view of fraudulent join-

der found in Fifth and Ninth Circuit cases, instead hold-

ing that “summary judgment type inquiry made by the

district court” is wrong in a fraudulent joinder analysis.

Boyer v. Snap-on Tools Corp., 913 F.2d 108, 112 (3rd Cir.

1990), cert. denied, 498 U.S. 1085 (1991). In contrast to the

approach taken by the Fifth and Ninth Circuits, the Third

Circuit held that even if some piercing of the pleadings is

appropriate to decide whether “plaintiffs have asserted a

‘colorable’ ground supporting the claim against the

joined defendant, that inquiry is far different from a

summary judgment type inquiry.” Id.

The Third Circuit further explained its view of the

limited extent of a district court’s review of the merits on

a remand petition in Batoff v. State Farm Insurance Com-

pany, 977 F.2d 848 (3d Cir. 1992). There, the court held

that “the inquiry into the validity of a complaint trig-

gered by a motion to dismiss under Rule 12(b)(6) is more

searching than that permissible when a party makes a

claim of fraudulent joinder.” Therefore, said the court, a

party cannot be fraudulently joined, even if “the claim

against that party ultimately is dismissed for failure to

state a claim upon which relief may be granted.” Id. at

853. The Third Circuit’s holding is consistent with Neitzke

18

v. Williams, 490 U.S. 319 (1989), in which this Court held

that a complaint which fails to state a claim sufficient to

withstand a Rule 12(b)(6) motion is not automatically

frivolous within 28 U.S.C. § 1915(d), so as to be subject to

dismissal when brought in forma pauperis. See, Catz &

Guyer, Federal In Forma Pauperis Litigation: In Search of

Judicial Standards, 31 Rutgers L. Rev. 655, 665 (1978).

Numerous cases have recognized that some limited

piercing of the allegations to discover fraudulent joinder

may be appropriate in some circumstances, but there is a

lack of consistency in the approach and outcome. For

example, in Smoot v. Chicago, Rock Island & Pac. R.R. Co.,

378 F.2d 879 (10th Cir. 1967), diversity jurisdiction was

upheld where the non-diverse employee of defendant

railroad had uncontestedly discontinued his employment

with the railroad 15 months before the accident in ques-

tion. See also Lobato v. Pay Less Drug Store, Inc., 261 F.2d

406 (10th Cir. 1958) (absence of allegations that individual

non-diverse defendants participated in tortious acts

alleged). These cases do not adopt the approach used by

the Ninth Circuit and the Fifth Circuit, both of which go

well beyond the threshold inquiry of jurisdiction, and

delve into the merits of the allegations of the complaint in

Fed. R. Civ. Proc. 56(c) fashion.

Instead, the Tenth Circuit approach appears to agree

with that of the Third Circuit. In AIDS Counseling &

Testing Centers v. Group W Television, Inc., 903 F.2d 1000

(10th Cir. 1990), for example, the court pointed out that

the purpose behind the fraudulent joinder analysis is to

determine if “there [is] no real intention to get a joint

judgment, and . . . there [is] no colorable ground for so

claiming.” Id. at 1003.

19

For its part, the Second Circuit has stated,

In order to show that naming a non-diverse

defendant is a “fraudulent joinder” effected to

defeat diversity, the defendant must demin-

strate, by clear and convincing evidence, eit!-er

that there has been outright fraud committed in

the plaintiff's pleadings, or that there is no pos-

sibility, based on the pleadings, that a plaintiff

can state a cause of action against the non-

diverse defendant in state court. The defendant

seeking removal bears a heavy burden of pro-

ving fraudulent joinder, and all factual and legal

issues must be resolved in favor of the plaintiff.

Pampillonia v. RJR Nabisco, 138 F.3d 459, 460-61 (2d Cir.

1998).

However, it appears that the Second Circuit did

examine the underlying merits of the Complaint in decid-

ing that the non-diverse defendant had been joined

fraudulently in that case. See id. at 461-62.

In the instant case, the approach taken by the Ninth

Circuit led into a morass of state court procedure and

substantive law, illustrating yet another reason why this

expansion of federal court jurisdiction should be exam-

ined by this Court. In order to reach its determination

that the non-diverse defendants were fraudulently joined,

the circuit court in this case first held that California’s

procedural rules, specifically its “general demurrer”

rules, California Civil Code § 430.10(f), would permit the

California defendants to raise a statute of limitations

defense to Plaintiff's admittedly sufficient causes of

action when originally filed in state court. 139 F.3d at

20

1318. The Ninth Circuit inexplicably refused to even dis-

cuss that in state court Petitioner would have been

allowed to file opposing papers, declarations and to even

have filed a first amended complaint as a matter of right

in state court.

Next, still applying California procedure and sub-

stantive law, the circuit court purported to find that the

personal injury statute of limitations summary judgment

ruling in favor of Upjohn in Ritchey I would absolutely

preclude Petitioner from asserting in state court the fraud

and conspiracy causes of action he alleged against

Upjohn, Dement and the other California state residents

in the 1994 state court action, and simply assumed with-

out discussion the Plaintiff would not be able to plead a

state law exception to the application of the statute of

limitations or a state law exception to the bar of res

judicata, a bar solely based on the earlier summary judg-

ment founded on the statute of limitations. Id.4

In so ruling, the circuit court ignored the effect of

settled California law, which holds that a summary

* In California State courts Upjohn has lost every published

case on Halcion. The California Supreme Court ruled against

them in a case dealing with pleading of actions. Carlin v.

Superior Court of Sutter County, 13 Cal. 4th 1104; 920 P.2d 1347,

1996; 56 Cal. Rptr. 2d 162 and the Court of Appeals most

recently (June of 1998) ruled against them in a case dealing with

the statute of limitations and summary judgment. Norgart v.

Upjohn Co., 64 Cal. App. 4th 192 (1998), 74 Cal. Rptr. 2d 807.

Further, the case relied upon by all defendants in District Court

in the Ritchey I] case for the proposition that the Statute of

Limitations had run, and, indeed, the one cited and relied upon

below by the District Court (Bristol-Meyers Squibb Co. v. Superior

Court (1995), 32 C.A. 4th 959), was extensively criticized as bad

law by the Norgart Court, and the court refused to follow it.

21

judgment based on the statute of limitations regarding a

cause of action in one suit is not res judicata in a second

suit, even when the cause of action pleads the same core

of underlying facts but alleges newly discovered evidence

indicating that the bar of the statute of limitations does

not apply. CCP 597 and Lucas v. County of Los Angeles, 47

C.A. 4th 277 (July 1996). Significantly, neither the district

court nor the circuit court suggested that the California

defendants were improperly joined in violation of Cali-

fornia procedural rules, and Petitioner’s allegations of

joint liability against all the defendants, diverse and non-

diverse alike, were unquestionably made in good faith

under California substantive and procedural rules of law.

In taking this approach, the Ninth Circuit strayed far

from its obligation to make a determination whether the

Petitioner had actually joined the California citizens as

defendants fraudulently and without an intent to proceed

against them in state court. Instead, as a perusal of the

district court’s Orders in this matter illustrates, the court

applied the same Fed. R. Civ. Proc. 12(b)(6) analysis to all

of the defendants, diverse and non-diverse, and deter-

mined that Petitioner had failed to state a claim against

any of them. App. 18. But as the Third Circuit pointed out

when it rejected this approach, the Ninth Circuit thus

“stepped from the threshold jurisdictional issue into a

decision on the merits.” Boyer, 913 F.2d at 112. This a

federal court sitting in diversity may not do under Article

Ill, Section 2. See Chesapeake & Ohio Ry. v. Cockrell, 232

U.S. 146, 34 S.Ct. 278, 58 L.Ed. 544 (1914).

The effect of the circuit court’s holding in this case is

to usurp the power and the right of California’s courts to

determine whether one California citizen’s claim against

22

other California citizens is truly barred by California’s

statute of limitations and California’s rules of res judi-

cata, all in the name of protecting a non-Californian’s

statutory purported right of access to federal court. While

the Fifth Circuit evidently agrees with the Ninth Circuit's

approach in such matters, this Court’s prior rulings as

well as holdings in the Second, Third and Tenth Circuits

would produce a contrary result.

Certiorari should be granted to resolve this conflict

in views taken by the circuits on fraudulent joinder as a

basis for asserting diversity jurisdiction, for presently the

Fifth and Ninth Circuits have adopted rules which

improperly expand federal subject matter jurisdiction

beyond its statutory limits and Article III of the Constitu-

tion, diminish States’ rights and deprive plaintiffs of their

right to pursue their state law claims in a state court of

general jurisdiction, a court better suited to apply state

procedural and substantive law.

In sum if Petitioner truly had no valid state cause of

action against the non-diverse defendants, all defendants

could have filed motions in state court and the matter

there just as quickly, or even more so, disposed of than in

Federal Court. Also, of course, the non-diverse defen-

dants could have sought summary judgment, claiming

res judicata and/or the bar of the statute of limitations, in

state court and then Upjohn could have then removed

based upon diversity, and, if granted, then sought in

federal court the below requested summary judgment, or

in the alternative, 12(b)(6) relief.

Petitioner contends the federal court should not have

and did not need to decide the numerous state law issues

23

and claims. If all the Defendants named in Ritchey II had

filed motions in state court seeking orders terminating

the action, no federal court expenditure of resources

would have been necessary and the issue would not have

been wrongly decided. The federal court would not have

interfered in state law matters, Article III of the United

States Constitution would have been better respected,

and with limited federal judicial resources better pre-

served.

It is also Petitioner’s contention that by specifically

stating in the second paragraph of 28 U.S.C. § 1446(b)

“ _.. except that a case may not be removed on the basis

of jurisdiction conferred by Section 1332 of this title more

than one year after commencement of the action”, Con-

gress intended no “Section 1332” removal occur “more

than one year after commencement of the action.” This of

course would apply to all diversity removal, probably the

most unnecessary and perhaps the largest expenditure of

limited federal judicial time and resources. Congress and

the Judicial Conference of the United States would not

have been unhappy with such a savings to the federal

judicial system, and others would be pleased with the

resulting respect for the rights of the states to administer

their own laws, especially when their own citizens are

involved.

24

CONCLUSION

The petition for writ of certiorari should be granted

so these important statutory and constitutional questions

on the proper role of federal courts in deciding state

factual issues and state law questions of procedural and

substantive law as applied to state domiciled defendants.

Respectfully submitted,

Micnuaet D. MosHER

Rosert S. Catz

Counsel of Record

50 North Main Street

Paris, Texas 75460-4721

(903) 785-4721

Counsel for Petitioner

August 25, 1998

APPENDIX INDEX

Page

Opinion in Ritchey v. Upjohn Drug Co., et al., No.

PONE POU CAE, ONIN ce oes penn as eaas es App.

Order Granting Defendants’ Motions to Dismiss,

No. C-96-20067 RMW (N.D. Cal. Sep. 9,

PE ian FOUN -hdth oO MOA NESE CORO RE RO EOS App.

Order Denying Plaintiff's Motion to Remand, No.

C-96-20067 RMW (N.D. Cal. Sep. 9, 1996)....App.

Order Denying The Petition for Rehearing and the

Suggestion for Rehearing En Banc, No. 96-17014

(Sth Cir. May 27, 1998)... ..0ccccwceeenseeeee App.

Complaint for Damages, No. 12837, Superior

Court, State of California, County of Santa

Crete, Fath. FD, FFOR oases cece svessccccasusees App.

Memorandum Opinion, Ritchey v. Upjohn Drug

Co., et al., No. 94-15171 (9th Cir. 1995) ...... App.

Complaint, No. 113198, State of California,

County of Santa Cruz, Mar. 12, 1990......... App.

Notice of Intent to File Petition for Remand,

Notice that Consent to Remand was Requested

and Refused, and Notice of Request for Sanc-

CUE scr kavacnscaensevsctearverheoneenagens App.

Declaration of Joe Ritchey in Support of Petition

ge re Sor ee ee ee er ee ee ee eee App.

18

25

36

37

53

56

68

74

App. 1

APPENDIX

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

No. 96-17014

Joe B. Ritcuey, . .

Plaintiff-Appellant, D.C. No

v. CV-96-20067-RMW

UpjoHN Druc Company;

WiiuiAM Dement, OPINION

Defendants-Appellees.

Ne ee eee ee ee ee

Appeal from the United States District Court

for the Northern District of California

Ronald M. Whyte, District Judge, Presiding

Argued and Submitted

February 13, 1998 - San Francisco, California

Filed April 3, 1998

Before: Procter Hug, Jr., Chief Judge, and

Ferdinand F. Fernandez and Sidney R. Thomas,

Circuit Judges.

Opinion by Judge Fernandez

COUNSEL

Joe B. Ritchey, Santa Cruz, California, for the plaintiff-

appellant.

Michael F. Healy, Sedgwick, Detert, Moran & Arnold, San

Francisco, California, for the defendant-appellee; Charles

App. 2

Preuss, Preuss Walker, and Shanagher, San Francisco, Cal-

ifornia, for the defendants-appellees.

OPINION

FERNANDEZ, Circuit Judge:

Joe B. Ritchey brought this action against the Upjohn

Company, Dr. William Dement, and Stanford Health Ser-

vices! in the California Superior Court for Santa Cruz

County. Upjohn removed the case to the United States

District Court pursuant to 28 U.S.C. § 1441(a). That was

based upon Upjohn’s assertions that there was complete

diversity of citizenship between it and Ritchey, and that

the other purported defendants were shams because they

could rely upon the defenses of the statute of limitations

and res judicata. Ritchey moved to remand on the basis

that there was a lack of complete diversity. The district

court denied the remand and ultimately awarded sum-

mary judgment to all of the defendants. Ritchey appeals.

We affirm.

BACKGROUND

The gravamen of Ritchey’s action is that in 1983 and

thereafter he was taking Halcion, a drug manufactured

by Upjohn, which caused him to suffer a number of side

effects. Those ultimately led to his conviction of criminal

offenses, and other serious damages. He claims that

1 Whether service was ever properly made upon Stanford

Health Services is disputed by the parties. At any rate, a

voluntary appearance was made and we will hereafter refer to

the appealing party as Stanford.

App. 3

Upjohn was responsible because it suppressed informa-

tion about the side effects, and that Dr. Dement and

Stanford conspired with Upjohn to conceal the negative

information they all had about Halcion.

This action was filed in state court in 1994, but it was

not the first time Ritchey had sued Upjohn over Halcion.

In fact, he had brought an action in March of 1990 based

on the same ingestions of the drug and the same resulting

injuries. In October of 1993, the United States District

Court had granted summary judgment against him on the

grounds that at its core the action was one for personal

injuries and California’s one-year statute of limitations

- for personal injury actions had run before he sued. We

affirmed that dismissal on June 6, 1995. See Ritchey v.

Upjohn Drug Co., No. 94-15171 (9th Cir. 1995)

(unpublished disposition).? In Ritchey I we held that he

was clearly on notice about Upjohn’s wrongdoing, which

hurt him, as early as August of 1988 and no later than

March of 1989.

However, on January 3, 1994, which was after the

district court ruled but before we affirmed, Ritchey had

filed this action in state court. It was based upon the same

underlying facts as Ritchey I, but he also alleged that

Stanford, Dr. Dement, and Upjohn had engaged in a

conspiracy. He gave no notice of this action to the defen-

dants until sometime in December of 1995.9 On January

2 We will refer to this first course of action as Ritchey I.

3 Ritchey now suggests that the case was not removed

within the required 30 day period. See 28 U.S.C. § 1446(b). He

waived that issue when he failed to raise it within 30 days after

removal. See 28 U.S.C. § 1447(c); Northern California Dist. Council

App. 4

29, 1996, Upjohn removed this action to the United States

District Court, even though it is clear that Dr. Dement

and Stanford are not diverse. They and Ritchey are citi-

zens of the State of California. Upjohn, however, asserted

that Dr. Dement and Stanford were sham defendants,

who were fraudulently joined for the purpose of defeat-

ing diversity. It claimed that because, it said, the defenses

of res judicata and the statute of limitations, which arose

out of Ritchey I, barred any action against them. The

district court agreed and denied Ritchey’s motion to

remand. Ultimately, it also dismissed this action as

against Upjohn, Dr. Dement and Stanford on the ground

that it was barred by the determinations in Ritchey I. This

appeal followed.

STANDARDS OF REVIEW

We review the district court’s interpretation of a stat-

ute de novo. See Allen v. Shalala, 48 F.3d 456, 457 (9th Cir.

1995). We also review issues of subject matter jurisdiction

and denials of motions to remand removed cases de

novo. See Attorneys Trust v. Videotape Computer Prods., Inc.,

93 F.3d 593, 594 (9th Cir. 1996) (jurisdiction); Duncan v.

Stuetzle, 76 F.3d 1480, 1484 n.4 (9th Cir. 1996) (remand

denial). Finally, we review dismissals on the ground of

res judicata de novo. See United Parcel Serv., Inc. v. Califor-

nia Pub. Utils. Comm'n, 77 F.3d 1178, 1182 (9th Cir. 1996).

of Laborers v. Pittsburg-Des Moines Steel Co., 69 F.3d 1034, 1038

(9th Cir. 1995). Moreover, he did not raise the issue before us

until his reply brief. That he cannot do. See Eberle v. City of

Anaheim, 901 F.2d 814, 818 (9th Cir. 1990).

App. 5

JURISDICTION

We have jurisdiction pursuant to 28 U.S.C. § 1291. If

the district court had jurisdiction, it was pursuant to 28

U.S.C. § 1332(a) on the theory that this was a diversity

action, which was properly removed pursuant to 28

U.S.C. § 1441(a). That, however, raises the primary issues

in this case. We must first ask whether the action was

removable on any basis, and then ask whether it could be

removed on the basis that Dr. Dement and Stanford were

fraudulently joined defendants. That requires us to con-

strue 28 U.S.C. § 1446(b) and the law of fraudulent join-

der.

A. Section 1446(b)

Ritchey first argues that the removal of this action

was absolutely precluded by the provisions of 28 U.S.C.

§ 1446(b). We do not agree, but the explanation takes

some telling. We start, as we must, with the words of

§ 1446(b) itself:

The notice of removal of a civil action or pro-

ceeding shall be filed within thirty days after

the receipt by the defendant, through service or

otherwise, of a copy of the initial pleading set-

ting forth the claim for relief upon which such

action or proceeding is based, or within thirty

days after the service of summons upon the

defendant if such initial pleading has then been

filed in court and is not required to be served on

the defendant, whichever period is shorter.

If the case stated by the initial pleading is

not removable, a notice of removal may be filed

App. 6

within thirty days after receipt by the defen-

dant, through service or otherwise, of a copy of

an amended pleading, motion, order or other

paper from which it may first be ascertained

that the case is one which is or has become

removable, except that a case may not be

removed on the basis of jurisdiction conferred

by section 1332 of this title more than 1 year

after commencement of the action.

Id. While at first glance the statute appears rather clear,

Ritchey and others contend that a difficulty lurks within

it. Plainly enough the statute provides in its first para-

graph that a defendant can remove within 30 days of

service of the initial pleading upon him. The second

paragraph, however, explains that “[i]f the case stated by

the initial pleading is not removable,” the defendant can

remove at a time later than the 30-day period provided

for in the first paragraph. Id. However, the second para-

graph goes on to provide a broadly phrased exception

when it declares that “a case may not be removed on the

basis of jurisdiction conferred by § 1332 of this title

[diversity jurisdiction] more than 1 year after commence-

ment of the action.” Id. If that exception applies only to

the type of removal referred to in the second paragraph,

it does not preclude removal in this case unless the case

was not removable at its inception. If, as Ritchey argues,

the limitation in the second paragraph applies to both

that paragraph and the first paragraph, it does, on its

face, preclude removal of this case, regardless of the

condition of the original pleading. In other words,

removal would be precluded because considerably more

than 1 year had passed from the date of commencement

of this action to the date that Upjohn attempted to

App. 7

remove, even though neither it nor any other defendant

had been served between January 3, 1994, and December

of 1995.

As an initial matter, we must construe this statute by

looking at its plain language, which includes its sentence

structure. We recognize that “[rjemoval jurisdiction is

statutory and strictly construed.” Gould v. Mutual Life Ins.

Co. of New York, 790 F.2d 769, 773 (9th Cir. 1986). How-

ever, we see no reason to twist ordinary language usage

and rules of grammar in order to preclude removal. In

that regard, the most sound reading of a sentence will

refer its limiting clause back to the antecedent clause to

which it is attached, and not to other paragraphs or

sentences in the statute. See Pacificorp v. Bonneville Power

Admin., 856 F.2d 94, 97 (9th Cir. 1988). (“The date

limitation . . . refers directly back to the antecedent

phrase. .. . ”); Zogbi v. Federated Dep't Store, 767 F. Supp.

1037, 1029 (C.D. Cal. 1991) (“The general rule is that a

qualifying phrase or clause only modifies that which

immediately precedes it.”)

We see no reason to deviate from that mode of read-

ing here. The first paragraph of § 1446(b) addresses a

defendant's right to promptly remove when he is served.

The second paragraph addresses a defendant's right to

remove beyond the initial period of 30 days, if the case

only becomes removable sometime after the initial com-

mencement of the action. Only the latter type of removal

is barred by the one-year exception.

Because we are satisfied that this reading is plain on

the face of the statute, there should be little reason to

consider legislative history. See Oregon Natural Resources

App. 8

Council, Inc. v. Kantor, 99 F.3d 334, 339 (9th Cir. 1996) (if

the language of a statute is clear, we look no further in

determining its meaning, unless the apparent plain mean-

ing leads to an absurd or impracticable result); United

States v. Neville, 985 F.2d 992, 995 (9th Cir. 1993) (if the

statute is clear and unambiguous there is no need to turn

to legislative history); Coalition for Clean Air v. Southern

Cal. Edison Co., 971 F.2d 219, 227 (9th Cir. 1992) (“there is

no need to refer to the legislative history of a statute

when the language of the statute is clear”). Nevertheless,

as we will further discuss below, other courts have dis-

agreed with our reading. Thus, we have looked to the

legislative history. We find it rather unhelpful, but to the

extent that it helps at all it lends support to our reading.

The House Report expressed the thought that what Con-

gress was attempting to do was preclude removal “late in

the proceedings” at a time when “substantial progress

has been made in state court.” H.R. Rep. No. 889, 100th

Cong., 2d Sess., at 71-73 (1988) reprinted in 1988

U.S.C.C.A.N 5982, 6031-34. That supports the placement

of the exception in the second paragraph because ho

substantial progress could ordinarily be expected if the

case were immediately removable at the time of the initial

pleading. Generally speaking, the case would either be

removed promptly or not at all in that event.

While we are satisfied that the statute must be inter-

preted in this way, we acknowledge that the authorities

are not uniform on the issue. Two other courts of appeals

have touched on the subject, but have not resolved it. See

Burns v. Windsor Ins. Co., 31 F.3d 1092, 1097 n.12 (11th Cir.

1994) (suggesting that if there were no true non-diverse

party, the second paragraph would not apply); Singh v.

App. 9

Daimler-Benz AG, 9 F.3d 303, 309 (3d Cir. 1993) (mention-

ing the provision, but not deciding the question before

us). The district courts have been more active.

In Zogbi, 767 F. Supp. at 1039-40, the district court

pointed to the statutory structure we have already dis-

cussed and went on to note that if Congress had intended

the except clause to apply to both paragraphs of

§ 1446(b), it could easily have accomplished that result

without requiring readers of the statute to rely on exotic

grammatical usage. See also, Greer v. Skilcraft, 704 F. Supp.

1570, 1582 (N.D. Ala. 1989); Kite v. Richard Wolf Med.

Instruments Corp., 761 F. Supp. 597, 600-01 (S.D. Ind.

1989); cf. Coman v. International Playtex, Inc., 713 F. Supp.

1324, 1326 (N.D. Cal. 1989).

Other district courts have determined that the limita-

tion applies to both paragraphs because, in effect,

removal statutes must be strictly construed and comity

between state and federal courts will be preserved by that

construction. See O’Brien v. Powerforce, Inc., 939 F. Supp.

774, 778 & nn.1, 2 (D. Haw. 1996); Kinabrew v. Emco-

Wheaton, Inc., 936 F. Supp. 351, 353 (M.D. La. 1996); Beisel

v. Aid Ass'n for Lutherans, 843 F. Supp. 616, 618-19 (C.D.

Cal. 1994); Rashid v. Schenck Constr. Co., 843 F. Supp. 1081,

1086-87 n.6 (S.D. W. Va. 1993); Perez v. General Packer, Inc.,

790 F. Supp. 1464, 1468 (C.D. Cal. 1992); Hom v. Service

Merchandise Co., Inc., 727 F. Supp. 1343, 1345 (N.D. Cal.

1990); Rezendes v. Dow Corning Corp., 717 F. Supp. 1435,

1437-38 (E.D. Cal. 1989). With all due respect, we do not

see how strict construction or other considerations can

change the fact that the except clause is dependent on the

non-removablilty [sic] of the case stated in the initial

pleading. In saying all of this, we are not overlooking the

App. 10

Supreme Court’s comment that “[n]o case, however, may

be removed from state to federal court based on diversity

of citizenship ‘more than 1 year after commencement of

the action.’ ” Caterpillar Inc. v. Lewis, __ U.S. __, __, 117

S. Ct. 467, 473, 136 L. Ed. 2d 437 (1996) (citation omitted).

However, in that case the Court was speaking of actions

not originally removable. Id. at __, 117 S. Ct. at 472-73.

Finally, some courts have applied equitable estoppel.

doctrines to permit removal once they have decided that

the except clause basically applies to defendants first

served after one year has passed. In that way, they have

attempted to ameliorate the fact that on their construction

of § 1446(b), a plaintiff need only file an action in state

court and then wait one year before service, if he wishes

to deprive the defendant of the ability to remove under

any circumstances. See e.g., Kinabrew, 936 F. Supp. at 353;

Saunders v. Wire Rope Corp., 777 F. Supp. 1281, 1283-85

(E.D. Va. 1991); cf., Kite 761 F. Supp. at 600-01; Coman, 713

F. Supp. at 1327-28; Greer, 704 F. Supp. at 1582-83. For the

purposes of this case we need not decide whether courts

should use that kind of sortilege to contract the except

clause with an exception-to-the-exception overlay, which

was not adopted by Congress. Suffice it to say that for

now our reading of the statute simply leaves it, and the

clause, where Congress put them.

B. Sham Defendants

Once we blow away the interpretive miasma and see

§ 1446(b) clearly, we must still consider whether this

action was removable under the first paragraph of

§ 1446(b), or to put it another way, whether there was

App. 11

diversity jurisdiction based upon the initial pleading, or

whether there is diversity jurisdiction at this time for that

matter. See 28 U.S.C. § 1332(a).

The existence of diversity jurisdiction certainly does

not appear on the face of Ritchey’s complaint. Moreover,

there can be little doubt that non-diverse defendants — Dr.

Dement and Stanford - have been joined in the action.

Thus, at first blush it must be said that there was no

diversity. But, says Upjohn, it is diverse and Dr. Dement

and Stanford were fraudulently joined or sham defen-

dants. In the posture of this case, we agree with that

conclusion.

It is a commonplace that fraudulently joined defen-

dants will not defeat removal on diversity grounds. See

Emrich v. Touche Ross & Co., 846 F.2d 1190, 1193 & n.1 (9th

Cir. 1988); McCabe v. General Foods Corp., 811 F.2d 1336,

1339 (9th Cir. 1987). But, “[f]raudulent joinder is a term of

art. If the plaintiff fails to state a cause of action against a

resident defendant, and the failure is obvious according

to the settled rules of the state, the joinder of the resident

defendant is fraudulent.” McCabe, 811 F.2d at 1339. In

deciding whether a cause of action is stated we have

declared that we will “look only to a plaintiff's pleadings

to determine removability.” Gould, 790 F.2d at 773. And,

we have commented that we will determine the “exis-

tence of federal jurisdiction . . . solely by an examination

of the plaintiff’s case, without recourse to the defendant's

pleadings.” Self v. General Motors Corp., 588 F.2d 655, 657

(9th Cir. 1978). At least that is true when there has not

been a fraudulent joinder. Id. at 659. Where fraudulent

joinder is an issue, we will go somewhat further. “The

defendant seeking removal to the federal court is entitled

App. 12

to present the facts showing the joinder to be fraudulent.”

McCabe, 811 F.2d at 1339; see also Wilson v. Republic Iron &

Steel Co., 257 U.S. 92, 97-99, 42 S. Ct. 35, 37-38, 66 L. Ed.

144 (1921); Chesapeake & Ohio Ry. Co. v. Cockrell, 232 U.S.

146, 153-54, 34 S. Ct. 278, 280-81, 58 L. Ed. 544 (1914);

Alabama Great S. Ry. Co. v. Thompson, 200 U.S. 206, 218-19,

26 S. Ct. 161, 165, 50 L. Ed. 441 (1906); cf. Smith v. Southern

Pac. Co., 187 F.2d 397, 400-01 (9th Cir. 1951).

That approach is reasonable and necessary. For exam-

ple, a defendant must have the opportunity to show that

the individuals joined in the action cannot be liable on

any theory. Thus, in McCabe we looked to the complaint

alone to determine that no wrongful discharge cause of

action could be stated against the managers of a company

for firing an employee of that company. See 811 F.2d at

1339. If we had been required to look at facts outside of

the complaint to decide that issue, we would have done

so. Similarly, the Supreme Court has pointed out that a

removing defendant could submit facts showing that a

resident defendant had “no real connection with the con-

troversy.” Wilson, 257 U.S. at 97, 42 S. Ct. at 37. But it is

noteworthy that these cases looked to whether the plain-

tiff truly had a cause of action against the alleged sham

defendants. The cases did not key on an inquiry as to

whether those defendants could propound defenses to an

otherwise valid cause of action. There is a distinction

between those two concepts. The Supreme Court touched

on the distinction in Chesapeake & Ohio Ry., 232 U.S. at

153, 34 S. Ct. at 280, where it declared that the assertion

made by the removing defendant “went to the merits of

the action as an entirety, and not to the joinder; that is to

say, it indicated that the plaintiff’s case was ill founded as

App. 13

to all the defendants.” Similarly, in Alabama Great S. Ry.,

200 U.S. at 218-19, 26 S. Ct. at 165, the Court refused to

find fraudulent joinder where a misjoinder of parties was

claimed by the defendant that was trying to remove the

action. The Court commented that, ultimately, the state

court might decide the joinder was not proper. In fact, if

it had jurisdiction the Court might have done so itself.

“But,” it said, “this does not change the character of the

action which the plaintiff has seen fit to bring, nor change

an alleged joint cause of action into a separable contro-

versy for the purpose of removal.” Id.; see also McCabe,

811 F.2d at 1339 (failure to state a cause of action); Kruso

v. International Tel. & Tel. Corp., 872 F.2d 1416, 1426-27 (9th

Cir. 1989) (joinder fraudulent where no cause of action

could be stated); Gasnik v. State Farm Ins. Co., 825 F. Supp.

245, 247 (E.D. Cal. 1992) (joinder fraudulent where no

cause of action could be stated); cf. Sessions v. Chrysler

Corp., 517 F.2d 759, 760-61 (9th Cir. 1975) (joinder not

fraudulent if case can withstand a 12(b)(6) motion

directed to sufficiency of the cause of action, however

labeled).

Similar distinctions have been drawn in the rules

governing federal question removal. Even when the area

involved is one where complete preemption is the norm,

if the complaint relies on claims outside of the preempted

area and does not present a federal claim on its face, the

defendant must raise its preemption defense in state

court. See Caterpillar Inc. v. Williams, 482 U.S. 386, 392-96,

107 S. Ct. 2425, 2430-31 96 L. Ed. 2d 318 (1987). The fact

that preemption might ultimately be proved does not

allow removal. Id. at 397-98, 107 S.Ct. at 2432; see also

Rivet v. Regions Bank, ___ U.S. __L 118 S. Ct. 921, 926, ___

App. 14

L. Ed. 2d ___ (1998); Westinghouse Elec. Corp. v. Newman &

Holtzinger, P.C., 992 F.2d 932, 934-36 (9th Cir. 1993). In

other words, when the defense is exogenous to the cause

of action itself, it will not turn a state action into a federal

one.

While the above would tend to suggest that an exog-

enous defense could not turn a true defendant into a

sham defendant, we need not resolve that issue. No

doubt the statute of limitations is a defense, and a rather

unique one at that. It is one that does not truly go to the

merits of the plaintiff’s claim in any sense. It does not

assert some excuse or justification for what the defendant

is alleged to have done, nor does it assert any release or

waiver of any right of action against the defendant. It

does not even deny the wrong or claim contributory fault

or set off. Rather, it virtually admits the validity of the

cause of action and the plaintiff’s right to collect upon it,

but asserts that the plaintiff waited too long to pursue the

cause of action. California has emphasized the fact that

the statute of limitations is a kind of procedural bar, and

not one which relates to the merits of the case. See Hop-

kins v. Andaya, 958 F.2d 881, 888 (9th Cir. 1992); Piazza

Properties v. State Dept. of Motor Vehicles, 71 Cal. App. 3d

622, 628, 138 Cal. Rptr. 357, 360 (1977); O’Neil v. Spillane,

45 Cal. App. 3d 147, 156, 119 Cal. Rptr. 245, 252 (1975). In

fact, California has pointed out that a judgment based on

the statute of limitations regarding a cause of action in

one suit is not necessarily res judicata in a second suit,

which pleads a different cause of action based on the

same core of underlying facts. See Koch v. Rodlin Enters.,

Inc., 223 Cal. App. 3d 1591, 1596-97, 273 Cal. Rptr. 438,

441-42 (1990).

App. 15

However, even though California takes that position,

it also takes the position that a defendant may file a

demurrer to a complaint on the theory that the complaint

“does not state facts sufficient to constitute a cause of

action.” Cal. Civ. Proc. Code § 43.10(f). It has long been

the law that this principle applies to statute of limitations

defenses, even though, technically, a defense is not part

of the cause of action itself. See Bank of America Nat'l Trust

& Sav. Ass'n v. Ames, 18 Cal. App. 2d 311, 314-15, 63 P.2d

1208, 1209-10 (1936). The defendant may file the demur-

rer when the defect appears on the face of the complaint

or in any material “of which the court is required to or

may take judicial notice.” Cal. Civ. Proc. Code § 430.30(a).

Moreover, it is clear that “[ijn ruling on a demurrer

essentially founded on res judicata,” a court may “take

judicial notice of a prior judgment in a different case even

though such judgment or its content is not pleaded in the

complaint. ... ” Flores v. Arroyo, 56 Cal. 2d 492, 496, 364

P.2d 263, 265, 15 Cal. Rptr. 87, 89 (1961).

In this case, when the strobe of judicial notice is

played upon Ritchey’s pleading, it appears perfectly clear

that the statute of limitations is a defense, which Califor-

nia would apply through the medium of a demurrer. The

action against Dr. Dement and Stanford is barred by the

statute of limitations. The harm was well knowr to

Ritchey several years before he brought his action, and he

also knew what wrongdoing had caused that harm. See

Ritchey I. Ultimately, it was Upjohn’s own alleged wrong-

doing in concealing information about Halcion which

caused the harm, as Ritchey previously alleged. See

Ritchey I. Ritchey has now attempted to cobble together a

claim that Dr. Dement and Stanford helped Upjohn to

App. 16

perpetrate that harm by helping it misrepresent data.

That, however, is outside the point. It is pellucid that by

the time the complaint in question was filed, January 3,

1994, the statute of limitations had long since run, regard-

less of whether Ritchey’s new cause of action is charac-

terized as a personal injury cause of action or a fraud

cause of action. Our decision in Ritchey I makes it clear

that the statute of limitations started to run in March of

1989 at the latest. Thus, as we held in Ritchey I, the one

year statute of limitations had clearly run. Moreover, in

California the statute of limitations for fraud is three

years. See Cal. Civ. Proc. Code § 338. Again, that three

year period had clearly run long before the current com-

plaint was filed.

We recognize that if Dr. Dement and Stanford had

not asserted the statute of limitations, Ritchey’s cause of

action against them might well be viable. That, again, is

the slight anomaly in speaking of the statute of limita-

tions as a ground for dismissing a complaint on the

theory that it does not state of cause of action. At any

rate, the statute of limitations was asserted in this case.

Therefore, under California law no cause of action was

stated. We recognize that it is, perhaps, slightly peculiar

to speak of Dr. Dement and Stanford as sham defendants

because the statute of limitations bars a claim against

them, when that would seem to lead to an argument that

Upjohn itself is a sham defendant because the statute of

limitations has also run against it. Nevertheless, the fact

is that Ritchey did not state a cause of action against

anyone, and his failure to state that cause of action

against Dr. Dement and Stanford demonstrates beyond

App. 17

peradventure that they were sham defendants for pur-

poses of removal. Id.

CONCLUSION

Upjohn faced Ritchey once before in the federal

courts and won the day. It now finds itself sued, along

with others, in an action that appears to be the same

essential claim as the one it faced before. Having pre-

vailed in the first agon in federal court, it understandably

does not wish to struggle with Ritchey in another forum,

even if the struggle turns out to be a short one. It is true

that in his second action Ritchey also joined non-diverse

parties, Dr. Dement and Stanford, but he has not spelled

out a cause of action against them under California law.

That being so, we hold that they were fraudulently joined

for diversity and removal purposes. As a result, this case

was properly removed. Upjohn and its co-defendants

need not answer Ritchey’s chamade to meet him in the

California Superior Court for Santa Cruz County.

AFFIRMED.

App. 18

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

NO. C-96-20067 RMW

ORDER GRANTING

DEFENDANTS’ MOTIONS

TO DISMISS

(Filed Sep. 9, 1996)

JOE B. RITCHEY,

Plaintiff,

v.

THE UPJOHN DRUG

COMPANY, WILLIAM

DEMENT, and DOES

1 through 10,

Defendants.

i

Defendants The Upjohn Drug Company (“Upjohn”),

Stanford Health Services (“Stanford”) and William

Dement (“Dement”) filed motions to dismiss pursuant to

Federal Rule of Civil Procedure 12(b)(6). The court has

read the papers submitted in connection with the motions

and heard the argument of counsel. For the reasons set

forth below, the court grants defendants’ motions to dis-

miss.

I. BACKGROUND

Plaintiff filed a complaint on March 12, 1990 in the

Santa Cruz Superior Court alleging injuries caused by the

ingestion of Halcion, a prescription sleeping medication

manufactured by Upjohn (“Ritchey I”). The action was

removed to this court based on diversity jurisdiction.

On October 26, 1993, this court entered an order

granting summary judgment in favor of Upjohn. Ritchey

v. Upjohn, D.C. No Civ. 92-20208 RMW (N.D. 1993) aff’d

App. 19

No. 94-15171 (9th Cir. 1995). This court concluded that the

one year statute of limitations applied to plaintiff's

claims. The evidence submitted by Upjohn demonstrated

that plaintiff was aware that Halcion may have been the

cause of his problems more than one year before filing

the complaint in March 1990. Therefore, this court con-

cluded that the statute of limitations barred plaintiff’s

claims against Upjohn. Plaintiff filed two motions for

reconsideration of the judgment with this court, both of

which were denied.

Plaintiff appealed the prior unfavorable judgment to

the United States Court of Appeals, Ninth Circuit. The

Court of Appeals affirmed this court’s grant of summary

judgment on June 8, 1995. Plaintiff petitioned for a

rehearing and a suggestion for a rehearing en banc, both

of which were denied on September 28, 1995.

On January 3, 1994, which was after the court

granted summary judgment in the prior action, plaintiff

filed this current action (“Ritchey II”) in Santa Cruz Supe-

rior Court. Ritchey II seeks recovery for the same alleged

injuries arising from plaintiff's use of Halcion. Upjohn,

Stanford and Dement are named defendants in Ritchey II,

which attempts to state causes of action for “fraud and

intentional misrepresentation” and “common law civil

conspiracy” to commit fraud. The defendants seek to

dismiss the complaint on the grounds, among others, of

res judicata and the bar of the statute of limitations.

ll. LEGAL STANDARD

The court may dismiss a complaint as a matter of law

for either of two reasons: (1) lack of a cognizable legal

App. 20

theory, or (2) the pleading of insufficient facts under a

cognizable legal theory. Robertson v. Dean Witter Reynolds,

Inc., 749 F.2d 530, 533 (9th Cir. 1984) (citations omitted).

in ruling on a motion to dismiss, district courts must

accept all material allegations of fact alleged in the com-

plaint as true and resolve all doubts in favor of the

plaintiff. Blake v. Dierdorff, 856 F.2d 1365, 1368 (9th Cir.

1988). The court, however, need not accept legal conclu-

sions asserted in the complaint even if pled as “facts.”

Papasan v. Allain, 478 U.S. 265, 286 (1986). The court is to

grant the motion to dismiss if it appears that plaintiffs

can prove no set of facts which would entitle plaintiffs to

relief. Sun Savings & Loan Assoc. v. Dierdorff, 825 F.2d 187,

191 (9th Cir. 1987).

Ill. DISCUSSION

Defendant Upjohn contends that the complaint in

Ritchey II states no claim upon which relief may be

granted because all causes of action have already been

determined to be barred by the statute of limitations.

Essentially, the doctrine of res judicata bars all

grounds for recovery which either were or could have

been asserted in prior litigation. Clark v. Bear Stearns &

Co., Inc., 966 F.2d 1318, 1320 (9th Cir. 1992). Pursuant to

28 U.S.C. section 1738, federal courts apply the res judi-

cata principles of the jurisdiction rendering the prior

judgment whose preclusive effect is asserted. Therefore,

the preclusive effect of a federal judgment in a diversity

case is governed by federal law. In re Energy Cooperative,

814 F.2d 1226, 1230 (7th Cir. 1987), cert. denied, 484 U.S.

928 (1987).

App. 21

There can be no question that final judgment was

rendered by this court on the plaintiff's claims. Disposi-

tion by summary judgment is as final and conclusive as

judgment after trial, and it should be deemed final judg-

ment for res judicata purposes. The factual and legal

issues regarding the bar of the statute of limitations were

before this court repeatedly for over a year in Ritchey I.

This court determined that all causes of action alleged in

Ritchey I arose from the alleged violation of plaintiff's

right to be free from personal injury and were governed

by the one year limitations period. The court further

concluded that plaintiff's complaint was time-barred

because plaintiff suspected or should have suspected that

his alleged injuries were caused by Halcion more than

one year prior to filing his initial complaint on March 12,

1990. The judgment in Ritchey I was affirmed by the

Ninth Circuit Court of Appeals.

The complaint in Ritchey II names the same defen-

dant as the previous suit, Upjohn. In Ritchey I, plaintiff

essentially asserted that his use of Halcion caused him to

suffer various psychological and physiological effects

such as depression, paranoia, insanity, and hallucina-

tions. Plaintiff alleges the same injuries in his new com-

plaint. Plaintiff also alleges the same acts by defendant

Upjohn caused the injuries, except that more acts were

alleged in the previous complaint than are alleged here.

“A cause of action does not consist of facts, but the

unlawful violation of a right which the facts show.”

McClain v. Apodaca, 793 F.2d 1031, 1033, note 3 (9th Cir.

1986). Plaintiff’s right to be free from personal injury is at

the root of both actions. Similarly, both complaints allege

that plaintiff’s injuries arising from his use of Halcion

App. 22

were somehow caused by defendant Upjohn. Therefore,

the underlying cause of action for both complaints is

identical. A federal court may apply res judicata to a

prior summary judgment granted by a federal court on

the ground that the action is barred by the statute of

limitations. Salveson v. Western States Bankard Ass'n, 731

F.2d 1423, 1429 (9th Cir. 1982).1 A final judgment has

already been rendered on the causes of action set forth in

plaintiff's new complaint. Thus, it is barred by the doc-

trine of res judicata.

Plaintiff contends in his motion to remand that

Ritchey II is not barred by res judicata because conspiracy

and pure economic fraud were not at issue in the prior

action. Plaintiff is merely attempting to allege new legal

theories to recover for violation of the same primary

right. A subsequent action advancing a different legal

theory based on the same events and injuries is barred by

a final decision in the first action where that theory could

have been argued as an alternative or additional ground

for recovery. Salveson v. Western States Bankard Ass'n, 525

F.Supp. 566, 582 (N.D. Cal. 1981), aff’d in part, rev’d in

part, 731 F.2d 1423 (9th Cir. 1982). Plaintiff’s fraud cause

of action consists solely of allegations made in Ritchey I.

The allegations in plaintiff’s “common law conspiracy”

claim are identical to those contained in his “common law

civil conspiracy” claim in Ritchey I.2 Regardless of the

1 Salveson was superseded by statute on other grounds, as

noted in Etheridge v. Harbor House Restaurant, 861 F.2d 1389 (9th

Cir. 1988).

2 This court dismissed plaintiff’s prior conspiracy claim

with leave to amend his complaint. Instead, plaintiff pursued

App. 23

legal theory used to obtain recovery, plaintiff's claims

arising out of his use of Halcion are barred by the doc-

trine of res judicata.

While plaintiff contends that he has recently discov-

ered information to support his new complaint, “addi-

tional evidence of the same wrongful conduct and injury

is not tantamount to a new right of action.” Salveson, 525

F.Supp. at 583. This is especially true where plaintiff

“knew enough to allege fraud” in the first suit. Id.

The fact that defendants Dement and Stanford were

not named parties in Ritchey I does not affect their ability

to assert that the new action is barred as to them. Once a

plaintiff suspects or should suspect “wrongdoing,” the

limitations period commences to run as to the universe of

potential defendants. Bristol-Myers Squibb Company v.

Superior Court (Carol Jones), 32 Cal.App.4th 959, 964

(1995). Therefore, plaintiff’s claims against defendants

Dement and Stanford relating to their alleged role in

plaintiff’s use of Halcion are also barred by the one-year

statute of limitations.

IV. ORDER

For the foregoing reasons, the court grants defen-

dants’ motions to dismiss.

the fraud claim anu did not amend his conspiracy claim further

in the previous action.

App. 24

DATED: 9/6/96

/s/ Ronald M. Whyte

RONALD M. WHYTE

United States District Judge

Copy of Order mailed on 9/9/96 to:

Joe B. Ritchey

1088 La Madrona Drive

Santa Cruz, CA 95060

Counsel in pro per

Larry R. O’Neal

Shook, Hardy & Bacon

One Kansas City Place

1200 Main Street

Kansas City, MO 64105

Counsel for Defendant The Upjohn Company

Michael F. Healy

Sedgwick, Detert, Moran & Arnold

One Embarcadero Center, 16th Floor

San Francisco, CA 94111-3765

Counsel for Defendant The Upjohn Company

Elizabeth L. Ewert

Preuss, Walker & Shanagher

595 Market Street, 16th Floor

San Francisco, CA 94105-2825

Counsel for Defendants William Dement and

Stanford Health Services

App. 25

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

NO. C-96-20067 RMW

ORDER DENYING

JOE B. RITCHEY,

Plaintiff,

‘ PLAINTIFF'S

MOTION TO REMAND

ee DRUG (Filed Sep. 9, 1996)

DOES 1 through 10,

)

)

)

)

)

)

WILLIAM DEMENT, and

)

Defendants. )

)

Defendant Upjohn removed this action from the

Santa Cruz Superior Court on January 29, 1996 on the

basis of diversity jurisdiction. Plaintiff filed a timely

motion to remand the action to state court. The court has

read the moving and responding papers and heard the

argument of counsel. For the reasons set forth below, the

court denies plaintiff's motion to remand.

I. BACKGROUND

This court entered judgment against plaintiff in a

prior, essentially identical action on October 26, 1993.

Ritchey v. Upjohn, D.C. No. Civ. 92-20208 RMW (N.D. Cal.

1993) aff’d No. 9415171 (9th Cir. 1995) (“Ritchey I”).

Plaintiff appealed that judgment to the Ninth Circuit

Court of Appeals after filing the present action in Santa

Cruz Superior Court on January 3, 1994 (“Ritchey II”).

However, he made no attempt to serve or notify Upjohn

of Ritchey II until he mailed Upjohn a copy of the sum-

mons and complaint on December 29, 1995. Defendant

_—

App. 26

Upjohn claims that it received a copy of the complaint on

January 9, 1996. Defendant Upjohn filed a notice of

removal to this court on January 29, 1996. Plaintiff then

filed a timely motion to remand the action to state court

on February 27, 1996. Stanford Health Services filed a

“Joinder In Notice of Removal of Action” on March 5,

1996.!

Il. DISCUSSION

A. WAS REMOVAL TIMELY?

Plaintiff contends that defendants’ removal was

untimely because of the one-year restriction in the second

paragraph of 28 U.S.C. section 1446(b). Section 1446(b)

provides:

The notice of removal of a civil action or pro-

ceeding shall be filed within thirty days after

the receipt by the defendant, through service or

otherwise, of a copy of the initial pleading set-

ting forth the claim for relief upon which such

action or proceeding is based, or within thirty

days after the service of summons upon the

defendant if such initial pleading has then been

filed in court and is not required to be served on

the defendant, whichever period is shorter.

If the case stated by the initial pleading is not

removable, a notice of removal may be filed

within thirty days after receipt by the defen-

dant, through service or otherwise, of a copy of

an amended pleading, motion, order or other

paper from which it may first be ascertained

1 Defendant Stanford Health Services was sued as Stanford

Sleep Disorders Clinic and claims it was never properly served.

CRP err er

App. 27

that the case is one which is or has become

removable, except that a case may not be removed

on the basis of jurisdiction conferred by section 1332

of this title more than 1 year after commencement of

the action. (Emphasis added).

Essentially, plaintiff contends that the statute should

be construed narrowly against removal by reading the

last clause of section 1446(b), which contains the one-year

restriction, as being applicable to both paragraphs of the

subsection. Removal of any diversity case would then be

barred after one year, regardless of whether the case was

initially removable or later became removable on the

basis of something other than the initial pleading.

Defendants contend that the one-year limit in section

1446(b) only applies to diversity cases removed pursuant

to the second paragraph of the section (those removed on

the basis of something other than the initial pleading). In

accordance with the first paragraph of the statute, defen-

dants filed the petition for removal within 30 days after

they were served with the original complaint. Therefore,

defendants claim that removal was timely and that the

second paragraph of 1446(b), including the one-year

restriction, does not apply.

The Ninth Circuit Court of Appeals has not

addressed the issue of whether the one-year limitation on

removal applies only to cases covered by the second

paragraph of 1446(b), or to all removed diversity cases.

The district court decisions are in conflict on this issue.

Defendants heavily rely on Zogbi v. Federated Dept.

Store, 767 F.Supp. 1037 (C.D.Cal. 1991) in support of their

App. 28

position. The court finds the reasoning of Zogbi persua-

sive and agrees with its result. In Zogbi, the plaintiff filed

suit in state court in California and then waited almost

three years before serving two California defendants. A

third, non-resident defendant was not properly served,

but received a copy of the complaint at the same time.

The non-resident defendant promptly removed the case

to federal court on the basis of diversity jurisdiction, but

the plaintiff attacked the removal as improper because it

was done more than one year after the commencement of

the suit.

The Zogbi court held that the one-year restriction

clause in the second paragraph of 1446(b) does not apply

to cases which are removable upon receipt of the initial

pleading. Id. at 1042. Using the principles of statutory

interpretation, the court reasoned that the “except

that...” clause only limits the availability of removal on

the basis of something other than the initial pleading. Id.

at 1039. This conclusion is supported by the structure of

the statute, i.e., the separation of the two sentences into

distinct paragraphs. The “except that... ” clause cannot

reasonably be read as also modifying the first paragraph

of section 1446(b). Id. The first paragraph appears to state

the general rule, while the second paragraph states a

specific exception. In fact, section 1446(b) was composed

solely of the first paragraph until the second paragraph

was added in 1949. Kaneshiro v. North American Company

for Life and Health Insurance, 496 F.Supp. 452, 460 (D.Haw.

1980). The court further stated that if Congress intended

2 The court also held that the California defendants were

fraudulently joined.

ict AE RES ILE RN PEERS IAA NRO E OE TI

Fei ecient Re FOR ie

App. 29

to prevent removal in all diversity cases commenced

more than one year prior to removal, Congress could

have worded the statute to accomplish that result. Zogbi,

767 F.Supp. at 1039-40.

In addition to the principles of statutory interpreta-

tion, the legislative history of section 1446(b) also sup-

ports the conclusion that the one-year limitation only

applies to cases removed pursuant to the second para-

graph of section 1446(b). Congress was concerned “with

removal of cases commenced in state courts that had

progressed towards trial.” Id. at 1040 (citation omitted).

However, when cases are timely removed by defendants

after they are initially served, there is normally no delay

or disruption of the proceeding. In the present case, no

action has been taken in the state court and removal will

not create any delay or frustrate the intentions of Con-

gress.

Moreover, application of the one-year limit to the

first clause of section 1446(b), where it does not appear,

would encourage plaintiffs to delay service, therefore

preventing removal on the basis of diversity jurisdiction.

Although removal statutes have historically been strictly

construed, this court does not believe that Congress

intended that a plaintiff could unilaterally defeat a defen-

dant’s removal right by deliberating delaying service.

The court recognizes that authority exists that sup-

ports plaintiff’s position, namely that the one-year limita-

tion provides an outside limit for removal even if none of

the defendants has received notice of the action through

service or otherwise within a year of its filing. Plaintiff

primarily relies on three district court cases from this

App. 30

circuit in which removal was barred because more than

one year had passed since the action commenced:

Rezendes v. Dow Corning Corp., 717 F.Supp. 1435 (E.D.Cal.

1989), Hom v. Service Merchandise Co., 727 F.Supp. 1343

(N.D.Cal. 1990), and Perez v. General Packer, Inc., 790

F.Supp. 1464 (C.D.Cal. 1992).

In Hom, the court was faced with a removal based on

an amended pleading. The Hom court looked only at the

language of section 1446(b). The court did not examine

the structure of the section, nor did it consider the legisla-

tive history behind it.

In Rezendes, the court instructed plaintiff to file a

motion to remand the action in light of several procedural

irregularities in the removal. While the court did consider

the language and legislative history of section 1446(b), it

did not consider the fact that the section is divided into

two distinct paragraphs. The Rezendes court relied heavily

on the general polity of strict construction against

removal. This court is not persuaded by the Rezendes

court’s broad reading of the section and its legislative

history and respectfully disagrees with its decision. The

legislature was concerned with changing the forum of

actions which had progressed in the state court which is

what normally will have occurred in the type of cases

described in the second paragraph of section 1446(b), the

paragraph to which the one-year limitation logically

applies. Substantial progress will not have been accom-

plished in cases like the present one and most of those

described in the first paragraph of section 1446(b).

Perez involved the somewhat unusual situation in

which the complaint was amended after service of the

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App. 31

two original diverse defendants (who plaintiff decided

not to pursue) to name two foreign defendants. The court

held that the removal by the two foreign defendants was

barred because it was accomplished more than one-year

after the action was commenced. Perez suggests that

applying the one-year limit to both paragraphs of section

1446(b) preserves comity between state and federal

courts. As discussed above, this court does not believe

comity is normally threatened by the type of cases

addressed in the first paragraph of section 1446(b). Fur-

ther, it seems illogical that Congress would give a defen-

dant a right to remove which could be defeated by the

unilateral action of a plaintiff taken without notice to, or

the knowledge of, the defendant.

The basis for removal of this action was ascertained

from the initial pleading, and the notice of removal was

filed within thirty days after defendants’ receipt of the

initial pleading. Since the court does not find that the

one-year limitation as stated in the second paragraph of

section 1446(b) applies to diversity cases removed on the

basis of the initial pleading, the court finds that the

removal of this action was timely.°

3 At least one court has held that the one year limitation is

not triggered if the plaintiff does not attempt in good faith to

serve the complaint. Greer v. Skilcraft, 704 F. Supp. 1570 (N.D.

AL. 1989). However, it appears that in California an action is

commenced when it is filed. Nevertheless, under the

circumstances here, a good argument could be made that

plaintiff should be estopped from objecting to removal on the

basis that removal was not timely. Plaintiff filed Ritchey Il

knowing that defendant Upjohn had previously removed

Ritchey I. He then delayed giving any notice of Ritchey II to

defendant even though he knew that defendant would

App. 32

B. WAS REMOVAL PROPER?

Under 28 U.S.C. section 1441, removal is authorized

in any civil action brought in a state court of which the

federal district courts have original jurisdiction. The fed-

eral courts have original jurisdiction of civil actions

where the matter in controversy exceeds the sum of

$50,000 and is between citizens of different states pur-

suant to 28 U.S.C. section 1332.

Plaintiff contends that the presence of defendant

Dement and the served Doe defendants destroys diver-

sity. Defendants argue that Dr. Demerit and Stanford,

both California residents, have been fraudulently joined

and their citizenship should be disregarded for the pur-

poses of determining if diversity jurisdiction exists.*

Fraudulent joinder of parties exists where there is no

reasonable basis in fact or colorable ground to support

the claim against the joined defendant. Wilson v. Republic

Iron & Steel Co., 257 U.S. 92, 98 (1921); McCabe v. General

Foods Corp., 811 F.2d 1336, 1339 (9th Cir. 1987).

Defendants argue that plaintiff has no colorable claim

against defendants Dement and Stanford because the

undoubtedly want to remove. The court, however, does not

need to reach the issue of estoppel, since it has found that

removal was timely under the first paragraph of section 1446(b).

* Under 28 U.S.C. § 1446(a), all defendants in a state action

must join in a petition for removal, except for nominal,

unknown, or fraudulently joined parties. This rule only applies,

however, to defendants properlyjoined and served in the action.

Emrich v. Touche Ross & Co., 846 F.2d 1190, 1193 n.1 (9th Cir.

1988).

App. 33

allegations against them are barred by the statute of

limitations.

On November 1, 1993, this court entered judgment

against plaintiff in Ritchey I. Ritchey v. Upjohn, D.C. No.

Civ. 92-20208 RMW (N.D. Cal. 1993) aff’d No. 94-15171

(9th Cir. 1995). This court concluded that personal injury

arising from the ingestion of Halcion was the gravamen

of plaintiff's complaint and, thus, the one-year statute of

limitations applied. The court found that plaintiff was on

notice of his claims arising out of his use of Halcion more

than a year before he filed his complaint, and the case

was dismissed. The judgment against plaintiff was

affirmed by the Ninth Circuit upon appeal.

Ritchey II was filed in state court in January 1994.

The complaint in Ritchey II arises from the same alleged

injuries and damages as in Ritchey I. Nearly all of the

Ritchey II complaint was copied verbatim from the fraud

and conspiracy causes of action in Ritchey I. See Exhibit

EE to Declaration of Annette C. W. Hughes in Opposition

of Plaintiff’s Motion to Remand to State Court. Plaintiff

attempts to distinguish his claims in Ritchey II by calling

them “direct fraud,” “economic fraud,” and “pure fraud.”

However, plaintiff is merely attempting to allege new

legal theories to recover for violation of the same primary

right at issue in the prior action: the right to be free from

personal injury. Regardless of the legal theory used to

obtain recovery, plaintiff’s claims arising out of his use of

Halcion are barred by the one-year statute of limitations.

App. 34

The fact that defendants Dement and Stanford were

not named parties to Ritchey I is irrelevant. Once a plain-

tiff suspects or should suspect “wrongdoing,” the limita-

tions period commences to run as to the universe of

potential defendants. Bristol-Myers Squibb Company v.

Superior Court (Carol Jones), 32 Cal.App.4th 959, 964

(1995). Therefore, plaintiff’s claims against defendants

Dement and Stanford relating to their alleged role in

plaintiff’s use of Halcion are also barred by the one-year

statute of limitations.

The previous judgment conclusively determined that

plaintiff’s entire cause of action, regardless of the alleged

theory of recovery, was time-barred. Plaintiff cannot now

relitigate his claims and is bound by this court’s prior

judgment. Because he cannot support a claim against

defendants Dement and Stanford, this court finds that they

have been fraudulently joined and diversity jurisdiction is

not destroyed by their presence. If a nondiverse party is

found to have been “fraudulently joined,” it may be dis-

missed ana ignored for purposes of determining whether

the case w: « properly removed to federal court. McCabe v.

General Foods Corp., 811 F.2d 1336 (9th Cir. 1987).

IV. ORDER

For the foregoing reasons, the court denies plaintiff's

motion to remand.

DATED: 9/6/96

/s/ Ronald M. Whyte

RONALD M. WHYTE

United States District Judge

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aerate NAIM ELIE 1 oe Reagan

App. 35

Copy of Order mailed on 9/9/96 to:

Joe B. Ritchey

1088 La Madrona Drive

Santa Cruz, CA 95060

Counsel in pro per

Larry R. O’Neal

Shook, Hardy & Bacon

One Kansas City Place

1200 Main Street

Kansas City, MO 64105

Counsel for Defendant The Upjohn Company

Michael F. Healy

Sedgwick, Detert, Moran & Arnold

One Embarcadero Center, 16th Floor

San Francisco, CA 94111-3765

Counsel for Defendant The Upjohn Company

Elizabeth L. Ewert

Preuss, Walker & Shanagher

595 Market Street, 16th Floor

San Francisco, CA 94105-2825

Counsel for Defendants William Dement and

Stanford Health Services

App. 36

NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

JOE B. RITCHEY, No. 96-17014

Plaintiff-Appellant, D.C. No. CV-96-20067-

RMW

Vv.

UPJOHN DRUG

COMPANY; WILLIAM

DEMENT,

Defendants-Appellees.

ORDER DENYING THE

PETITION FOR

REHEARING AND

REJECTING THE

SUGGESTION FOR

REHEARING EN BANC

(Filed May 27, 1998)

Ne me ee me ee ee ee ee ee eee ee”

Before: HUG, Chief Judge, FERNANDEZ, and

THOMAS, Circuit Judges.

The panel has unanimously voted to deny the appel-

lant’s petition for rehearing. The suggestion for rehearing

en banc was circulated to the judges of the court, and no

judge requested a vote for en banc consideration.

The petition for rehearing is DENIED and the sugges-

tion for rehearing en banc is REJECTED.

App. 37

In Pro Per

JOE B. RITCHEY - Bar No. 52130

1088 La Madrona Drive

Santa Cruz, CA 95060

(408) 426-6863

SUPERIOR COURT STATE OF CALIFORNIA

COUNTY OF SANTA CRUZ

JOE. B. RITCHEY, CASE NO. 128370

Plaintiff COMPLAINT FOR

v. DAMAGES AND

RECOVERY BASED

THE UPJOHN DRUG

COMPANY, William

Dement and DOES 1

through 10,

UPON FRAUD

AND CONSPIRACY TO

COMMIT FRAUD

Defendants (Filed Jan. 3, 1994)

/

NOW COMES the Plaintiff, In Pro Per, and alleges

the following as theories of recovery and causes of action:

FIRST CAUSE OF ACTION

Fraud and Intentional Misrepresentation

1. This complaint alleges violations of and recovery

under California statutes and case law against a Califor-

nia resident and the Upjohn Drug Company, a Corpora-

tion with its principal place of business in Kalamazoo,

Michigan. It also alleges violations of and recovery under

state laws and federal statutes as to the Upjohn Drug

Company, William Dement, various of its employees,

agents and directors and “independent researchers and

App. 38

clinicians.” The names of its employees, agents and direc-

tors who joined with Defendant Upjohn to defraud and

deceive the Food and Drug Administration and the con-

suming public, by submitting incomplete, misleading,

and false data in violation of the Federal Food, Drug and

Cosmetic Act, are unknown to this Plaintiff who will seek

leave to amend once the identities of said co-conspirators

and participants are discovered.

2. Plaintiff is a resident of Santa Cruz, California

and, following doctors’ recommendations and prescrip-

tions ingested the drug Halcion, manufactured and dis-

tributed by the Upjohn Drug Company.

3. All Defendants’, except the Upjohn Drug Com-

pany, and William Dement, names are unknown at this

time and thus sued as fictitious defendants.

4. The relief sought herein is for general and speci-

fic compensatory damages, treble damages, punitive

damages as allowed under California Statutory and Case

Law.

5. The relevant times of wrongful conduct and con-

spiracy the Upjohn Drug Company, William Dement, its

employees, agents and directors, commenced with its

first violation of the Food and Drug Cosmetic Act and

continues to the present date as a conspiracy and scheme

to devise, conduct and arrange concealment of, non-

disclosure of, and misrepresentations of, the side effects

and efficacy of the drug Halcion and to commit a fraud

and deceit upon the FDA, the consuming public, Halcion

users, and this Plaintiff specifically.

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App. 39

6. In its scheme, the Defendant Upjohn Company,

William Dement, certain of its employees, agents and

directors, have carried out illegal and corrupt acts and

continue to do so for the purpose of economic gain and to

avoid civil and criminal penalties. Said Defendants have

striven to conceal their civil and criminal liability and

illegal acts under various federal statutes and promul-

gated regulations and Plaintiff has just discovered a por-

tion of them within the last 18 months and had not

suspected any of them prior to a date on or about Sep-

tember/October 1991.

7. Based upon information and belief this Plaintiff

alleges that Defendant Upjohn Company is a multi-

national corporation with yearly gross revenues exceed-

ing $2,000,000,000 (Two Billion Dollars) per year, whose

principal business is the design, manufacture, and distri-

bution for public use of medical drugs for use by pre-

scription and purchase over the counter.

8. Commencing in a date yet undetermined in the

1970’s, Defendant Upjohn, certain of its employees,

agents and directors, began work to develop a new form

of Benzodiazepine, specifically Triazolam, for company

patent and tradename registration. As testing progressed,

undesirable side effects were noticed which to reasonable

unbiased observers would have raised concerns of the

safety and efficacy and need for such a new form of

sleeping aid.

9. As a scheme to capture a large market share of

the sleeping aid market, Defendant Upjohn, William

Dement, certain of its agents, employees and directors,

commenced their conspiracy to, through use of economic

App. 40

corruption and other means, withhold studies; misrepre-

sent studies; select favorable investigators, clinicians, and

monitors; adapt and continue to represent as true, false

and fraudulent data; to coerce and threaten in attempts to

suppress reasonable discussion of the safety of its prod-

uct, Halcion; and to unreasonably and unprofessionally

use the legal process against critics and injured claimants

seeking compensation for damage caused by the drug

Halcion.

10. The acts of Defendant Upjohn, William Dement,

certain of its agents, employees and directors, relating to

the creation, development, testing, distribution and sales

of Halcion, represent a general manner of doing business

by said Defendants.

11. In seeking FDA approval for Halcion, Defendant

Upjohn, acting through certain of its corrupt agents,

employees and directors, submitted protocol summaries

and data, knowing them to be incomplete, false and

misleading, and in seeking to represent the drug’s safety

and efficacy, represented as true certain protocol studies

and results, knowing them to be false, fraudulent and to

have been rejected by the FDA.

12. Defendant Upjohn, William Dement, certain of

its agents, employees and directors, knowingly under-

took a course of conduct to conceal, minimize and silence

warnings and concerns about the drug’s safety, knowing

that FDA approval caused the public to believe in Hal-

cion’s relative safety and efficacy. During all said times

Upjohn and William Dement had knowledge of serious

adverse undisclosed side effects and underreported the

la a Sin aR es iat hhc SREP RPE EDTA LED

Rig keratin ofa

App. 41

frequency of previously disclosed side effects and dis-

counted and minimized adverse reactions, knowing them

to be serious adverse experiences of which the public

would want to have knowledge in selecting which prod-

uct to rely upon as a sleep aid.

13. Defendant Upjohn and William Dement, at the

time of seeking FDA approval, knew of its duty to fully

and fairly report adverse side effects and to select investi-

gators who would fairly and without a bias study the

drug and present findings. For the purpose of economic

gain and competitive advantage, Upjohn failed to select

investigators, sub-investigators, clinicians and monitors

who had a neutral bias and lacked an inclination to favor

Upjohn. Defendant Upjohn and William Dement failed to

fully and fairly present study summaries and data to the

FDA and, with a purpose of playing upon the sub-

conscious of consumers, selected a trade name for its

drug to calm concern of adverse reactions, to equate drug

usage with peacefully, untroubled, happy and tranquil

experiences, and, knowing it to be otherwise, represented

that usage of the drug would lead to “golden, peaceful,

tranquil” moments.

14. Acting in the conspiracy above described,

Upjohn and William Dement violated civil statutes and

regulations, failed to fully and fairly study the drug for

the purpose of avoiding the confirmation of troubling

reports of adverse reactions to its mismamed drug, vio-

lated statutes and regulations calling for objective and

unbiased review of all drugs submitted to the FDA, failed

to reasonably notify its intended market of the potential

hazards and dangers of Halcion usage, all the while

intending that the select market population of potential

App. 42

consumers would remain ignorant of adverse reactions to

and/or potentially dangerous side effects stemming from

use of the drug.

15. Commencing in 1983 Plaintiff was prescribed

Halcion in dosages of 0.25 mg and 0.5 mg, purchased and

obtained, used and ingested said Halcion tablets as

intended by the manufacturer and as prescribed, such use

being consistent with guidelines set by the Upjohn Drug

Company and William Dement, and as intended and

foreseen by said Defendant. At the time of ingestion of

the tablets, the medication was pure and unadulterated

and as originally manufactured by Upjohn.

16. Commencing on or about January 1984, and

periodically to 1988, Plaintiff suffered, as a result of

ingestion of Halcion, confusion, anxiety, nervousness,

restlessness, fear of cancer and loss of health, clouding of

cognition, and other untoward reactions. Commencing in

May 1984 and periodically thereafter, Plaintiff ingested a

dosage table of 0.5 mg exclusively to aid in his sleep. As a

direct result of the 0.5 mg dosage, Plaintiff experienced a

bewildering and bizarre series of reactions, including

paranoia; severe clouding and cessation of thought; delu-

sions; hallucinations; depthless severe depression; feel-

ings of insanity; fear of insanity and of attack; panic; loss

of health; profound fears of cancer, death and impending

doom; worthlessness of life; thoughts of life termination;

aggression; detachment from reality; and other unex-

pected uncounseled reactions.

17. As a direct and proximate result of the apove

described reactions and induced states, Plaintiff under-

took a series of actions which culminated with his arrest

Eee ern G er emmrmey TT

App. 43

for serious crimes, loss of income, caused pain and suffer-

ing to the Plaintiff, general and specific damage to Plain-

tiff, loss of freedom, profession, and esteem, and resulted

in extreme anguish, grief and loss.

18. As a direct and proximate result of the above

described reactions and induced states, Plaintiff incurred

costs and expenses and economic losses in excess of

$1,000,000 and has sustained lasting and permanent dimi-

nution of his earning potential.

19. At all times relevant to the above conduct of

Upjohn and William Dement and of loss to the Plaintiff,

DOES I through 10 were employees, agents, consultants

and directors of Upjohn and William Dement, acting in

concert with and within the scope, course, and confirmed

authority of Upjohn and William Dement.

20. Asa direct and proximate result of the conspir-

acy of suppression and silence as above stated, Plaintiff

did not have reason to believe nor to reasonably suspect

fraud and conspiracy to commit fraud by Defendant

Upjohn Company, William Dement, certain of its

employees, agents, consultants and directors, until late

1991.

21. As a direct and proximate result of the acts of

Defendants, and each of them, Plaintiff has incurred and

will continue to experience loss of income, wages, costs,

other pecuniary damages, pain, suffering, distress,

anguish, and other loss and damages of both a specific

and general nature, in an extent not yet known to Plain-

tiff. Leave is requested to amend this complaint to con-

form to proof at the time of trial.

App. 44

22. Having such knowledge, or having cause to

have such knowledge, Upjohn, William Dement, DOES 1

through 5, intentionally and knowingly failed to warn

Plaintiff or any other target user of the hazards and

dangers of the ingestion of such formulation of Halcion.

Knowing that a substantial segment of the intended user

population was likely to develop, suffer, or experience

serious adverse reactions, consequences, and results, and,

after reasonable notice of the actual hazards and dangers,

said Defendants, and each of them, concealed and sup-

pressed the mounting evidence of such hazards and dan-

gers.

23. The above acts of concealment and suppression

were accompanied by disinformation, misrepresentation,

deceit and fraud upon the public and FDA, with the

intent to delay any and all adverse publicity that would

detract from Defendants promotion and sales of Halcion.

Said Defendants, and each of them, knew reports of

adverse reactions, untoward and bizarre experiences,

health threatening consequences, would negatively

impact marketing and sales, and deter a significant mar-

ket segment from purchase and use of said product.

24. At all times herein mentioned Defendant

Upjohn Company, William Dement and DOES I through

10, inclusive, knew that the drug Halcion, manufactured

and sold as a 0.25 mg and 0.5 mg tablet, was defective in

the manner herein above pled, and that such defect

unreasonably exposed the consuming public to personal

injury of a serious and profound nature and, yet notwith-

standing this knowledge, intentionally, willfully and con-

sciously, and in knowing disregard of the safety of such

persons and the Plaintiff herein, refrained from giving

App. 45

effective and proper notice of the defect to the pur-

chasers, placed and persisted in placing its defective

product into the stream of commerce, knowing and desir-

ing that the consuming purchaser would purchase said

product in its defective condition.

25. Commencing on or about the time Upjohn first

applied to the FDA for marketing approval of its drug

Halcion, Defendant the Upjohn Company, and William

Dement, and DOES I through 5, falsely and fraudulently

represented the true consequences and reactions to Halc-

ion. At said time and following through the manufactur-

ing, marketing, and distribution for sale of the drug

Halcion, the Defendant Upjohn Company, William

Dement and DOES I through 5 inclusive, had knowledge

that the drug caused potentially dangerous side effects of

an undisclosed nature, had a significant propensity to

cause health threatening reactions of a serious and pro-

found nature, and to otherwise wreak adverse conse-

quences upon the consuming public.

26. By submitting false and misleading information

concerning Halcion to the FDA, the Upjohn Company,

William Dement and DOES 1 through 5 inclusive, repre-

sented Halcion as reasonably safe for its intended use,

knowing said representations would be more likely to

procure approval of the drug than would disclosure of

true and unbiased studies, opinions, and investigations,

and of the true foreign marketing experience theretofore

observed with the drug Halcion. .5

27. When Defendant Upjohn Company, William

Dement and DOES 1 through 5 inclusive, made such

representations to the FDA they knew them to be false

App. 46

and knowingly made said representations with the intent

to deceive, mislead, and defraud the FDA and consuming

public, with the intent to induce the consuming public to

rely upon FDA approval obtained through unethical,

unprofessional, unscientific, biased and slanted reports,

investigations, and summaries.

28. Plaintiff, at the time of purchase and ingestion

of the 0.25 mg and 0.5 mg dosage, was ignorant of the

deceitful nature of Defendants’ conduct, was ignorant of

the falsity of the representations, and of the false pre-

tenses used to obtain FDA approval. Plaintiff reasonably

relied upon FDA approvais had and obtained through

deceitful, dishonest, intentionally wrongful means. Had

Plaintiff known the true, actual facts, Plaintiff would not

have purchased nor consumed said drug.

29. The said representations by Defendant Upjohn

Company, William Dement and DOES 1 through 5 inclu-

sive, were knowingly false in that said Defendants had

received reports, letters, and data directly recounting

adverse, untoward, dangerous, and adverse profound

reactions to and experiences with the drug Halcion, and

had chosen to ignore the reasonable need for clarifing

investigations and research into said product, deciding to

use the consuming public as its research experimental

base, all for the purposes of economic gain and competi-

tive advantage.

30. The aforementioned conduct of Defendant

Upjohn, William Dement and DOES 1 through 5 inclu-

sive, was intentional misrepresentation, knowing deceit,

concealment and distortion of material facts, and having

scienter and knowledge, said Defendants continued their

App. 47

despicable conduct having reasonable notice that said

conduct and wrongful acts would subject Plaintiff and the

consuming public to cruel and unjust hardships. Said acts

were taken in conscious disregard of the rights of the

public, the rights of Plaintiff, and in knowin=~ disregard of

the statutory and administrative regulations promu! gated

to protect the consuming public from dangerous and/or

unsafe drugs.

31. Commencing at a time on or about the first sale

of the 0.5 mg and 0.25 mg tablet, Defendant Upjohn

Company, William Dement and DOES 1 through 5, falsely

and fraudulently represented to medical practitioners

and the public, by means of articles in newspapers, trade

journals, medical journals, magazines, pamphlets, and

notices, with the intent to induce the public to purchase

Halcion, that Halcion was a safe and effective drug to be

used as a sleep aid, having benefits and efficacy superior

to those of similar products. In truth and in fact, said

representations were false, deceitful and made with a

knowing disregard of the truth for the purposes of eco-

nomic gain and competitive advantage

32. As a proximate and direct result of the above

stated despicable acts by Defendants, and each of them,

Plaintiff has been injured in the manners above stated.

Wherefore, Plaintiff prays for judgement as hereinaf-

ter pled.

App. 48

SECOND CAUSE OF ACTION

Common Law Civil Conspiracy

33. Plaintiff incorporates and realleges as set forth

herein all preceding paragraphs.

34. Plaintiff is informed and believes, and there-

upon alleges that at all times relevant to this action,

commencing on or about the preparation of IND safety

reports concerning the drug Halcion, Defendants tie

Upjohn Company, William Dement and DOES I through

10, composing employees, agents, consultants, investiga-

tors, and attorneys, commenced a conspiracy and concert

of action wherein each said party acted as a conspirator

and/or co-conspirator within the course and scope of

said conspiracy.

35. At or about said time, Defendants, and each of

them herein mentioned, knowingly and willfully con-

spired and agreed amongst themselves to misrepresent

the true nature, dangers, hazards, and risks associated

with the drug Halcion, especially at its formulated dos-

ages of 0.5 mg and 0.25 mg.

36. Acting in concert and with the consent of one

another, and in furtherance of the conspiracy and above

alleged agreement, Defendants Upjohn, William Dement

and DOES 1 through 10 assisted the NPPT/ Worldwide

Halcion Committee to further the conspiracy and to con-

tinue its wrongful purpose, conspiring unlawfully to pre-

vent and working to hinder the submission of full,

complete and uabiased information to the FDA, to mis-

report protocol results, to select biased and favorable

App. 49

investigators, to suppress the dissemination of informa-

tion reasonably disclosing the risks, hazards, and conse-

quences of the usage of Halcion, and to otherwise carry

out an illegal conspiracy and agreement to mislead,

deceive and defraud the FDA, the general public, and the

consumer of the drug Halcion, including Plaintiff herein.

37. Having a duty prescribed by statute and admin-

istrative regulation, said conspirators designed a course

of conduct to delay and/or prevent the dissemination of

reports of adverse consequences, reactions, and experi-

ences with the drug Halcion which would have alerted

the consuming public, the FDA, and the health practi-

tioner, of the true hazards, risks, and dangers of the

specified drug, especially in its 0.5 mg and 0.25 mg tablet

size, and to further prevent and /or delay the disclosure

of information tending in any manner to lessen the size of

the prescribed dosage and/or to decrease the length of

the term and use of Halcion.

38. Said acts were taken for the purpose of eco-

nomic gain, with the expectation of economic reward, for

the purposes of employment and gaining an economic

and competitive advantage over com, eting products with

a similar efficacy but less propensity for untoward expe-

riences, adverse reactions, dangerous side effects, and

having a market experience associated with fewer side

effects compared with the same advantages.

39. In doing the things herein alleged, Defendants,

and each of them, acted willfully and intentionally, know-

ing the significant likelihood of serious injury to a sub-

stantial part of the consuming public. Defendants acted

and carried out their fraud knowing that a reasonable

App. 50

dissemination of the true facts relating to the usage of

Halcion and ‘ts adverse effects would seriously impact

the economic gain and competitive advantage achieved

as a result of the acts performed in furtherance of the

conspiracy.

40. Plaintiff is informed and believes, and there-

upon alleges, that the last overt act in pursuance of the

above described conspiracy has not yet taken place and

that said Defendants continue to conspire, act in concert,

and to join together to achieve the purpose of denying to

the FDA and the consuming public reports of the true

and unbiased facts relating to the usage of Halcion, to the

inadequacies of the warnings, labeling and counseling of

adverse reactions, untoward experiences, dangerous and

life threatening experiences, and unexpected occurrences

relating to the usage of Halcion.

41. Plaintiff had no reasonable means of obtaining

knowledge of the conspiracy and the unity of action

undertaken by said Defendants, and each of them, in the

furtherance of their conspiracy and efforts to conceal,

defraud, and suppress the true facts relating to the usage

of Halcion, and only began a suspicion of said conspiracy,

unity of action, joint purpose, and association sometime

after September/October of 1991.

42. As a proximate and direct result of the above

stated despicable acts by Defendants, and each of them,

Plaintiff has been injured in the manners above stated.

Wherefore, Plaintiff prays for judgement as follows:

App. 51

FIRST CAUSE OF ACTION

Fraud and Intentional Misrepresentation

1. For general and special damages according

to proof.

2. For costs of suit.

3. For reasonable attorney’s fees as deemed

just and proper according to proof.

4. For any Court imposed restrictions which

may be appropriate on future conduct or

activities

5. For damages sufficient in an amount to pun-

ish these Defendants referenced herein and

for damages sufficient to serve as a deter-

rent from the same or similar conduct by

this and other business entities in this or

related fields of economic endeavor.

6. For such other damages and relief that the

Court may deem just and proper, including

pre- and post-judgment interest found

appropriate by the Court.

And for further relief Plaintiff prays:

a SECOND CAUSE OF ACTION

Common Law Civil Conspiracy

1. For general and special damages according

to proof.

2. For costs of suit.

3. For reasonable attorney’s fees as deemed

just and proper according to proof.

App. 52

4. That appropriate general and special dam-

ages, losses, costs and fees be trebled in

accordance with relevant law.

5. For any Court imposed restrictions which

may be appropriate on future conduct or

activities

6. For damages sufficient in an amount to pun-

ish these Defendants referenced herein and

for damages sufficient to serve as a deter-

rent from the same or similar conduct by

this and other business entities in this or

related fields of economic endeavor.

7. For such other damages and relief that the

Court may deem just and proper, including

pre- and post-judgment interest found

appropriate by the Court.

And for further relief Plaintiff prays:

Joe Burris Ritchey Date

App. 53

NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

JOE B. RITCHEY, ) No. 94-15171

Plaintiff-Appellant, D.C. No.

i CV-92-20208-RMW P

UPIOHN. DRUG ' MEMORANDUM*

COMPANY, a Delaware ? (Filed

corporation, June __, 1995)

Defendant-Appellee. )

)

Appeal from the United States District Court

for the Northern District of California

Ronald M. Whyte, District Judge, Presiding

Submitted June 6, 1995**

Before: O’SCANNLAIN, LEAVY, and HAWKINS, Cir-

cuit Judges.

Joe B. Ritchey appeals the district court’s summary

judgment for defendant Upjohn Drug Company

(“Upjohn”) based on the statute of limitations in his

personal injury diversity action. Ritchey alleged that he

* This disposition is not appropriate for publication and

may not be cited to or by the courts of this circuit except as

provided by 9th Cir. R. 36-3.

** The panel unanimously finds this case suitable for

decision without oral argument. Fed. R. App. P. 34(a); 9th Cir. R.

34-4. Accordingly, the parties’ requests for-oral argument are

denied.

App. 54

suffered injury as a result of his ingestion of the prescrip-

tion medication Halcion. We have jurisdiction under 28

U.S.C. § 1291, and we affirm.)

We review de novo the district court's ruling on the

appropriate state statute of limitations. F.D.LC. v.

McSweeney, 976 F.2d 532, 534 (9th Cir. 1992), cert. denied,

113 S. Ct. 2440 (1993). “While resolution of the statute of

limitations issue is normally a question of fact, where the

uncontradicted facts established through discovery are

susceptible of only one legitimate inference, summary

judgment is proper.” Jolly v. Eli Lilly & Co., 44 Cal. 3d

1103, 1112 (1988).

Under California Civil Procedure Code § 340(3), “any

action for personal injuries . . . must be brought within

one year of its accrual.” Ward v. Westinghouse Can. Inc., 32

F.3d 1405, 1407 (9th Cir. 1994). While an action generally

accrues on the date of injury, “under the California

celayed discovery rule, ‘the accrual date of a cause of

action is delayed until the plaintiff is aware of her injury and

iis negligent cause.’ ” Id. (quoting Jolly, 44 Cal. 3d at 1109).

Specifically, “the statute of limitations begins to run when

the plaintiff suspects or should Suspect that her injury

was caused by wrongdoing [and/or] . . . once the plaintiff

has notice or information of circumstances to put a rea-

sonable person on inquiry.” Jolly, 44 Cal. 3d at 1110-11

(internal quotations omitted). Furthermore, “[t]o deter-

mine which statutory period applies, California courts

look to the substance or gravamen of the complaint.”

* Accordingly, Upjohn’s motion to strike is dismissed as

moot.

App. 55

McSweeney, 976 F.2d at 534; see also Hensler v. City of

Glendale, 8 Cal. 4th 1, 22 (1994), cert. denied, 115 S. Ct. 1176

(1995).

Here, Ritchey filed suit on March 10, 1990. The dis-

trict court found that no genuine issue of fact existed as

to when Ritchey became suspicious of wrongdoing

because (1) Ritchey’s criminal appeal, filed on March 3,

1989, noted that “numerous studies have revealed that

Halcion in fact induces delusions and paranoia and

insanity,” (2) Ritchey had called a psychiatrist in August,

1988, and asked if the psychiatrist would “talk to attor-

neys” about research Ritchey had done on Halcion, (3)

Ritchey had sent a letter to his defense attorney dated

November 4, 1988, informing him “that adverse reactions

from Halcion may include ‘inappropriate abnormal and

bizarre behavior,’ ” and (4) Ritchey was sent the results of

a computer search on November 3, 1988, which listed

numerous articles on adverse reactions to Halcion.

Because Ritchey had “notice or information of cir-

cumstances to put a reasonable person on inquiry” over

one year before fiffng this action, the district court cor-

rectly found that Ritchey’s claims were barred by the

statute of limitations. See Jolly, 44 Cal. 3d at 1110-11. In

addition, the district court correctly applied California’s

one year statute of limitations because personal injury

was the “gravamen” of Kitchey’s complaint. See

McSweeney, 976 F.2d at 534.

AFFIRMED

App. 56

ATTORNEY OR PARTY WITHC JT ATTORNEY

(NAME AND ADDRESS): TELEPHONE:

JOE B. RITCHEY

600 Riverside Avenue

Santa Cruz, CA 95060

ATTORNEY FOR (NAME): Plaintiff In Pro Per

FOR COURT USE ONLY

(Filed Mar. 12, 1990)

RICHARD W. BEDAL, Clerk

By /s/ Illegible

Deputy

SANTA CRUZ COUNTY

Insert name of court, judicial district or branch court, if

any, and post office and street address:

SUPERIOR COURT OF SANTA CRUZ COUNTY

701 Ocean Street, Room 110

Santa Cruz, CA 95060

PLAINTIFF:

JOE B. RITCHEY

DEFENDANT:

UPJOHN COMPANY

[X] DOES 1 TO 10

COMPLAINT - Personal Injury, Property Damage,

Wrongful Death

App. 57

[ ] MOTOR VEHICLE [X] OTHER (specify): Prod-

ucts Liability

[X] Property Damage [ ] Wrongful Death

[X] Personal Injury [X] Other Damages (spec-

ify): As Alleged

CASE NUMBER:

113198

1. This pleading, including attachments and exhibits,

consists of the following number of pages: 4

2. a. Each plaintiff named above is a competent adult

[ ] Except plaintiff (name):

[ ] a corporation qualified to do business

in California

{ ] an unincorporated entity (describe):

[ ] a public entity (describe):

{ ] a minor { }. anadult -

[ ] for whom a gua dian or conserva-

tor of the es*-te or a guardian ad

litem has been appointed

{ ] other (specify):

{ ] other (specify):

[ ] Except plaintiff (name):

[ ] a corporation qualified to do business

in California

{ ] an unincorporated entity (describe):

[ ] a public entity (describe):

3.

c.

a.

[ ]

[ ]

App. 58

{ ] a minor [ ] an adult

[ ] for whom a guardian or conserva-

tor of the estate or a guardian ad

litem has been appointed

{ ] other (specify):

{ ] other (specify):

Plaintiff (name):

is doing business under the fictitious name

of (specify):

and has complied with the fictitious business

name laws.

Information about additional plaintiffs who

are not competent adults is shown in Com-

plaint-Attachment 2c.

Each defendant named above is a natural person

[X]

Except defendant (name):

UPJOHN COMPANY

[ ] a business organization, form unknown

{ ] a corporation

[ ] an unincorporated entity (describe):

[ ] a public entity (describe):

[X] other (specify): Believed to be

a Michigan Corporation

a

[ ]

[ ]

App. 59

Except defendant (name):

[ ] a business organization, form unknown

[ ] a corporation

[ ] an unincorporated entity (describe):

[ ] a public entity (describe):

[ ] other (specify):

Except defendant (name):

[ ] a business organization, form unknown

{ ] a corporation

[ ] an unincorporated entity (describe):

[ ] a public entity (describe):

[ ] other (specify):

Except defendant (name):

[ ] a business organization, form unknown

[ ] a corporation

{ ] an unincorporated entity (describe):

[ ] a public entity (describe):

{ ] other (specify):

The true names and capacities of defendants sued

as Does are unknown to plaintiff.

[ ] Information about additional defendants

[ ]

who are not natural persons is contained in

Complaint-Attachment 3c.

Defendants who are joined pursuant to

Code of Civil Procedure section 382 are

(names):

=

This

@

[ ]

[X]

[X]

[ ]

[ ]

App. 60

Plaintiff is required to comply with a claims

statute, and

a. [ ] plaintiff has complied with applicable

claims statutes, or

b. [ ] plaintiff is excused from complying

because (specify):

court is the proper court because

at least one defendant now resides in its jurisdic-

tional area.

the principal place of business of a corporation

or unincorporated association is im its jurisdic-

tional area.

injury to person or damage to personal property

occurred in its jurisdictional area.

other (specify): Plaintiff used defendant's medi-

cal product in Santa Cruz and that product was

sold and marketed there.

The following paragraphs of this complaint are

alleged on information and belief (specify para-

graph numbers):

The damages claimed for wrongful death and

the relationships of plaintiff to the deceased are

[ ] listed in Complaint-Attachment 7

[ ] as follows:

Plaintiff has suffered

[X]

[X]

[ J

wage loss [X] loss of use of property

hospital and

medical expenses [X] general damage

property damage [X] loss of earning capacity

PT a a TO Oo

10.

11.

App. 61

[X] other damage (specify): Wrongful resulting crimi-

nal prosecution and conviction due to drug-

induced behaviour on account of Upjohn’s

defective medicine. Wrongful resulting depriva-

tion and loss of his profession as an attorney at

law due to drug-induced behaviour on account

of Upjohn’s defective medicine.

Relief sought in this complaint is within the jurisdic-

tion of this court.

PLAINTIFF PRAYS

For ‘udgment for costs of suit; for such relief as is fair,

just, and equitable; and for

[X] compensatory damages in an amount of at least

$500,000 and

[X] (Superior Court) according to proof.

[ ] (Municipal and Justice Court) in the

amount of $

{ ] other (specify):

The following causes of action are attached and the

statements above apply to each: (Each complaint must

have one or more causes of action attached.)

{ ] Motor Vehicle

{ ] General Negligence

[ ] Intentional Tort

[X] Products Liability

{ ] Premises Liability

[X] Other (specify): reserved at this time.

App. 62

Dated: March 9, 1990

Joe B. Ritchey /s/ Joe B. Ritchey

(Type or print name) (Signature of plaintiff

or attorney)

ATTACHMENT TO [X] Complaint

{ }] Cross-Complaint

(Use a separate cause of action form for each cause of action.)

Plaintiff (name): Joe B. Ritchey

Prod.L-1. On or about (date): A date within one year past

plaintiff was injured by the

following product: A sleep-

ing pill made and marketed

by defendant under the

brand name HALCION.

Prod.L-2. Each of the defendants knew the product

would be purchased and used without inspec-

tion for defects. The product was defective

when it left the control of each defendant. The

product at the time of injury was being

[X] used in the manner intended by the

defendants.

[X] used in a manner that was reasonably

foreseeable by defendants as involving a

substantial danger not readily apparent.

Adequate warnings of the danger were

not given.

Prod.L-3. Plaintiff was a

[X] purchaser of the product.

[ ] bystander to the use of the product.

App. 63

[X] user of the product.

[X] other (specify): As prescribed by his phy-

sician

PLAINTIFF’S INJURY WAS THE LEGAL (PROXIMATE)

RESULT OF THE FOLLOWING:

Prod.L-4. [X] Count One - Strict liability of the fol-

lowing defendants who

a. [X] manufactured or assembled the

product (name): Upjohn Com-

pany

[X] Does 1 to 10

b. [X] designed and manufactured

component parts supplied to

the manufacturer (names):

Upjohn Company

[X] Does 1 to 10

c. [X] sold the product to the public

(names): Upjohn Company

[X] Does 1 to 10

Prod.L-5. [X] Count Two - Negligence of the follow-

ing defendants who owed a duty to

plaintiff (names): Upjohn Company

[X] Does 1 to 10

Prod.L-6. [X] Count Three - Breach of warranty by

the following defendants (names):

Upjohn Company

[X] Does 1 to 10

a. [X] who breached an implied war-

ranty

App. 64

b. [X] who breached an express war-

ranty which was

[X] written [ | oral

Prod.L.7. [X] The defendants who are liable to plain-

tiffs for other reasons and the reasons for

the liability are

[ ] listed in Attachment-Prod.L-7

[X] as follows: Unknown at this time.

App. 65

TRANSCRIPT OF __

* * *

[p. 2] FRIDAY, MAY3, 1996

THE CLERK: CALLING CASE C-96-20067, JOE

RITCHEY VERSUS THE UPJOHN DRUG COMPANY, ON

FOR DEFENDANT’S MOTION TO DISMISS FOR FAIL-

URE TO STATE A CLAIM OR, IN THE ALTERNATIVE,

SUMMARY JUDGMENT, AND PLAINTIFF’S MOTION

TO REMAND.

MR. HEALY: GOOD MORNING YOUR

HONOR. MICHAEL HEALY FOR THE UPJOHN COM-

PANY WITH ANNETTE HUGHES.

MS. EWERT: ELIZABETH EWERT ON BEHALF

OF DEMENT AND HEALTH CARE SERVICES.

MR. RITCHEY: AND JOE RITCHEY, OF

COURSE, FOR HIMSELF. GOOD MORNING.

THE COURT: BASICALLY I THINK THIS CASE

PRESENTS ONE ISSUE THAT'S DIFFICULT, AND THAT

IS WHAT THE LAST CLAUSE IN 1446(B) MEANS, AND

OBVIOUSLY THERE ARE CASES GOING BOTH WAYS

WITH THE MAJORITY OF THE CASES GOING IN

FAVOR OF MR. RITCHEY’S POSITION.

HOWEVER, I MUST SAY THAT I FIND THE REA-

SONING OF THE ZOGBI CASE, AND I RECOGNIZE

THAT THERE’S EVEN A CASE IN THAT DISTRICT

LATER THAN ZOGBI THAT GOES THE OTHER WAY,

MORE PERSUASIVE BECAUSE IT SEEMS TO ME THAT

READING IT THE WAY THAT A NUMBER OF CASES

App. 66

HAVE DONE, INCLUDING A COUPLE FROM THIS DIS-

TRICT, REALLY IS JUST NONSENSICAL.

FRANKLY, AND I MIGHT AS WELL BE TOTALLY

UP FRONT WITH YOU MR. RITCHEY, I JUST, WHILE

THIS CASE GOES FORWARD IN STATE COURT, I JUST

DON’T THINK THERE’S A CHANCE THAT IT’S GOING

{[p. 3] TO GO FORWARD HERE. THE STATUTE OF LIM-

ITATIONS WAS DETERMINED AGAINST YOU AND

WENT UP ON APPEAL AND YOU LOST.

THAT’S NOT A DETERMINATION ON THE MERITS

OF THE CASE, BUT IT IS A DETERMINATION OF THE

STATUTE, AND ONCE YOU SUSPECT THAT YOU

HAVE A CLAIM BASED ON THE INGESTION OF

HALCION, I THINK IT’S CLEAR THAT THE STATUTE

STARTS RUNNING AS AGAINST ALL DEFENDANTS.

I JUST THINK, UNFORTUNATELY FROM YOUR

STANDPOINT, YOU’RE OUT OF LUCK, BUT I’LL

BRIEFLY HEAR COMMENT.

MR. RITCHEY: THANK YOU, YOUR HONOR.

SINCE PRESIDENT REAGAN, IN 1988, APPROVED

THE LEGISLATURE AMENDING 1446 (B) RESTORING

TO THE STATE SOME OF THEIR RIGHTS IN DIVERSITY

CASES TO APPLY THEIR OWN LAWS, NINE OF THE

ELEVEN CIRCUITS HAVE REJECTED THE REASONING

AND THE RESULT OF ZOGBI.

THE COURT: IT’S NOT REALLY NINE OF

ELEVEN CIRCUITS. IT’S DISTRICT COURTS WITHIN

THE CIRCUITS. I'M NOT AWARE OF ANY CIRCUIT

CASE. ARE THERE -

App. 67

MR. RITCHEY: THERE IS NO CIRCUIT COURT

OF APPEAL CASE.

THE COURT: THAT’S WHAT I MEAN.

MR. RITCHEY: BUT THE ONLY ONES THAT

HAVE CONSIDERED THE ISSUE IN DICTA HAVE

REJECTED THE REASONING OF ZOGBI. THOSE CASES

ARE CITED IN MY CLOSING BRIEF.

THE COURT: IS THERE AN APPELLATE

CASE?

App. 68

In Pro Per

Joe B. Ritchey - Bar No. 52130

1088 La Madrona Drive

Santa Cruz, CA 95060

(408) 426-6863

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

JOE. B. RITCHEY, )

Plaintiff,

v. ) NO. C 96 20067 RMW

UPJOHN DRUG )

blag Bs WILLIAM. _)._NOTICE OF INTENT TO

HaRUNTY och TiChe ) FILE PETITION FOR

1 anecuigh 10 ) REMAND, NOTICE THAT

' ) CONSENT TO REMAND

) WAS REQUESTED AND

) REFUSED, and NOTICE

) OF REQUEST FOR

) SANCTIONS

Defendants.

To Defendants Upjohn and Dement and their attor-

neys of record:

PLEASE TAKE NOTICE that Plaintiff is preparing a

Petition for Remand based upon:

1. Failure of Defendants to remove within one year

of commencement of action; see 28 USC § 1446(b) as

interpreted by Hom v. Secure Merchandise Company, 727 F.

Supp. 343 (ND Cal. 1990) and Perez v. General Packer, 790

F. Supp. 1464 (CD Cal. 1992).

2. Defendant Dement is not a fraudulently joined

defendant because Plaintiff can state a colorable claim

App. 69

under state law against Dement, and claims against

Dement are not barred by Res Judicata —- Hawkins v.

Upjohn, Dement et al., 890 F. Supp. 606 (Texas 1994)

upholding State conspiracy fraud claims against Upjohn;

and Koch v. Rodlin, 223 Cal App. 3d (1990) 1591.

3. The lack of Diversity Jurisdiction

4. Two of the three California served defendants

failed to join in Upjohn’s Notice of Removal (see Proofs

of Service — stapled hereto — for Stanford Sleep Research

Center and Stanford Health Services.)

Attached hereto, as Exhibit 1, and incorporated

herein is a copy of the Complaint filed in Hawkins v.

Upjohn which summarizes some of the acts of William

Dement in the alleged conspiracy. PLAINTIFF WILL

HAVE HIS PETITION FOR REMAND ON FILE WITHIN

30 DAYS FROM JANUARY 239, 1996.

AS ADDITIONAL SUPPORT for Plaintiff’s conten-

tion that a colorable cause of action may be stated against

Upjohn and Dement for Conspiracy to Commit Fraud and

Fraud, and that the action is not barred by Res Judicata or

Collateral Estoppel, Plaintiff attaches hereto:

2. Copy of document entitled “Protocol 6048: A Fal-

sified Study”.

3. Copy of a paper entitled “A Story of Halcion”.

4. Copy of Food and Drug Administration investi-

gation of “The Upjohn Company.”

5. Copy of working paper presented by Shook,

Hardy and Bacon, herein co-counsel for Upjohn, entitled

“Legal Liability in the Pharmaceutical Industry.” Shook,

App. 70

Hardy and Bacon advises: (1) that clients, including the

Upjohn Drug Company, “clean their house” before allow-

ing Plaintiff’s attorneys to conduct discovery; (2) recom-

mends their clients institute policies of “no minutes

required” for meetings where adverse effects of phar-

maceutical products and disclosure of same are dis-

cussed; (3) that pharmaceutical companies “follow the

same philosophy that Al Capone followed, and if Geraldo

kicks in your vault on national T.V., be sure that all he

finds is a bunch of dusty junk, nothing that is going to

embarrass you or your company, just old Geraldo;” (4)

Shook, Hardy, et al. advises drug companies to every so

often purge their work product and records, and that

“documents don’t only come from paper; they also come

from computer tapes, voice mail and E-mail. Employees

need to understand that a violation of a document reten-

tion policy is every bit as serious a violation of other

important company policies;” and (5) recommends that

drug companies conduct “scorchingly thorough” searches

of company documents to “insure the paper trail repre-

sents the company’s dedication to the safety of the prod-

uct” and if it does not, advises the companies to create

documents after the fact.

6. Acopy of a memo dated August 23, 1991 indicat-

ing that “the Upjohn Company” was aware that settle-

ment of litigation concerning injuries caused by Halcion,

which required that Plaintiff’s counsel return to Upjohn

all documents obtained during discovery would limit and

hinder investigation of drug safety by governmental

agencies since they would “probably not get all of the

information because of the Grunberg case settlement”

and that the Upjohn Company needed to address “some

App. 71

real concerns about the so-called falsified and fraudu-

lently misrepresented, concealed and omitted data in sub-

missions to the FDA” and that thie Upjohn Drug

Company was aware of “some manipulation of data by

one of our people and about the involvement of this

individual in other product submissions.”

7. An Affidavit by a Charles R. Arledge, stating, in

part, his awareness of Upjohn’s knowledge concerning

falsification of research data and his awareness of

Upjohn’s willingness to pay large sums of cash therein

reported as $150,000.00, to silence participants who expe-

rienced serious adverse side effects during early Upjohn

Halcion pre-market studies.

8. “Confidential Memo” dated June 17, 1988 evi-

dencing Upjohn’s awareness that information provided to

governmental regulating bodies concerning Halcion was

incomplete and inconsistent with the company’s true data

concerning Halcion, and, that as a result, the company

was presenting a false impression that Halcion had a

lower incidence of serious side effects than what full

disclosure and truthful disclosure would otherwise pre-

sent.

9. Copy of FDA working paper concluding that fre-

quency of consumer experiences of violent and hostile

adverse reaction effects of Halcion was alarmingly higher

than what should be the frequency if Upjohn’s data sub-

mitted for approval of Halcion had accurately measured

the same.

10. Copy of FDA report concluding that adverse

reactions to Triazolam (Halcion) were being experienced

by the consuming public at a much higher frequency and

App. 72

intensity than the medication Ritchey had been taking

prior to switching to Halcion.

Sanctions are requested against Upjohn and Dement

for their intentional and deceptive failure to inform this

court of Plaintiff's opposition to their Removal and

Request for Dismissal. Defendants have attempted to

induce this court into error by representing that Plaintiff

had not expressed any intent to oppose their Removal,

Request for Dismissal and/or Summary Judgment. (See

copies of letters to each attached hereto.) Petition for

Remand within 30 days from 29 January 1996 is opposition

to Removal and all Defendant's requested motions.

Plaintiff requests sanctions against each defendant in

the amount of $1,000.00 and informs the court that Sedg-

wick, Detert, Moran, et al. have previously been sanc-

tioned by a California Superior Court in the amount of

$1,000.00 for said law firm’s actions in representing

Upjohn in the case of Leo and Phyllis Norgart v. Upjohn, et

al., Case no. 193265 filed in the Superior Court of Califor-

nia, County of Sonoma.

Respectfully submitted,

Dated:

Joe Ritchey

App. 73

PROOF OF SERVICE BY MAIL

STATE OF CALIFORNIA, COUNTY OF SANTA CRUZ

I am employed in the County of Santa Cruz, Califor-

nia. I am over the age of eighteen years and not a party to

the within action; my business address is 1088 La Mad-

rona Drive, Santa Cruz, California 95060. On February 20,

1996, I served the following document:

NOTICE OF INTENT TO FILE PETITION FOR

REMAND, NOTICE THAT CONSENT TO

REMAND WAS REQUESTED AND REFUSED,

AND NOTICE OF REQUEST FOR SANC-

TIONS (AND REFERENCED ATTACHMENTS

AND EXHIBITS)

by placing a true copy thereof, enclosed in a sealed

envelope with postage thereon fully prepaid, in the

United States mail at Santa Cruz, California addressed as

follows:

Mr. Michael F. Healy

Sedgwick, Detert, et al.

One Embarcadero Center, 17th FI.

San Francisco, CA 94111-3765

Charles Preuss

Elizabeth Ewert

Preuss Walker & Chanagher

595 Market Street, # 1600

San Francisco, CA 94102

I declare under penalty of perjury under the laws of

the State of California that the above is true and correct

and that this declaration was executed on February 20,

1996, at County of Santa Cruz, California.

Sue Casey

In Pro Per

Joe B. Ritchey

1088 La Madrona Drive

Santa Cruz, CA 95060

(408) 426-6863

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

JOE. B. RITCHEY,

Plaintiff,

v.

UPJOHN DRUG

COMPANY, William

Dement and DOES

1 through 10,

Defendants.

NO. C 96 20067 RMW

DECLARATION OF JOE

RITCHEY IN SUPPORT OF

PETITION FOR REMAND

Date: May 3, 1996

Time: 9:00 a.m.

Courtroom:

Honorable R. Whyte

me mee eee ee ee eee eee

I, Joe Ritchey, state under penalty of perjury the

following is true and correct:

Attached to my “Notice of Intent to Petition for

Remand” are exhibits numbered 1 through 10. I did not

know of nor suspect their existence prior to after sum-

mary judgement had been entered in Ritchey v. Upjohn C

92-20208 RMW. Prior to Upjohn’s summary judgment I

had no suspicion of the existence of any conspirators

outside the employment of Upjohn. The Order of Bifurca-

tion and the narrow limiting of issues before the court as

a result of Upjohn’s actions and the pervasive nature and

effectiveness of the conspiracy to prevent discovery of

App. 75

evidence, combined, foreclosed discovery of and suspi-

cion of the frauds and conspiracies here at issue.

Attached to this declaration is Exhibit 12 (this exhibit

is numbered consecutive starting with the exhibits

attached to my Notice of Intent to Petition for Remand).

This exhibit is a true and correct copy of an order entered

by the court in Scovish v. The Upjohn Company, CV-93

0526520S Superior Court of the Judicial District of New

London, Connecticut. This order was entered November

22, 1995. While the order “speaks for itself” it, amongst

other things, states that, due to the nature of the litigation

against Upjohn, no private litigant has a fair chance to

conduct discovery against Upjohn “because of the astro-

nomical number of documents involved in this case.”

Upjohn had therein contended that just the index and

summary of documents “would number more than

100,000 pages.”

In order to remove from that litigation some of the

undue and unsurmountable hardship a plaintiff would

face in shifting through “a warehouse” of unorganized

documents (declarant has been advised by Upjohn that

Halcion-related documents exceed four million pages) the

court ordered that Shook Hardy and Bacon produce a

copy of the index and data base compiled by them and

Upjohn in their review of the Halcion-related documents.

The court in Scovish v. The Upjohn Company ordered

release of said index and data base without having

knowledge of the frauds and conspiracies of the Upjohn

Company and Shook Hardy and Bacon to secrete and

destroy relevant evidence as documented in Exhibits 1, 5

App. 76

and 7 of those exhibits attached to my Notice of Intent to

Petition for Remand.

Date Joe Ritchey