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Adrianne Webb
Adrianne Webb
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ED Pa. Applies “Nerve Center” Test in Remanding Paxil Cases to State Court

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Judge Savage issued a memorandum opinion on March 24, 2011 remanding eight pharmaceutical liability cases against GlaxoSmithKline involving its anti-depressant Paxil to state court. Judge Savage concluded that GlaxoSmithKline’s “nerve center” is located in Pennsylvania for purposes of citizenship.

In removing the Paxil Birth Defect cases to the Eastern District of Pennsylvania, GSK claimed there was complete diversity because “[GSK] is a Delaware citizen for jurisdictional purposes and none of the plaintiffs is a Delaware citizen.” Plaintiffs moved for remand contending lack of complete diversity.

The opinion applies the Supreme Court’s “nerve center” test and rationale enunciated in Hertz Corp. v. Friend, 130 S. Ct. 1181 (2010). In determining the citizenship of a limited liability company – whose sole member is a holding company that does not direct or control the operations of the LLC – the Court “look[ed] to the “nerve center” of the LLC to which the holding company has delegated the operational decision-making.”