DAVID R. HERNDON, District Judge.
Before the Court is plaintiffs' Second Motion to Remand, or in the alternative, Shorten the Briefing Schedule (Doc. 11); defendants' Motion to Dismiss for Lack of Personal Jurisdiction (Doc. 14), and Motion to Dismiss for Insufficient Service of Process (Doc. 16). Based on the following, the Motion to Remand (Doc. 11) is
On July 19, 2017, defendants filed a Second Notice of Removal (Doc. 1) pursuant to 28 U.S.C. §§ 1332, 1441, and 1446, removing the above-styled action from the Circuit Court of Madison County, Illinois
Defendants draw attention to the recent Supreme Court ruling in Bristol-Meyers Squibb Co. v. Super. Ct. of Cal., S.F. Cty., 137 S.Ct. 1773 (2017) ("BMS") which established state courts lack specific jurisdiction to entertain non-resident plaintiff claims
In reaction, plaintiffs' filed the instant Second Motion to Remand, or in the alternative, Shorten the Briefing Schedule (Doc. 11). Plaintiffs argue defendants' Notice of Removal is untimely, considering no qualifying event occurred within 30-days prior to filing which would initiate the 30-day removal window (Id.) Moreover, plaintiffs contend grounds for removal fail due to lack of personal jurisdiction, and respectfully request the Court remand the case to the Third Judicial Circuit, Madison County, IL (Id.).
On July 26, 2017, this Court entered an order directing defendants' response to focus on "whether the Court, assuming it does not have subject matter jurisdiction, has the authority to rule on the question of personal jurisdiction" (Doc. 13). In response defendants explain, inter alia, under Ruhrgas AG, there is no hierarchy regarding district court inquiry into jurisdiction; and, circumstances exist—such as overriding concerns of judicial economy and restraint—where priority should be given to personal jurisdiction over subject-matter jurisdiction
Subsequently, defendants Janssen Research & Development, LLC, Janssen Pharmaceuticals, Inc., and Janssen Ortho LLC ("Janssen defendants"), exclusively, filed a Motion to Dismiss claims of non-Illinois plaintiffs for lack of personal jurisdiction
Simultaneously, defendants Bayer HealthCare Pharmaceuticals Inc., Bayer Corporation, and Bayer HealthCare LLC ("Bayer defendants"), exclusively, filed a Motion to Dismiss for Insufficient Service of Process and Joinder to Motion to Dismiss based on lack of Personal Jurisdiction (Doc. 16).
In response, plaintiffs characterize defendants' improper service argument as meritless (Doc. 23 at 8-9). Plaintiffs point out: (1) defendants' agent was properly served on March 29, 2017 (Doc. 23, 23-1); (2) defendants suffered no prejudice; and (3) the lack of diligence argument in failing to properly serve did not mesh with the fact that parties have been engaged in lengthy federal court motions practice (Doc. 23 at 9-10). Plaintiffs request denial of defendants' Motion to Dismiss for Insufficient Service, and further insist the Court remand the action to state court (Id.).
The Court shall determine: (1) whether precedence should be given to personal jurisdiction over subject-matter jurisdiction in ruling on plaintiffs' Motion to Remand; (2) whether the Court possesses personal jurisdiction over defendants; and if claims remain, (3) whether defendants' Notice of Removal is untimely under section 1446; and, (4) whether plaintiffs' claims should be dismissed for insufficient service of process regarding Bayer defendants.
"Customarily, a federal court first resolves doubts about its jurisdiction over the subject matter, but there are circumstances in which a district court appropriately accords priority to a personal jurisdiction inquiry." Ruhrgas AG, at 578. Although inquiries into subject-matter jurisdiction must be undertaken sua sponte, see FED. R. CIV. P. 12(h)(3) (if court determines at any time it lacks subject-matter jurisdiction it must dismiss the action), it does not necessarily mean subject-matter jurisdiction is perpetually more significant than personal jurisdiction. See Advanced Tactical Ordnance Sys., LLC, v. Real Action Paintball, Inc., 751 F.3d 796, 800 (7th Cir. 2014) (citing Ruhrgas AG at 584, and explaining district court is entitled to entertain threshold personal jurisdiction inquiry at outset of case); see also Vt. Agency of Nat. Res. v. United States ex rel. Stevens, 529 U.S. 765, 779 (2000) (stating without personal jurisdiction court is powerless to proceed to adjudication); Philos Tech., Inc., v. Philos & D, Inc., 645 F.3d 851, 855 (7th Cir. 2011) ("A court `without personal jurisdiction of the defendant' is wholly `without power to proceed to an adjudication' binding on that defendant, regardless of the specific reason such jurisdiction is lacking.").
Consequently, district courts "do not overstep Article III limits when [ ] declin[ing] jurisdiction of state-law claims on discretionary grounds without determining whether those claims fall within their pendent jurisdiction . . . without deciding whether the parties present a case or controversy." Ruhrgas AG, at 585. Where a straightforward personal jurisdiction issue presenting no complex question of state law is pending before the Court—and the dispute over subject-matter jurisdiction is problematic—"the [C]ourt does not abuse its discretion by turning directly to personal jurisdiction." See id., at 588 (emphasis added).
"[I]n most instances subject-matter jurisdiction will involve no arduous inquiry." Id. at 587. However, if the dispute presents "a difficult and novel" subject-matter jurisdiction analysis, a court does not abuse its discretion in addressing a "straightforward" personal jurisdiction inquiry, free from complex questions of state law. See id. at 588.
In this case, plaintiffs argue a subject-matter jurisdiction analysis would neither be difficult nor novel, considering parties are non-diverse and defendants' personal jurisdiction argument is grounded on the concept of "fraudulent misjoinder." See, e.g., Davidson v. Bristol-Myers Squibb Co., No. 12-58-GPM, 2012 WL 1253165, at *3 (S.D. Ill. Apr. 13, 2012) (stating neither Seventh Circuit or U.S. Supreme Court had occasion to pass on doctrine of fraudulent misjoinder). In contrast, plaintiffs contend a personal jurisdiction inquiry is much more complex, requiring a pervasive legal and factual investigation into defendants' business contacts and activities relating to Illinois.
On the other hand, defendants argue several courts that utilized the BMS holding have conclusively held personal jurisdiction—instead of subject-matter jurisdiction—is the "more straightforward inquiry." See Jinright v. Johnson & Johnson, No. 14:17-CV-01849 ERW, 2017 WL 3731317 (E.D. Mo. Aug. 30, 2017); Covington v. Janssen Pharm., Inc., No. 4:17-CV-1588 SNLJ, 2017 WL 3433611 (E.D. Mo. Aug. 10, 2017); Gallardo v. Johnson & Johnson, No. 4:17-CV-1601 SNLJ, 2017 WL 3128911 (E.D. Mo. July 24, 2017) (explaining court chose to address personal jurisdiction before subject matter jurisdiction because personal jurisdiction was much easier to decide); Jordan v. Bayer Corp., No. 4:17-CV-865 CEJ, 2017 WL 3006993 (E.D. Mo. July 14, 2017); Siegfried v. Boehringer Ingelheim Pharm., Inc., No. 4:16-CV-1942 CDP, 2017 WL 2778107 (E.D. Mo. June 27, 2017).
Based on the above recent legal decisions combined with lack of "unyielding jurisdictional hierarchy," interests of judicial economy, and weight of the precautionary effect on ruling on an issue that could regress and bind the state court, see Ruhrgas AG, at 587, the Court finds that in this matter personal jurisdiction is the more straightforward inquiry —and will analyze the same before addressing challenges to subject-matter jurisdiction.
"A federal district court sitting in diversity must apply the personal jurisdiction rules of the state in which it sits." Kipp v. Ski Enter. Corp. of Wis., Inc., 783 F.3d 695, 697 (7th Cir. 2015). "Personal jurisdiction can be either general or specific, depending on the extent of the defendant's contacts with the forum state." See uBid, Inc., v. GoDaddy Group, Inc., 623 F.3d 421, 425 (7th Cir. 2010). Under general personal jurisdiction, the Court "may exercise personal jurisdiction over defendants even in cases that do not arise out of and are not related to the defendant's forum contacts" when defendants possess "continuous and systematic" contacts with Illinois—if said contacts exist. See Hyatt Intern. Corp. v. Coco, 302 F.3d 707, 713 (7th Cir. 2002). As relevant, corporations are subject to general personal jurisdiction in forums where they are incorporated, and where their principle place of business is located. See Daimler AG v. Bauman, 134 S.Ct. 746, 754 (2014). Therefore, Illinois does not have general personal jurisdiction over defendants in this matter because no defendant is incorporated in Illinois, nor has its principle place of business in Illinois.
In exercising specific personal jurisdiction, defendants' contacts with Illinois must be directly related to the challenged conduct. See N. Grain Mktg., LLC v. Greving, 743 F.3d 487, 492 (7th Cir. 2014) (citing Tamburo v. Dworkin, 601 F.3d 693, 702 (7th Cir. 2010).
Plaintiffs' argue both Illinois state court and this Court—under diversity jurisdiction—have specific personal jurisdiction over resident and non-resident plaintiff claims. Cf. Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 783 (7th Cir. 2003) ("plaintiff bears the burden of demonstrating the existence of jurisdiction."). Plaintiffs allege defendants purposefully targeted Illinois as the location for multiple clinical trials which formed the foundation for defendants' Xarelto Food and Drug Administration application. Furthermore, plaintiffs rationalize pharmaceutical clinical testing within Illinois has previously been recognized by other courts as a basis for granting personal jurisdiction over non-Illinois plaintiff's claims.
While defendants agree this Court possesses personal jurisdiction over plaintiff Bandy—who alleged she was injured by Xarelto in Illinois—defendants wholly dispute plaintiffs' notion that this Court maintains personal jurisdiction over all other non-Illinois plaintiff's claims; which involved no harm in Illinois and no harm to Illinois residents. It is undisputed that non-Illinois plaintiffs do not claim injuries from ingesting Xarelto in Illinois, and all conduct giving rise to non-Illinois plaintiffs' claims occurred in other states.
The instant matter is analogous to BMS where the United States Supreme Court held that California state courts do not retain specific personal jurisdiction over non-resident defendant pharmaceutical companies, for non-resident plaintiff claims not arising out of or relating to defendant's contacts with California. See BMS, at 1780-1783. Similar to BMS,
When personal jurisdiction is challenged pursuant to FED. R. CIV. P. 12(b)(2), plaintiffs bear the burden of establishing personal jurisdiction over defendants. See N. Grain Mktg., at 491 (citing Purdue Research Found., at 773). If the issue of personal jurisdiction is raised by a motion to dismiss, and decided on written material rather than an evidentiary hearing, plaintiffs need only make a prima facie showing of jurisdictional facts. Id. The Court must take as true all well-pleaded facts alleged and resolve any factual disputes in favor of the plaintiff. See Tamburo, at 700.
Here, three out of four plaintiffs failed to allege ingestion of Xarelto in Illinois, or suffered from injuries caused by Xarelto in Illinois. Rather, non-Illinois plaintiffs Schultz, Nolta, and Barnes allege ingestion of Xarelto at some point, at some unknown location; and further allege Xarelto is defectively designed, inadequately tested, dangerous to human health, and lacked proper warnings. Under these facts—in regard to non-Illinois plaintiffs' allegations— there is no connection between Illinois and the underlying Xarelto controversy, which in itself is unconnected to Illinois but for plaintiff Bandy. See id. (citing to Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 927 (2011); Int'l Shoe Co. v. State of Wash., Office of Unemployment Comp. & Placement, 326 U.S. 310, 318 (1945) and explaining defendants' general connections with forum are not enough; a corporation's continuous activity of some sort within a state is not enough to support demand that corporation be amenable to lawsuits unrelated to specified activity); cf. Siegfried, at *4.
Therefore, defendants' Motion to Dismiss non-Illinois plaintiff claims pursuant to FED. R. CIV. P. 12(b)(2) is
As a separate and alternative basis for remand, plaintiffs argue defendants' Second Notice of Removal is untimely under section 1446(b)(3). Section 1446(b)(3) states
(emphasis added). Plaintiffs filed their Complaint in Madison County Circuit Court on March 16, 2017. Defendants filed a Second Notice of Removal on July 19, 2017 after the Supreme Court's June 19, 2017 ruling in BMS. See BMS, at 1173. Plaintiffs erroneously contend defendant's July 19th filing violates section 1446(b)(3)'s 30-day time limit for removal because the BMS order does not qualify as "an amended pleading, motion, order or other paper." See § 1446(b)(3). In support, plaintiffs point to Wisconsin v. Amgen, Inc., 516 F.3d 530, 533-34 (7th Cir. 2008) in a feeble attempt to persuade the Court that pleadings and orders filed in other suits, not related to the removed case, do not qualify as "order[s] or other paper[s]" as described in section 1446(b). See id. (explaining district court remand was proper where complaint in federal court was filed because it was related to different pending federal suit filed years later in different federal court).
Conversely, defendants contend the BMS order qualifies as an "order or other paper from which it may first be ascertained that the case is one which is or has become removable." See § 1446(b). Correctly, defendants attest BMS conclusively established the Due Process Clause prohibits non-Illinois plaintiffs from filing claims against defendants in Illinois state courts. See BMS, at 1776. The Court agrees with defendants and finds plaintiffs' argument unfounded. When a "different case resolve[s] a legal uncertainty concerning the existence of original federal jurisdiction[,]" removal is allowed on that basis. See Amgen, Inc., at 534.
Where attempts at service occur before a case is removed, state law service of process rules govern.
Bayer defendants allege that they were served with three copies of plaintiffs' Complaint—without summonses attached. As a result, they argue that pursuant to Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 350 (1999), a non-properly served defendant is out of the Court's jurisdictional boundaries.
Be that as it may, the fact remains "technical noncompliance with the requirement of serving copies on all parties who have appeared and have not been defaulted does not result in a loss of jurisdiction[.]" See In re Estate of Gustafson, 268 Ill.App.3d 404, 408, 644 N.E.2d 813, 816 (1994). Under the facts of this case, Bayer defendants' procedural due process rights were not violated. See, e.g., Matter of Am. Mut. Ins. Co., 238 Ill.App.3d 1, 11, 606 N.E.2d 32, 39 (1992) (explaining based on Rule 104(d), determining factor is not absence of notice but whether there was any harm or prejudice to nonmoving party). "At a minimum, procedural due process requires notice, an opportunity to respond, and a meaningful opportunity to be heard." Gold Realty Grp. Corp. v. Kismet Cafe, Inc., 358 Ill.App.3d 675, 681, 832 N.E.2d 403, 407-08 (2005).
Here, Bayer defendants received notice of being sued—as evidenced by Bayer defendants' removal of this action to federal court; and were given an opportunity to respond and be heard—as evidenced by Bayer defendants' instant Motion to Dismiss for Insufficient Service of Process and Joinder to Motion to Dismiss based on Lack of Personal Jurisdiction. Bayer defendants were not prejudiced, even if they did not receive a copy of a summons attached to plaintiffs' complaint prior to removal; and none of their procedural due process rights were violated.
Based on the foregoing, plaintiffs' Motion to Remand (Doc. 11) is