Preview
9/16/2019 8:59 AM
Marilyn Burgess - District Clerk Harris County
Envelope No. 36820102
By: KATINA WILLIAMS
Filed: 9/16/2019 8:59 AM
MDL PRETRIAL CAUSE NO. 2019-49108
CITY OF HOUSTON, TEXAS, § IN THE DISTRICT COURT
Plaintiff, §
§
v. § 270TH JUDICIAL DISTRICT
§
PURDUE PHARMA, L.P. et al., §
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Defendants. § HARRIS COUNTY, TEXAS
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MASTER FILE NO. 2018-63587
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§ IN THE DISTRICT COURT
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IN RE: TEXAS OPIOID LITIGATION §
§ 152ND JUDICIAL DISTRICT
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MDL NO. 18-0358 §
§ HARRIS COUNTY, TEXAS
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PLAINTIFF’S EMERGENCY MOTION TO SEVER PURDUE
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DUE TO BANKRUPTCY
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Plaintiff, City of Houston, Texas (“the City”), files this Emergency Motion to Sever
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Purdue Due to Bankruptcy, asking this Court to sever claims against Purdue Pharma L.P., Purdue
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Pharma Inc., and The Purdue Frederick Company (“Purdue Defendants”) into separate
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proceedings from the claims against all other Defendants.
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BACKGROUND
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1. The City originally sued various Defendants, including Purdue Defendants, for
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damages caused by Defendants’ unlawful marketing, promotion, distribution, and sale of
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opioids.
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2. On September 15, 2019, Defendant Purdue Pharma L.P. declared bankruptcy.
Purdue Defendants will assert that the bankruptcy’s automatic stay applies to this lawsuit.
3. Johnson & Johnson, also a Defendant to this lawsuit, has previously taken
advantage of the bankruptcy of a codefendant to (fraudulently) remove 2,400 talcum powder
cases to federal court on the basis that they were “related to” the codefendant’s bankruptcy
pursuant to 28 U.S.C. § 1452. In re Imerys Talc Am., Inc., No. 1:19-mc-00103-MN, Doc. 96, at
*3 (D. Del. July 19, 2019) (attached as Exhibit A). Even though the bankruptcy court called
Johnson & Johnson’s actions “patent[] forum shopping,” and even though federal district judges
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refused to “reward” Johnson & Johnson’s “unabashed attempt at further delaying the resolution
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of hundreds of [] plaintiffs’ claims,” the company successfully delayed state talcum powder
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litigation for months. Id. at *18; In re Motions to Remand Removed State Court Talc Actions,
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No. 19-01692-KCF, Doc. 15, at *2 (D. N.J. July 2, 2109) (attached as Exhibit B).
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ARGUMENT AND AUTHORITIES
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4. The City asks this Court to sever claims against Purdue Defendants from the rest
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of its lawsuit against all other Defendants and to assign the case against Purdue Defendants the
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new cause number Cause No. 2018-77098-A (“Severed Action”).
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5. A court may sever part of the case before the case is submitted to the trier of fact.
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Tex. R. Civ. P. 41. “The trial court is authorized to order severance on its own initiative without
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motion by either party.” Adrichem v. Agstar Fin. Servs., FLCA, No. 07-13-00432-CV, 2015 WL
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7164135, at *4 (Tex. App.—Amarillo Nov. 13, 2015, no pet.); Rice v. Travelers Exp. Co., 407
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S.W.2d 534, 536 (Tex. Civ. App.—Houston 1966, no writ) (“We hold the meaning of the above
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rules is such as to authorize the court on its own motion to order severances in the circumstances
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under which the above rules authorize severance and separate trial and a motion by a party to
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sever is not necessary.”)
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6. “Severing a claim against a bankrupt party into a new cause of action does not
violate the automatic stay provisions of the bankruptcy code.” Hoover v. Hooker, No. 05-00-
00268-CV, 2002 WL 1462210, at *2 (Tex. App.—Dallas July 9, 2002, no pet.); In re Sw. Bell
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Tel. Co., 6 S.W.3d 753, 755 (Tex. App.—Corpus Christi 1999, orig. proceeding); Wedgeworth v.
Fibreboard Corp., 706 F.2d 541, 544 (5th Cir.1983) (“the protections of § 362 neither apply to
co-defendants nor preclude severance”).
7. Severance of claims against a bankrupt defendant is within the trial court’s
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discretion. In re Sw. Bell Tel. Co., 6 S.W.3d at 756; Jain v. Doctors Practice Mgmt., Inc., No.
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01-99-00193-CV, 2000 WL 678801, at *3 (Tex. App.—Houston [1st Dist.] May 25, 2000, no
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pet.) (severance of claims against bankrupt entity was not abuse of discretion). And claims
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against bankrupt defendants are commonly severed from claims against solvent defendants. See,
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e.g., Alexander v. Turtur & Assocs., Inc., 146 S.W.3d 113, 116 (Tex. 2004); Dow Chem. Co. v.
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Garcia, 909 S.W.2d 503, 504 (Tex. 1995); Tidrow v. Roth, 189 S.W.3d 408, 411 (Tex. App.—
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Dallas 2006, no pet.); Hanks v. NCNB Texas Nat. Bank, 815 S.W.2d 763, 764 (Tex. App.—
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Eastland 1991, no writ); Trafalgar House Oil & Gas Inc. v. De Hinojosa, 773 S.W.2d 797, 797
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(Tex. App.—San Antonio 1989, no writ); Randall's Food & Drugs, L.P. v. Patton, No. 01-06-
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00821-CV, 2008 WL 3876149, at *1 n.1 (Tex. App.—Houston [1st Dist.] Aug. 21, 2008, no
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pet.); Kondos Entm't, Inc. v. Quinney Elec., Inc., No. 04-96-00251-CV, 1999 WL 1261455, at *1
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(Tex. App.—San Antonio Dec. 29, 1999, no pet); Lee v. Guar. Bank, No. 06-98-00044-CV, 1999
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WL 430057, at *5 (Tex. App.—Texarkana June 29, 1999, no pet.).
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8. Absent a severance of the claims against the bankrupt entity, no final judgment
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can be entered against the solvent Defendants. In re Sw. Bell Tel. Co., 6 S.W.3d at 755 (citing
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Hood v. Amarillo Nat'l Bank, 815 S.W.2d 545, 547 (Tex.1991), and Sanchez v. Hester, 911
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S.W.2d 173, 176 (Tex. App.—Corpus Christi 1995, orig. proceeding)).
9. Plaintiff requests that this Court sever Purdue Defendants from the original Cause
No. 2018-49108, styled in the clerk’s system as City of Houston, Texas v. Purdue Pharma L.P.,
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et al. and to place the Purdue Defendants into the Severed Action with the separate Cause No.
2018-49108-A, styled City of Houston, Texas v. Purdue Pharma, L.P. and to include in that
Severed Action the following, relevant pleadings:
a. Plaintiff’s Original Petition and Jury Demand, Doc. No. 85879544, filed on June 24,
2019, originally filed in Harris City, Cause No. 2019-43219;
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b. Purdue Pharma, L.P., Purdue Pharma Inc., and The Purdue Frederick Company’s
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Original Answer to Plaintiff’s Original Petition, Doc No. 86463134, filed on August 2,
2019, originally filed in Harris City, Cause No. 2019-49108.
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The Severed Action should remain active, although subject to the bankruptcy stay to the extent
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that the law requires. Plaintiff will cover administrative costs associated with the clerk’s opening
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of the Severed Action.
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10. Unless the Court is inclined to grant Bu
severance sua sponte, Plaintiff requests an
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emergency hearing on the motion.
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CONCLUSION
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For these reasons, the City urges the Court to sever its claims against Purdue Defendants
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so that the City’s claims may proceed and a final judgment may be entered against the remaining
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Defendants.
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Date: September 16, 2019
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Respectfully Submitted,
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of
THE LANIER LAW FIRM
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/s/ Dara G. Hegar
W. Mark Lanier
TX State Bar No. 11934600
Dara G. Hegar
TX State Bar No. 24007280
Rebecca L. Phillips
TX State Bar No. 24079136
4
10940 W. Sam Houston Pkwy N, Ste 100
Houston, TX 77064
Tel: 713-659-5200
Fax: 713-659-2204
wml@lanierlawfirm.com
dgh@lanierlawfirm.com
rebecca.phillips@lanierlawfirm.com
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CERTIFICATE OF SERVICE
I hereby certify that on the 16th day of September 2019, a true and correct copy of the
preceding document was electronically filed and served to all counsel of record.
k
/s/ Dara G. Hegar
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Dara G. Hegar
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CERTIFICATE OF CONFERENCE
Plaintiff provides this Certificate of Conference pursuant to Harris County Local Rule
3.3.6 and Court Policies and Procedures Rule 3a. On September 16, 2019, Dara G. Hegar of
Lanier Law Firm, emailed liaison counsel for Manufacturer, Distributor, and Pharmacy
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Defendants. Those counsel did not respond immediately, and Plaintiff filed the Motion on an
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emergency basis.
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/s/ Dara G. Hegar
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THE LANIER LAW FIRM
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Dara G. Hegar
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TX State Bar No. 24007280
10940 W. Sam Houston Pkwy N, Ste. 100
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Houston, TX 77064
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Tel: 713-659-5200
Fax: 713-659-2204
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dgh@lanierlawfirm.com
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Preview
9/16/2019 8:59 AM Marilyn Burgess - District Clerk Harris County Envelope No. 36820102 By: KATINA WILLIAMS Filed: 9/16/2019 8:59 AM MDL PRETRIAL CAUSE NO. 2019-49108 CITY OF HOUSTON, TEXAS, § IN THE DISTRICT COURT Plaintiff, § § v. § 270TH JUDICIAL DISTRICT § PURDUE PHARMA, L.P. et al., § k ler Defendants. § HARRIS COUNTY, TEXAS tC ****************************************************************************** MASTER FILE NO. 2018-63587 ric ist § IN THE DISTRICT COURT sD IN RE: TEXAS OPIOID LITIGATION § § 152ND JUDICIAL DISTRICT es MDL NO. 18-0358 § § HARRIS COUNTY, TEXAS rg Bu PLAINTIFF’S EMERGENCY MOTION TO SEVER PURDUE n DUE TO BANKRUPTCY ily ar Plaintiff, City of Houston, Texas (“the City”), files this Emergency Motion to Sever M Purdue Due to Bankruptcy, asking this Court to sever claims against Purdue Pharma L.P., Purdue of e Pharma Inc., and The Purdue Frederick Company (“Purdue Defendants”) into separate ffic proceedings from the claims against all other Defendants. yO BACKGROUND op 1. The City originally sued various Defendants, including Purdue Defendants, for C ial damages caused by Defendants’ unlawful marketing, promotion, distribution, and sale of fic opioids. of Un 2. On September 15, 2019, Defendant Purdue Pharma L.P. declared bankruptcy. Purdue Defendants will assert that the bankruptcy’s automatic stay applies to this lawsuit. 3. Johnson & Johnson, also a Defendant to this lawsuit, has previously taken advantage of the bankruptcy of a codefendant to (fraudulently) remove 2,400 talcum powder cases to federal court on the basis that they were “related to” the codefendant’s bankruptcy pursuant to 28 U.S.C. § 1452. In re Imerys Talc Am., Inc., No. 1:19-mc-00103-MN, Doc. 96, at *3 (D. Del. July 19, 2019) (attached as Exhibit A). Even though the bankruptcy court called Johnson & Johnson’s actions “patent[] forum shopping,” and even though federal district judges k ler refused to “reward” Johnson & Johnson’s “unabashed attempt at further delaying the resolution tC of hundreds of [] plaintiffs’ claims,” the company successfully delayed state talcum powder ric litigation for months. Id. at *18; In re Motions to Remand Removed State Court Talc Actions, ist sD No. 19-01692-KCF, Doc. 15, at *2 (D. N.J. July 2, 2109) (attached as Exhibit B). es ARGUMENT AND AUTHORITIES rg 4. The City asks this Court to sever claims against Purdue Defendants from the rest Bu of its lawsuit against all other Defendants and to assign the case against Purdue Defendants the n ily new cause number Cause No. 2018-77098-A (“Severed Action”). ar M 5. A court may sever part of the case before the case is submitted to the trier of fact. of Tex. R. Civ. P. 41. “The trial court is authorized to order severance on its own initiative without e ffic motion by either party.” Adrichem v. Agstar Fin. Servs., FLCA, No. 07-13-00432-CV, 2015 WL O 7164135, at *4 (Tex. App.—Amarillo Nov. 13, 2015, no pet.); Rice v. Travelers Exp. Co., 407 y op S.W.2d 534, 536 (Tex. Civ. App.—Houston 1966, no writ) (“We hold the meaning of the above C rules is such as to authorize the court on its own motion to order severances in the circumstances ial fic under which the above rules authorize severance and separate trial and a motion by a party to of sever is not necessary.”) Un 6. “Severing a claim against a bankrupt party into a new cause of action does not violate the automatic stay provisions of the bankruptcy code.” Hoover v. Hooker, No. 05-00- 00268-CV, 2002 WL 1462210, at *2 (Tex. App.—Dallas July 9, 2002, no pet.); In re Sw. Bell 2 Tel. Co., 6 S.W.3d 753, 755 (Tex. App.—Corpus Christi 1999, orig. proceeding); Wedgeworth v. Fibreboard Corp., 706 F.2d 541, 544 (5th Cir.1983) (“the protections of § 362 neither apply to co-defendants nor preclude severance”). 7. Severance of claims against a bankrupt defendant is within the trial court’s k ler discretion. In re Sw. Bell Tel. Co., 6 S.W.3d at 756; Jain v. Doctors Practice Mgmt., Inc., No. tC 01-99-00193-CV, 2000 WL 678801, at *3 (Tex. App.—Houston [1st Dist.] May 25, 2000, no ric pet.) (severance of claims against bankrupt entity was not abuse of discretion). And claims ist sD against bankrupt defendants are commonly severed from claims against solvent defendants. See, es e.g., Alexander v. Turtur & Assocs., Inc., 146 S.W.3d 113, 116 (Tex. 2004); Dow Chem. Co. v. rg Garcia, 909 S.W.2d 503, 504 (Tex. 1995); Tidrow v. Roth, 189 S.W.3d 408, 411 (Tex. App.— Bu Dallas 2006, no pet.); Hanks v. NCNB Texas Nat. Bank, 815 S.W.2d 763, 764 (Tex. App.— n ily Eastland 1991, no writ); Trafalgar House Oil & Gas Inc. v. De Hinojosa, 773 S.W.2d 797, 797 ar M (Tex. App.—San Antonio 1989, no writ); Randall's Food & Drugs, L.P. v. Patton, No. 01-06- of 00821-CV, 2008 WL 3876149, at *1 n.1 (Tex. App.—Houston [1st Dist.] Aug. 21, 2008, no e ffic pet.); Kondos Entm't, Inc. v. Quinney Elec., Inc., No. 04-96-00251-CV, 1999 WL 1261455, at *1 O (Tex. App.—San Antonio Dec. 29, 1999, no pet); Lee v. Guar. Bank, No. 06-98-00044-CV, 1999 y op WL 430057, at *5 (Tex. App.—Texarkana June 29, 1999, no pet.). C 8. Absent a severance of the claims against the bankrupt entity, no final judgment ial fic can be entered against the solvent Defendants. In re Sw. Bell Tel. Co., 6 S.W.3d at 755 (citing of Hood v. Amarillo Nat'l Bank, 815 S.W.2d 545, 547 (Tex.1991), and Sanchez v. Hester, 911 Un S.W.2d 173, 176 (Tex. App.—Corpus Christi 1995, orig. proceeding)). 9. Plaintiff requests that this Court sever Purdue Defendants from the original Cause No. 2018-49108, styled in the clerk’s system as City of Houston, Texas v. Purdue Pharma L.P., 3 et al. and to place the Purdue Defendants into the Severed Action with the separate Cause No. 2018-49108-A, styled City of Houston, Texas v. Purdue Pharma, L.P. and to include in that Severed Action the following, relevant pleadings: a. Plaintiff’s Original Petition and Jury Demand, Doc. No. 85879544, filed on June 24, 2019, originally filed in Harris City, Cause No. 2019-43219; k ler b. Purdue Pharma, L.P., Purdue Pharma Inc., and The Purdue Frederick Company’s tC Original Answer to Plaintiff’s Original Petition, Doc No. 86463134, filed on August 2, 2019, originally filed in Harris City, Cause No. 2019-49108. ric ist The Severed Action should remain active, although subject to the bankruptcy stay to the extent sD that the law requires. Plaintiff will cover administrative costs associated with the clerk’s opening es of the Severed Action. rg 10. Unless the Court is inclined to grant Bu severance sua sponte, Plaintiff requests an n emergency hearing on the motion. ily CONCLUSION ar M For these reasons, the City urges the Court to sever its claims against Purdue Defendants of e so that the City’s claims may proceed and a final judgment may be entered against the remaining ffic Defendants. yO op Date: September 16, 2019 C ial Respectfully Submitted, fic of THE LANIER LAW FIRM Un /s/ Dara G. Hegar W. Mark Lanier TX State Bar No. 11934600 Dara G. Hegar TX State Bar No. 24007280 Rebecca L. Phillips TX State Bar No. 24079136 4 10940 W. Sam Houston Pkwy N, Ste 100 Houston, TX 77064 Tel: 713-659-5200 Fax: 713-659-2204 wml@lanierlawfirm.com dgh@lanierlawfirm.com rebecca.phillips@lanierlawfirm.com k ler tC ric ist sD es rg Bu n ily ar M of e ffic yO op C ial fic of Un 5 CERTIFICATE OF SERVICE I hereby certify that on the 16th day of September 2019, a true and correct copy of the preceding document was electronically filed and served to all counsel of record. k /s/ Dara G. Hegar ler Dara G. Hegar tC ric ist sD es rg Bu n ily ar M of e ffic yO op C ial fic of Un 6 CERTIFICATE OF CONFERENCE Plaintiff provides this Certificate of Conference pursuant to Harris County Local Rule 3.3.6 and Court Policies and Procedures Rule 3a. On September 16, 2019, Dara G. Hegar of Lanier Law Firm, emailed liaison counsel for Manufacturer, Distributor, and Pharmacy k ler Defendants. Those counsel did not respond immediately, and Plaintiff filed the Motion on an tC emergency basis. ric ist sD /s/ Dara G. Hegar es THE LANIER LAW FIRM rg Dara G. Hegar Bu TX State Bar No. 24007280 10940 W. Sam Houston Pkwy N, Ste. 100 n Houston, TX 77064 ily Tel: 713-659-5200 Fax: 713-659-2204 ar dgh@lanierlawfirm.com M of e ffic yO op C ial fic of Un 7