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Kerkhof v. Johnson & Johnson

United States District Court, D. Maryland

June 3, 2019

CAROL KERKHOF, et al., Plaintiffs,
v.
JOHNSON & JOHNSON, et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          PAULA XINIS, UNITED STATES DISTRICT JUDGE

         Pending before the Court is Plaintiffs Carol and Stuart Kerkhof's Emergency Motion to Remand. ECF No. 15. The motion is fully briefed, and no hearing is necessary. See Loc. R. 105.6. For the following reasons, the Court GRANTS the Kerkhofs' motion.

         I. Background

         In November 2014, Plaintiff Carol Kerkhof (“Mrs. Kerkhof”) was diagnosed with malignant mesothelioma, a terminal cancer associated with asbestos exposure. ECF No. 15-1 at 9. On November 1, 2017, Mrs. Kerkhof and her husband, Stuart Kerkhof, filed suit in the Circuit Court for Montgomery County against a number of defendants, including Johnson & Johnson and Johnson & Johnson Consumer Inc. (collectively, “J&J”). Id.; see also ECF No. 2. Plaintiffs allege “that J&J sold talcum powder products containing asbestos and that Mrs. Kerkhof's regular use of and exposure to J&J's Baby Powder caused her to develop mesothelioma.” ECF No. 15-1 at 9.

         Plaintiffs also named Imerys Talc America, Inc., one of J&J's talc suppliers, as a defendant in the state court action, but the Circuit Court dismissed Imerys for lack of personal jurisdiction on April 19, 2018. Id. at 9-10. The Circuit Court also granted summary judgment in favor of all other defendants except J&J. Id. at 10. In January 2019, the Circuit Court set the case in for a two-week trial against J&J to begin on September 24, 2019. Id.

         After having been dismissed from this lawsuit, Imerys Talc America, Inc. and two affiliates (collectively, “Debtors”) filed a voluntary Chapter 11 bankruptcy petition in the United States Bankruptcy Court for the District of Delaware. ECF No. 1 ¶ 1. Based on the Debtors' bankruptcy action, J&J has sought removal for over one thousand state court cases. See ECF No. 1; ECF No. 1-13 at 5-298 (listing state court talc claims removed to federal courts). J&J's principle contention for the propriety of removal is that because “Debtors have historically been the exclusive supplier of cosmetic talc to J&J, ” the cases are properly removed as proceedings “related to the Debtors' bankruptcy.” ECF No. 1 ¶ 8. On April 18, 2019, J&J also moved to transfer venue for these cases to the United States District Court for the District of Delaware so as to “centralize” in the District of Delaware pursuant to 28 U.S.C. § 157(b)(5). Id. ¶¶ 7-10.

         Pertinent to this action, J&J noted removal on April 19, 2019, pursuant to 28 U.S.C. §§ 1334 and 1452, invoking the Debtors' bankruptcy petition as grounds.[1] See ECF No. 1 at 1. In its Notice of Removal, J&J also urges the Court “to defer ruling on any motions, including any motions seeking abstention or remand” so that the District of Delaware may first rule on the pending venue motions. Id. ¶ 11.

         On May 6, 2019, Plaintiffs moved for remand. See ECF No. 15. Because trial is fast approaching, the Kerkhofs understandably ask for expedited consideration of the remand motion.[2] Id. ¶ 3. Plaintiffs assert remand is proper on a number of grounds, including that Defendants' Notice of Removal was untimely, that the Court lacks subject matter jurisdiction over this action, and equitable grounds weigh in favor of remand. Id. ¶ 4-7.

         II. Standard of Review

         As courts of limited jurisdiction, a federal court “may not exercise jurisdiction absent a statutory basis.” Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552 (2005). Further, a federal court must presume that a case lies outside its limited jurisdiction unless and until jurisdiction has been shown to be proper.” United States v. Poole, 531 F.3d 263, 274 (4th Cir. 2008) (citing Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 (1994)). When removal is challenged, the defendant as the removing party bears the burden of “demonstrating the court's jurisdiction over the matter.” Strawn v. AT & T Mobility, LLC, 530 F.3d 293, 296 (4th Cir. 2008). Federal courts construe removal statutes strictly and resolve all doubts in favor of remand. See Md. Stadium Auth. v. Ellerbe Becket, Inc., 407 F.3d 255, 260 (4th Cir. 2005).

         III. Discussion

         J&J removed this action pursuant to 28 U.S.C. §§ 1334 and 1452, arguing that the Court has original jurisdiction over Plaintiffs' state law action by virtue of Debtors' bankruptcy proceeding. See ECF No. 1 ¶¶ 16-17. 28 U.S.C. § 1452(a) allows a party to “remove any claim or cause of action in a civil action . . . to the district court for the district where such civil action is pending” if that district court has jurisdiction under 28 U.S.C. § 1334. Section 1334, in turn, governs bankruptcy jurisdiction and vests district courts with “original but not exclusive jurisdiction of all civil proceedings arising under title 11, or arising in or related to cases under title 11.” 28 U.S.C. § 1334(b). Accordingly, parties may remove to federal court a state court action that is “related to” a Chapter 11 bankruptcy.

         A. J&J's Motion to Stay Decision on Remand

         Before reaching the Kerkhofs' grounds for remand, the Court first addresses J&J's request to stay this matter until the District of Delaware rules on the Motion to Fix Venue. ECF No. 18-2 at 14-17. J&J relies on 28 U.S.C. § 157(b)(5), which provides “that personal injury tort and wrongful death claims shall be tried in the district court in which the bankruptcy case is pending, or in the district court in the district in which the claim arose, as determined by the district court in which the bankruptcy case is pending.” Id. at 14-15. Critical to this Court's decision, however, is that the provision on which J&J relies “is not jurisdictional.” Stern v. Marshall, 564 U.S. 462, 479 (2011). This means that although the District of Delaware is conferred ...


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