Lott v. Pfizer, No. 05-0230, 2006 WL 2224155 (S.D. Ill. Aug. 2, 2006).

If we were classic drama queens, we could call Pfizer the Hamlet of Bextra and Celebrex litigation, facing the “slings and arrows of outrageous fortune.”  Last August, the Seventh Circuit deep-sixed the company’s effort to remove a class action under the Class Action Fairness Act, and this district court ruling rejects Pfizer’s objections to the bill for plaintiffs’ removal costs.

In the original state court suit (filed in Madison County, Ill., one of the official “Judicial Hellholes of the American Tort Reform Association) the plaintiffs complained that they were paying too much for their drugs because of their allegedly undisclosed health hazards. Pfizer removed under traditional diversity jurisdiction and under CAFA.  Judge Reagan rejected CAFA jurisdiction and ordered briefing on whether the case met the $75,000 traditional diversity amount-in-controversy requirement, finding ultimately that it did not.  Reagan remanded the case and declared Pfizer had to pay plaintiffs’ costs and actual expenses of removal under 28 U.S.C. § 1447(c).

Judge Posner of the Seventh Circuit U.S. Court of Appeals penned the opinion backing up Judge Reagan on the remand issue, noting that the defendants should expect last-minute filings like this case, which beat CAFA’s effective date by one day. (You can read all about it here:  See the CAFA Law Blog analysis of the appellate opinion in Pfizer v. Lott posted on September 20, 2005). 

Battle ensued in the Southern District of Illinois over plaintiffs’ tab.  Judge Reagan had ruled earlier that the federal Magistrate Judge would handle any disputes on that score. The parties wrangled over the bill, with Pfizer pursuing separate motions to vacate and to reduce the award.  Pfizer took a second trip to the Seventh Circuit, which rejected the appeal regarding the removal costs as premature because the Magistrate below had not ruled on Pfizer’s motion to reduce the award. The magistrate knocked $2,000 off the award, and ordered Pfizer to pay $23,664.83.

Pfizer objected to the magistrate judge’s ruling, and on August 2, 2006, Judge Reagan ultimately found that the reduced award was appropriate.  Judge Reagan found that Pfizer had no objectively reasonable basis for removal.  Along the way, Judge Reagan rebuffed Pfizer’s reliance on the U.S. Supreme Court’s recent ruling in Martin v. Franklin Capital Corp., 125 S.Ct. 1941 (2005), which provides that attorney’s fees may be awarded generally only where the party pursuing removal had no objectively reasonable basis for doing so.