In Corber v. Xanodyne Pharmaceuticals, Inc., the U.S. Court of Appeals for the Ninth Circuit struck a blow against a tactic that has become common among Plaintiffs in pharmaceutical and medical device litigation. No. 13-56306, 2014 WL 6436154 (9th Cir. Nov. 18, 2014).
The Corber Plaintiffs filed suit alleging injuries caused by the ingestion of propoxyphene, an ingredient found in Darvocet, Darvon and their generic alternatives. Counsels for the Plaintiffs filed over forty Complaints without class demands in California state courts. Each Complaint contained less than one hundred Plaintiffs to avoid allowing defendants the possibility of removing the claims to federal district courts based on the “Mass Action” provisions of the Class Action Fairness Act (“CAFA”). Under CAFA’s Mass Action provision, a defendant may remove an action where monetary relief is sought on behalf of one hundred or more plaintiffs who propose to try their claims jointly on the grounds that Plaintiffs’ claims involve common questions of law and fact and the total value of Plaintiff’s claims in the aggregate could exceed $5 million. 28 U.S.C. § 1332(d).
In October 2013 a group of Plaintiffs’ counsels who were responsible for many of the propoxyphene suits filed petitions with the California Judicial Commission requesting that the commission establish a coordinated proceeding before a single court to try all California propoxyphene actions under a special provision of California’s Code of Civil Procedure which allowed for the coordination of certain civil actions involving common questions of law and fact. Following Plaintiff’s request for coordination, Defendants removed the cases to federal court under CAFA’s Mass Action provisions. Following the Plaintiffs’ Motion to Remand, the District Court concluded Plaintiff’s petitions for coordination did not amount to proposals to jointly try the various propoxyphene cases sufficient to trigger CAFA jurisdiction. Although the decision was affirmed by a three judge panel of the Ninth Circuit, rehearing was granted before a full panel of all non-recused judges sitting on the Circuit.
In determining whether the petitions for coordination were indeed proposals for a joint trial, the Court first acknowledged Plaintiffs’ role as masters of their Complaint, who were free to structure their actions in cases involving fewer that one hundred Plaintiffs to avoid CAFA jurisdiction. However, the Court held its analysis of CAFA jurisdiction does not stop with the Complaint, but also extends to the petitions for coordination. Considering the petition for coordination, the Court found that the Plaintiffs’ rationale for coordination clearly suggested a proposal for a joint trial. The Court specifically noted “Plaintiffs listed potential issues in support of their petitions that would be addressed only through some form of joint trial, such as the danger of inconsistent judgments and conflicting determinations of liability.” Finding the that the petitions for consolidation “for all purposes” to address common issues of law or fact were tantamount to a request for a joint trial, the Ninth Circuit reversed the decision of the district court and upheld defendants’ assertion of federal jurisdiction under CAFA’s Mass Action provision.
The Corber Court’s decision is a significant victory for class action defendants. From a common sense perspective, the tactic employed by the Plaintiffs in the Corber case seems to fly in the face of the clear language of CAFA and Congress’s stated intent to curb abuses of class action litigation. California’s state courts have become popular destinations for what some commentators have termed “litigation tourism”, where claims from Plaintiffs from all over the country are packaged into suits in perceived friendly jurisdictions. CAFA was intended to serve as a check against exactly this type of behavior and we applaud the Ninth Circuit’s decision in Corber limiting this jurisdictional gamesmanship.
Author: Tripp Dubose