SANDOVAL v. LIFECELL CORPORATION
2:21-cv-17705
D.N.J.Dec 3, 2021Background
- Three plaintiffs (Sandoval, Braum, Gates) sued LifeCell Corporation, Allergan USA, Inc., and Allergan, Inc. in New Jersey state court alleging defective hernia mesh products; claims were state-law (products liability, negligence, fraud).
- Defendants removed to federal court asserting diversity jurisdiction (no defendant a citizen of Texas or Michigan; amount in controversy > $75,000).
- Plaintiffs moved to remand, arguing the forum-defendant rule (28 U.S.C. § 1441(b)(2)) barred removal because defendants’ principal places of business were in New Jersey.
- Defendants produced a sworn declaration (Weith) and exhibit showing AbbVie’s May 2020 acquisition and that defendants relocated their nerve centers to North Chicago, Illinois, completed by August 1, 2021.
- Plaintiffs pointed to legacy public-facing materials, Secretary of State filings, and extensive New Jersey operations to challenge the claimed relocation.
- The magistrate judge applied the Hertz nerve-center test and the preponderance-of-evidence standard, found defendants’ proof sufficient that their principal place of business was in Illinois at removal, and recommended denying remand and fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether any defendant was a citizen of New Jersey at removal (forum-defendant rule) | Defendants remain citizens of New Jersey because their headquarters, substantial operations, and public filings show NJ as principal place of business | Defendants’ officers, corporate books, and key governance moved to North Chicago by Aug 1, 2021; therefore principal place of business is Illinois | Defendants met their burden by preponderance; not forum defendants; removal proper |
| Sufficiency of sworn declaration (Weith) to prove relocation | Declaration is too "barebones" and lacks granular operational detail | Declaration plus exhibit (California filing) showing officer locations and records moved is competent evidence of nerve center relocation | Declaration and supporting filings were sufficient under Hertz and district-court practice |
| Weight of continuing NJ operations and legacy public filings | Ongoing manufacturing, local employees, and public-facing NJ addresses show nerve center remained in NJ | Those are legacy or operational sites; nerve-center test focuses on where officers direct, control, coordinate — Illinois | Court held operational presence in NJ is immaterial to nerve-center inquiry; legacy filings did not overcome defendants’ proof |
| Entitlement to attorneys’ fees/costs under 28 U.S.C. § 1447(c) | Plaintiffs sought fees after remand motion | Defendants opposed fees as removal was proper | Court recommended denial of fees because removal was not defective |
Key Cases Cited
- Hertz Corp. v. Friend, 559 U.S. 77 (2010) (establishes the "nerve center" test for a corporation's principal place of business)
- McCann v. Newman Irrevocable Trust, 458 F.3d 281 (3d Cir. 2006) (preponderance-of-evidence standard for domicile/citizenship changes)
- Frederico v. Home Depot, 507 F.3d 188 (3d Cir. 2007) (burden of proof on removing party to establish proper removal)
- Encompass Ins. Co. v. Stone Mansion Restaurant Inc., 902 F.3d 147 (3d Cir. 2018) (forum-defendant rule is procedural, not jurisdictional)
- McCollum v. State Farm Ins. Co., [citation="376 F. App'x 217"] (3d Cir. 2010) (district courts may rely on sworn affidavits to evaluate corporate citizenship)
- Wells Fargo Bank, N.A. v. Dey-El, [citation="788 F. App'x 857"] (3d Cir. 2019) (forum-defendant rule is a procedural defect that must be timely raised)