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Media Alerts - A.S. v. SmithKline Beecham Corp. - Third Circuit
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October 13, 2014
  A.S. v. SmithKline Beecham Corp. - Third Circuit
Headline: Third Circuit Holds Re-Removal Based on Diversity Jurisdiction One Year After Case Commenced was Untimely: Orders Remand Back to State Court

Area of Law: Civil Procedure

Issue Presented: Whether a defendant may remove a case a second time based on diversity jurisdiction more than one year after the commencement of the case.

Brief Summary: A.S. and Sallee Miller ("Plaintiffs") filed suit in Pennsylvania state court against GlaxoSmithKline LLC ("GSK") claiming that its drug, Paxil, caused birth defects. GSK removed the case to the United States District Court for the Eastern District of Pennsylvania. The District Court remanded the case, finding that GSK was a citizen of Pennsylvania and therefore ineligible to remove the case. After remand, the Third Circuit decided Johnson v. SmithKline Beecham Corp., 724 F.3d 337 (3d Cir. 2013), in which the Third Circuit held that GSK was a citizen of Delaware. Within thirty days of Johnson, GSK re-removed the case. This time, the District Court denied Plaintiffs' motion to remand and certified its order for interlocutory review pursuant to 28 U.S.C. § 1292(b) to allow this Court to determine the propriety of re-removal. The Third Circuit held the second removal was untimely, reversed the order denying Plaintiffs' remand, and directed the District Court to remand this case back to state court.

Extended Summary: On September 30, 2011, A.S., who suffers from a congenital birth defect, and his mother, Sallee Miller, who ingested Paxil while pregnant, filed suit in Philadelphia County Court of Common Pleas against SmithKline Beecham Corp. d/b/a GlaxoSmithKline LLC ("GSK") claiming that its drug, Paxil, caused birth defects. The complaint alleged that all parties were citizens of Pennsylvania. GSK removed the case within thirty days of receipt of the complaint based upon diversity. On Plaintiffs' motion, the case was consolidated with a number of other Paxil cases before a district court judge who had previously held that GSK was a citizen of Pennsylvania. Consistent with that holding, the District Court remanded this case along with the other consolidated cases to state court, holding that GSK was a citizen of Pennsylvania and could not remove a case from Pennsylvania state court to federal court. Patton ex rel. Daniels-Patton v. SmithKline Beecham Corp. The same judge also issued an opinion identical to Patton in Maldonado ex rel. Maldonado v. SmithKline Beecham Corp., which remanded twenty-one other Paxil cases to state court. This case returned to state court on January 4, 2012.

On June 7, 2013, the Third Circuit issued Johnson, which held that GSK was a citizen of Delaware. In reaching that holding, this Court explicitly rejected the reasoning in Patton and Maldonado. Less than thirty days after the Johnson decision, GSK filed a second notice of removal in this case and in eight other cases with the same procedural posture. Guddeck v. SmithKline Beecham Corp. was the first case holding that removal to federal court was proper. In Guddeck, the District Court noted that there was "no dispute that the parties are of diverse citizenship" after Johnson, that the amount-in-controversy requirement was satisfied, and that GSK was not an in-state defendant. Guddeck also held that Johnson established that the case was "erroneously remanded" after the first removal, Johnson "provided a new and different ground for a second notice of removal," and GSK's second "removal notice [was] simply effectuating what was a timely and proper first removal." The District Court in this present case adopted Guddeck's reasoning and denied Plaintiffs' motion to remand.

After the District Court denied remand to state court, this case was transferred to the Middle District of Pennsylvania, where Plaintiffs filed a motion to certify for interlocutory appeal the following question: whether a defendant may remove a case a second time based on diversity jurisdiction more than one year after the commencement of the case? The District Court certified the question for appeal, which the Third Circuit accepted pursuant to 28 U.S.C. § 1292(b). The Third Circuit held that GSK's re-removal to federal court was prohibited by § 1446(b) and remand to the state court was required. The Third Circuit explained the second removal was untimely, and reversed the order denying remand, directing the District Court remand this case to state court.

First, the Third Circuit ruled that GSK did not comply with the first paragraph of § 1446(b) because GSK's second removal occurred more than thirty days after its receipt of the initial pleading. GSK argued that § 1446(b)'s first paragraph does not bar its second removal because it does "not impose any time limits on successive removals." However, the Third Circuit noted that while the first paragraph does not explicitly mention successive removals, it does expressly forbid untimely removals. Here, the relevant notice of removal was untimely: it was filed over a year and a half after GSK was served with the initial pleading, namely the state court complaint. Therefore, GSK could not remove under the first paragraph of § 1446(b).

Next, the Third Circuit ruled that the second paragraph did not relieve GSK of the first paragraph's bar. The Third Circuit explained that the second paragraph is an exception to the thirty-day time limit in the first paragraph and sets a separate thirty-day time limit that applies when: (1) "the case stated by the initial pleading is not removable" and (2) the defendant receives "an amended pleading, motion, order or other paper" (3) from which "it may first be ascertained that the case is one which is or has become removable." In diversity cases, the second paragraph has a fourth requirement: removal may not occur "more than 1 year after the commencement of the action."

The Third Circuit ruled GSK could not rely on the second paragraph because there was no "amended pleading, motion, order or other paper" to trigger its thirty-day time limit. In general, the terms "amended pleading, motion, order or other paper" only "address[] developments within a case" and, therefore, court decisions in different cases do not count as an "order." The Third Circuit also ruled that GSK was not entitled to equitable tolling.

Lastly, the Third Circuit ruled GSK's second notice of removal could not relate back to the first notice of removal. The Third Circuit explained that any relation back in this case must be justified under a court's equitable powers. The Third Circuit explained that neither the fact that a particular judge was assigned to the case or the error in remanding the case provided a basis for equitable relief. The Third Circuit also explained that the second notice of removal does not relate back to the first notice of removal because nothing was pending in the federal court to which the second notice could relate. A copy of the Court's opinion can be found here:

Panel (if known): Smith, Shwartz, Roth Circuit Judges

Argument Date: September 10, 2014

Date of Issued Opinion: October 9, 2014

Docket Number: No. 14-1229

Decided: Reversed and directed District Court to remand to state court

Case Alert Author: Katie Cooper Davis

Counsel: Howard J. Bashman, Esq. for the Appellants, A.S., a Minor, by Sallie Miller, Guardian, and Sallie Miller, Individually; and for Appellee SmithKline Beecham Corp d/b/a GlaxoSmithKline, Lisa S. Blatt, Esq., Andrew T. Bayman, Esq., Jeffrey S. Bucholtz, Esq., Joseph E. O'Neil, Esq.

Author of Opinion: Judge Shwartz

Circuit: Third Circuit

Case Alert Supervisor: Professor Mary E. Levy

    Posted By: Susan DeJarnatt @ 10/13/2014 02:49 PM     3rd Circuit  

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