Friday, April 6, 2012

GSK Citizenship Issue On Appeal

We can’t say much of substance about this issue, as we represent GlaxoSmithKline in certain matters, but a remedy is in sight (we hope) for the peculiar situation that has developed with respect to GSK’s citizenship for purposes of diversity jurisdiction.  Currently, that issue is a huge muddle – with two judges of the Eastern District of Pennsylvania holding that GSK is a citizen of Delaware.  See Johnson v. Smithkline Beecham Corp., 2012 WL 1057435 (E.D. Pa. March 29, 2012) (Diamond, J.); White v. SmithKline Beecham Corp., 2010 WL 3119926 (E.D. Pa. Aug. 6, 2010) (McLaughlin, J.).  Another Eastern District judge, however, has ruled on several occasions that GSK is a citizen of Pennsylvania.  Brewer v. SmithKline Beacham Corp., 774 F. Supp.2d 720 (E.D. Pa. 2011); Patton v. SmithKline Beecham Corp., 2011 WL 6210724 (E.D. Pa. Dec. 14, 2011); Maldonado v. SmithKline Beecham Corp., 2011 WL 7069430 (E.D. Pa. Dec. 12, 2011) (all Savage, J.).

This dispute centers around the application of the “nerve center” test for corporate citizenship.  Its basis is quite simple:  GSK would rather be in federal court than in the Philadelphia Court of Common Pleas hellhole, and plaintiffs prefer the opposite result.  If GSK is a Delaware citizen, then it is diverse and entitled to a federal venue.  If it is a Pennsylvania citizen, then it has been sued in its own "home" state court, and it is stuck in state court.

Without commenting on the underlying facts, we’re pleased to note that Judge Diamond in the Johnson case has decided to certify the issue for immediate interlocutory appeal to the Third Circuit.  2012 WL 1057435, at *8-9.  It’s difficult for this type of issue to be appealed because remands (what Judge Savage did) are not appealable orders.  As Judge Diamond noted in his certification order, the current “uncertainty is extremely troubling.”  Id. at *9.  At least now (assuming the Third Circuit accepts the appeal – which all parties appear to agree that it should) we’ll have some definitive determination of the citizenship of a party defendant in numerous cases.