United States District Court, E.D. Arkansas, Western Division
ARcare, Inc.'s motion to remand [Doc. No. 12] is granted
except as to the issue of attorneys' fees and costs.
Inc. (“ARcare”) initially filed this lawsuit in
the United States District Court for the Central District of
California, alleging Qiagen North American Holdings
(“QNAH”) violated the Telephone Consumer
Protection Act (“TCPA”), 47 U.S.C. section 227,
et seq. See ARcare v. Qiagen North American Holdings,
Inc., Case No. 2:16-CV-7638, ECF No. 1 (C.D. Cal. Oct.
13, 2016). ARcare claimed that QNAH violated the TCPA by
sending ARcare and other plaintiffs (1) unsolicited faxes to
parties with which it had no preexisting business
relationship (“unsolicited fax claim”) and (2) by
sending faxes that did not comply with the statute's
opt-out notice requirement (“opt-out notice
claim”). QNAH moved to dismiss, asserting that ARcare
lacked Article III standing. See id., ECF No. 14
(C.D. Cal. Nov. 23, 2016). The Central District of California
granted the motion to dismiss without prejudice because
ARcare's injury was not traceable to Qiagen's alleged
violations of the TCPA. See id., ECF No. 31 (C.D.
Cal. Jan. 19, 2017).
refiled its complaint in Lonoke County Circuit Court. Despite
its previous assertion that a federal court lacked
jurisdiction, QNAH removed the case to federal court. See
ARcare v. Qiagen North American Holdings, Inc., Case No.
4:17-cv-00120-BSM, ECF No. 1 (E.D. Ark. March 2, 2017).
ARcare moved to remand based on issue preclusion and judicial
estoppel, and the motion was granted. Id., ECF Nos.
5, 6, 20 (E.D. Ark. March 2, 2017).
has once again removed to federal court. See Doc.
No. 1. QNAH argues that federal jurisdiction is now proper
because ARcare has fundamentally changed its theory of
recovery under the TCPA, thus removing the issue identified
and ruled upon by the Central District of California in
dismissing the original complaint. Moreover, QNAH argues that
ARcare amended the complaint to include Qiagen, Inc.
(“Qiagen”), a separate corporate entity, which
cannot be precluded or estopped by a prior case to which it
was not a party.
however, is proper because both issue preclusion and judicial
estoppel still prevent defendants from arguing that a federal
court has jurisdiction. This is because Qiagen is a party in
privity with QNAH for preclusion purposes, the issue of
subject matter jurisdiction over the unsolicited fax claim is
common to both cases, and it is inequitable to foreclose
preclusion based on the Ninth Circuit's decision in
Van Patten v. Vertical Fitness Grp., LLC,
847 F.3d 1037 (9th Cir. 2017).
things have changed since this case was previously remanded
to Lonoke County Circuit Court. First, plaintiff has joined
QNAH's wholly owned subsidiary, Qiagen, as a defendant.
Second, plaintiff has amended its complaint to drop its
opt-out notice claim. Third, QNAH argues that a change in
Ninth Circuit case law independently forecloses issue
preclusion and judicial estoppel. See id.
than engaging in another analysis of the individual factors
for issue preclusion and judicial estoppel, the discussion
herein simply addresses these three new developments. Because
none of these changes prevents the application of issue
preclusion or judicial estoppel, defendants are still
precluded from arguing that federal jurisdiction is proper
and are bound by the prior order remanding the case to Lonoke
County Circuit Court. ARcare v. Qiagen North American
Holdings, Inc., Case No. 4:17-cv-00120-BSM, ECF No. 20
(E.D. Ark. March 2, 2017).
Addition of Qiagen as a Defendant
preclusion requires that “the party sought to be
precluded in the second suit must have been a party, or in
privity with a party, to the original lawsuit.”
Ginters v. Frazier, 614 F.3d 822, 826 (8th Cir.
2010). Defendants argue that the inclusion of Qiagen as a
defendant defeats issue preclusion because Qiagen was not a
party in the Central District of California. This argument,
however, is unpersuasive because Qiagen is a party in privity
Supreme Court has identified six instances in which a
nonparty may be in privity with a party in a prior lawsuit.
Taylor v. Sturgell, 553 U.S. 880, 893-95 (2008). One
of the factors identified in Taylor is relevant
here, namely, whether the nonparty was “adequately
represented by someone with the same interests who [wa]s a
party to the suit.” Id. at 894 (citations
omitted); see also Continental Western Ins. Co. v.
Federal Housing Finance Agency, 83 F.Supp.3d
828, 833-36 (S.D. Iowa 2015). “A party's
representation of a nonparty is ‘adequate' for
preclusion purposes only if, at a minimum: (1) the interests
of the nonparty and her representative are aligned . . .; and
(2) either the party understood herself to be acting in a
representative capacity or the original court took care to
protect the interests of the nonparty.”
Taylor, 553 U.S. at 900. Adequate representation may
also require that a nonparty had notice of the original suit.
Continental Western Ins. Co., 83 F.Supp.3d at 834.
Explicit evidence showing that the original party acted in a
representative capacity for the nonparty is unnecessary, and
it can be inferred from the party's conduct. Id.
the interests of QNAH and its wholly owned subsidiary,
Qiagen, are aligned. QNAH sought dismissal of the California
lawsuit on a number of grounds, including subject matter
jurisdiction, a failure to state a valid claim under the
TCPA, and the improper allegation of a
“fail-safe” class. ARcare, Case No.
2:16-CV-7638, ECF No. 14 (C.D. Cal. Nov. 23, 2016). Although
QNAH now argues that Qiagen was entirely responsible for
sending the faxes at issue and is the proper defendant in
this lawsuit, QNAH vigorously defended the case in the
Central District of California, seemingly on behalf of its
subsidiary, and obtained a dismissal. See Continental
Western Ins. Co., 83 F.Supp.3d at 834-35. Moreover, the
close corporate relationship between QNAH, a parent holding
company, and Qiagen, its wholly owned subsidiary, supports a
finding that their interests are extremely similar, if not
identical. See Id. Finally, that QNAH and Qiagen are
now jointly defending this case, are represented by the same
counsel, and are advancing similar arguments to those
previously raised in California further supports a finding
that the defendants' interests are aligned. See
id.; Doc. No. 14.
QNAH effectively acted as Qiagen's representative for due
process purposes. Unlike Taylor, in which the
Supreme Court rejected a theory of “virtual
representation” between two plaintiffs who “were
legal and actual strangers to one another, ” QNAH and
Qiagen are far from strangers. Continental Western Ins.
Co., 83 F.Supp.3d at 836. The preexisting legal
relationship between defendants as holding company parent and
wholly owned subsidiary, while not dispositive, weighs in
favor of finding that QNAH knowingly acted as a
representative of Qiagen in the prior case. C.f. FastVDO
LLC v. LG Electronics Mobilecomm U.S.A., Inc., Case No.:
16-cv-02499-H-WVG, 2016 WL 9526400, at *4 (S.D. Cal. Dec. 13,
2016). But see Continental Western Ins. Co., 83
F.Supp.3d at 837. Moreover, considering defendants'
near-identical interest in the outcome of the litigation and