PHILADELPHIA — The case of a Pennsylvania woman with ovarian cancer against defendants that include an East Pennsboro Township-based pharmaceutical company is on its way back to state court after a federal judge last month rejected an attempt to move it to his jurisdiction.
U.S. District Court Judge Mark A. Kearney, on the bench in Pennsylvania's Eastern District, rejected an argument by Johnson & Johnson, a remaining defendant along with Rite Aid, that a former defendant's bankruptcy filing should be enough for federal jurisdiction.
"Johnson & Johnson has not shown our 'related-to' jurisdiction over the [Ellen and Yuri] Kleiners' long-pending products liability case set for trail in January 2020," Kearny said in his 14-page memorandum and order issued June 11. "Possible indemnity is not automatic indemnity like a capped insurance policy setting a definite obligation without further litigation. Even if we find indemnity, we still remand under our court of appeals' guidance as to the exercise of our discretion. We grant the Kleiners' motion to remand."
U.S. District Court Judge Mark A. Kearney | pawd.uscourts.gov
The Kleiners are suing Rite Aid and Johnson & Johnson, alleging the latter company's baby powder product caused her advanced stage ovarian cancer that was diagnosed in 2011.
In early February 2016, Rite Aid shareholders approved a Walgreens takeover offer, a move that at the time seemed to be aimed at keeping Rite Aid out of bankruptcy. In February 2018, Rite Aid and the Albertson Co. supermarket chain jointly announced a definitive merger agreement to create an $83 billion publicly traded "food, health and wellness leader."
In February 2019, nine days after the Kleiners voluntarily dismissed Imerys Talc America, Inc. as a defendant in their case, the talc manufacturer and two of its affiliates filed for Chapter 11 protection in U.S. Bankruptcy Court in Delaware
In April, Johnson & Johnson filed to remove the Kleiners' case, which had been state courts for years, to federal court, arguing the case had become related to Imerys' bankruptcy proceeding and that a move to federal court appropriate.
Kearney did not agree.
"The bankruptcy automatic stay does not apply as the products liability case does not include a bankrupt debtor," Kearney said in his memorandum. "After analyzing the defendant manufacturer's possible indemnity rights against the non-party debtor, we find the ongoing products liability case is not related to the non party supplier's pending bankruptcy. We lack subject matter jurisdiction. We grant the state court plaintiff's motion to remand."