IN THE U.S. DISTRICT COURT FOR THE EASTERN DISTRICT OF NORTH CAROLINA WESTERN DIVISION Civil Action No.

5:13-cv-00139

DRS. AGUERO, HUGHES & ASSOC., P.A.; BEATRIZ R. AGUERO, D.D.S. & ASSOCIATES II, P.A.; BEATRIZ R. AGUERO, D.D.S. & ASSOCIATES IV, P.A.; DRS. ALSTON, JOHAL & DUNNING, P.A.; DR. PATEL, ALSTON & ASSOCIATES I, P.A.; DRS. JOHAL, DUNNING & ASSOCIATES, P.A.; DRS. JOHAL, DUNNING & ASSOCIATES II, P.A.; DRS. JOHAL, DUNNING & ASSOCIATES IV, P.A.; DRS. JOHAL, DUNNING & ASSOCIATES V, P.A.; DRS. JOHAL, DUNNING & ASSOCIATES VI, P.A.; DRS. JOHAL, DUNNING & ASSOCIATES VII, P.A.; DRS. CAMERON & ROMAN I, P.A.; DRS. CAMERON, ROMAN & ASSOCIATES II, P.A.; DRS. CAMERON & ROMAN III, P.A.; DR. SMITH & ASSOCIATES IV, P.A.; DR. SILVOY & ASSOCIATES I, P.A.; DR. CHRISTOPHER M. SILVOY, D.M.D. & ASSOCIATES, P.A.; BENSON J. YBANEZ, D.D.S. & ASSOCIATES, P.A.; BENSON J. YBANEZ, D.D.S. & ASSOCIATES II, P.A.; and DRS. GHODKE, LINDSEY & ASSOCIATES, P.A., Plaintiffs, vs. DENTAL ONE, INC.; DENTALCARE PARTNERS, INC.; DCP OF HIGH POINT (GREENSBORO), LLC; DCP OF LEXINGTON, LLC; DCP OF GREENSBORO, LLC; DCP OF GASTONIA, LLC; DCP OF MATTHEWS (CHARLOTTE), LLC; DCP OF HUNTERSVILLE (CHARLOTTE), LLC; DCP OF CARMEL VILLAGE (CHARLOTTE), LLC; DCP OF HICKORY (CHARLOTTE), LLC; DCP OF CONCORD (CHARLOTTE), LLC; DCP OF CHARLOTTE, LLC; DCP OF FAYETTEVILLE 1 Case 5:13-cv-00139-D Document 1 Filed 02/27/13 Page 1 of 10

(RALEIGH), LLC; DCP OF HOPE MILLS (131), LLC; DCP OF RAEFORD (125), LLC; DCP OF WILMINGTON, LLC; DCP OF LELAND (WILMINGTON), LLC; DCP OF CRABTREE MALL, LLC; DCP OF DURHAM, LLC; DCP OF CARY, LLC; DCP OF JACKSONVILLE, LLC; and DCP OF MONROE (CHARLOTTE), LLC, Defendants. NOTICE OF REMOVAL Defendant, Dental One, Inc., hereby files Notice of Removal of this action from the North Carolina General Court of Justice, Superior Court Division, Wake County, to the United States District Court for the Eastern District of North Carolina pursuant to 28 U.S.C. 1331, 1367, 1441, 1443 and 1446. In support of this removal, Defendant states as follows: BACKGROUND This action is brought by a group of North Carolina dentists against out-of-state professional management companies. Each of the dentists practices has entered into management agreements with business entities in which they individually and jointly hold ownership interests along with the management company. The management arrangement previously approved by the board allows the non-clinical administrative aspects of the Plaintiffs dental practices to be managed on a day-to-day basis, leaving the professionals free to engage in the practice of dentistry. After inducing the management company to make substantial

investments in the non-clinical infrastructure necessary to operate the dental practices (such as real estate, employees, fixtures, furnishings and equipment) and after earning substantial sums in the form of distributions over the last several years, the plaintiff dentists now seek to avoid their agreements, to sue the very business ventures they jointly own with the Defendantswhich they repeatedly describe as empty shell[s], e.g., Compl. at 26and to expropriate to themselves

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the real and personal property of the management company so that they may continue in their practice unencumbered by their obligations. The crux of the complaint is that the dentists agreements with their management companiesunder which the dentists themselves have been profiting for nearly a decade or more in many casesviolate the dentists obligation to avoid engaging in the corporate practice of medicine and are unlawful. As suggested in the state court complaint, the plaintiff dentists have joined forces with and are aided in their efforts by the North Carolina Board of Dental Examiners (the Board) which has filed a separate suit in which the Board makes parallel allegations under state and federal law. The Board controls the dentists ability to practice through licensure. Although the contracts at issue call for their revision should it be necessary to address any possible legal or regulatory infringement, neither the dentist Plaintiffs nor those representing the Board have responded to multiple conciliation attempts nor have they suggested any particular change to the agreements that would allow the Plaintiffs to continue in their practice and to honor their respective obligations. Instead, they have initiated this litigation for the apparent purpose of appropriating the Defendants substantial investment in the non-clinical infrastructure. GROUNDS FOR REMOVAL 1. On or about February 18, 2013, an action was commenced against Defendants in

the North Carolina General Court of Justice, Superior Court Division, Wake County, File No. 10 CV 002407, entitled Drs. Aguero, Hughes & Assoc., P.A. et al. v. Dental One, Inc. et al. (the State Court Action).

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2.

All served Defendants were served with a copy of the Summons and Complaint

filed in the State Court Action on or after February 20, 2013. Accordingly, this Notice is timely pursuant to 28 U.S.C. 1446(b). 3. Attached as exhibits and incorporated herein by reference are copies of the state

court pleadings served on Defendants. 4. This action is one over which this United States District Court has original federal

question jurisdiction pursuant to 28 U.S.C. 1331. 5. In this action, Plaintiffs allege that Defendants pushed Arestin and thereby

caused damage to Plaintiffs. Ex. A, Compl. at 21-24. Arestin is a United States Food and Drug Administration approved drug, which was prescribed by dentists who were properly issued the authority to prescribe drugs by the United States Drug Enforcement Agency. This claim arises under federal law or necessarily requires its application and, separately, implicates the preemptive effect resulting from the Federal Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. 301, et seq and the Prescription Drug Marketing Act of 1987 (PDMA), 21 U.S.C. 353. Plaintiffs also complain of the marketing conduct of Orapharma, the manufacturer of Arestin, who, in concert with Defendants, aggressively promote the diagnoses of periodontal disease and the treatment of this disease with Arestin. This claim also arises under federal law and is explicitly preempted by the FDCA. See 21 U.S.C. 337(a). 6. Because this action arises under and relates to marketing and prescribing of a

Food and Drug Administration approved drug, Plaintiffs related claims are governed by the FDCA and the PDMA. 7. The FDCA completely preempts state law claims alleged in Plaintiffs Complaint

and provides the exclusive federal remedy for resolution of these claims by Plaintiffs.

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8.

A cause of action filed in state court that is preempted by the FDCA is removable

to federal court under 28 U.S.C. 1441 as an action arising under federal law even when the FDCA-related nature of the action does not appear on the face of the Complaint. See Metro. Life Ins. Co. v. Taylor, 481 U.S. 58 (1987). 9. Venue is appropriate in the Eastern District of North Carolina because the North

Carolina General Court of Justice, Superior Court Division, Wake County, is located within this judicial district. 28 U.S.C. 1441(a). 10. Promptly after the filing of this Notice of Removal in the United States District

Court for the Eastern District of North Carolina, Defendants will give notice of the filing of this Notice of Removal to the North Carolina General Court of Justice, Superior Court Division, Wake County, and to Plaintiffs through their attorney in compliance with 28 U.S.C. 1446(d). 11. 12. All proper Defendants consent to this removal. As explained in further detail below, this action is also properly removed under

this Courts diversity jurisdiction. 13. Furthermore, this action is one over which this United States District Court has

diversity jurisdiction under 28 U.S.C. 1332, as it is brought between citizens of different states and involves claims for damages and other relief in excess of $75,000. 14. On information and belief, and as reflected in their Complaint, each and every

Plaintiff in this action is a citizen of North Carolina. Ex. A, Compl. at 1-20. Defendant DentalCare Partners, Inc. was incorporated in Delaware, never had its principle office in North Carolina and was merged into Defendant Dental One, Inc. Defendant Dental One, Inc. is

incorporated in Delaware and maintains its principal place of business in Dallas, Texas.

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15.

The joinder of the Defendants that are LLCs in this lawsuit does not preclude

removal jurisdiction because Plaintiffs have named the LLC Defendants as parties merely to defeat diversity jurisdiction. As a result, the citizenship of the LLC Defendants should be ignored for purposes of diversity. 16. The Fourth Circuit has long recognized that improper joinder will not defeat

removal based on lack of diversity. See e.g. Hartley v. CSX Transp., Inc., 187 F.3d 422, 424 (4th Cir. 1999). Two methods exist by which to establish improper joinder: (1) actual fraud in the plaintiffs pleading of jurisdictional facts; or (2) there is no possibility that plaintiff would be able to establish a cause of action against the non-diverse party in state court. Id. 17. Here, joinder of the LLC Defendants is improper because there is no possibility

that Plaintiffs will be able to establish their claims against the LLC Defendants. 18. Plaintiffs repeatedly allege that the LLC Defendants are nothing more than a

shell and mere pass-through[s], not real entities. Ex. A. Compl. at 41. While the general rule is, for example, that a subsidiary corporation has its own principal place of business for purposes of diversity jurisdiction, that is not true where the entity is merely an alter ego or agent of the parent corporation. Shell Rocky Mountain Prod. LLC v. Ultra Resources, Inc., 415 F.3d 1158, 1162 (10th Cir. 2005) (citation omitted). Here, the Plaintiffs have alleged that the LLCs are empty shells and, as a result, the LLCs presence in this action can and should be disregarded for purposing of evaluating diversity. In all events, there is no possibility of recovery against the LLCs under any asserted cause of action, as the Plaintiffs themselves are co-owners of them and can hardly claim to have been forced into unlawful arrangements with them. 19. As such, the citizenship of the LLC Defendants should be disregarded for the If the LLC Defendants are disregarded, this Court has

purposes of determining diversity.

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diversity jurisdiction under 28 U.S.C. 1332 in that there is compete diversity of the real, non shell entities and the amount in controversy exceeds $75,000 exclusive of interest and costs. In particular, the Plaintiffs seek to recover an unspecified amount of actual damages, disgorgement, and attorneys fees, which, on information and belief, singularly and collectively, would exceed $75,000. WHEREFORE, Defendant, Dental One, Inc. hereby removes and gives notice of removal of this action from the North Carolina General Court of Justice, Superior Court Division, Wake County, to the United States District Court for the Eastern District of North Carolina. This the 27th day of February, 2013.

BY:

/s/ Mark A. Finkelstein Stephen W. Petersen NC Bar No. 23462 steve.petersen@smithmoorelaw.com Mark A. Finkelstein NC Bar No. 13187 mark.petersen@smithmoorelaw.com SMITH MOORE LEATHERWOOD LLP P O Box 27525 Raleigh, NC 27611 Telephone: (919) 755-8700 Facsimile: (919) 755-8800 Brian A. Colao TX Bar No. 00793528 bcolao@dykema.com DYKEMA GOSSETT PLLC 1717 Main Street, Suite 4000 Dallas, TX 75201 Telephone: 214-462-6400 Facsimile: 214-462-6401

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/s/ Johnny M. Loper Johnny M. Loper NC Bar No. 15533 jloper@wcsr.com WOMBLE CARLYLE SANDRIDGE & RICE, LLP 150 Fayetteville Street, Suite 2100 P. O. Box 831 Raleigh, NC 27602 Telephone: (919) 755-2116 Facsimile: (919) 755-6056 Counsel for DentalCare Partners, Inc., Dental One, Inc., and DCP Equity Partners, LLC

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CERTIFICATE OF SERVICE The undersigned hereby certifies that the foregoing NOTICE OF REMOVAL has been filed electronically with the Clerk of the Court using the CM/ECF system and duly served by depositing a copy thereof in the United States mail, first-class, postage prepaid, to the following:

Jeffrey P. Gray David S. Coats Allison P. Cooper Adam N. Olls BAILEY & DIXON, L.L.P. Post Office Box 1351 Raleigh, NC 27602 Telephone: (919) 828-0731 Facsimile: (919) 828-6592 jgray@bdixon.com dcoats@bdixon.com acooper@bdixon.com aolls@bdixon.com Counsel for Drs. Aguero, Hughes & Assoc., P.A.; Beatriz R. Aguero, D.D.S. & Associates II, P.A.; Beatriz R. Aguero, D.D.S. & Associates IV, P.A.; Drs. Alston, Johal & Dunning, P.A.; Dr. Patel, Alston & Associates I, P.A.; Drs. Johal, Dunning & Associates, P.A.; Drs. Johal, Dunning & Associates II, P.A.; Drs. Johal, Dunning & Associates IV, P.A.; Drs. Johal, Dunning & Associates V, P.A.; Drs. Johal, Dunning & Associates VI, P.A.; Drs. Johal, Dunning & Associates VII, P.A.; Drs. Cameron & Roman I, P.A.; Drs. Cameron, Roman & Associates II, P.A.; Drs. Cameron & Roman III, P.A.; Dr. Smith & Associates I, P.A.; Dr. Christopher M. Silvoy, D.M.D. & Associates, P.A.; Benson J. Ybanez, D.D.S. & Associates, P.A.; Benson J. Ybanez, D.D.S. & Associates II, P.A.; and Drs. Ghodke, Lindsey & Associates, P.A.

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This the 27th day of February, 2013.

/s Mark Finkelstein Stephen W. Petersen NC Bar No. 23462 steve.petersen@smithmoorelaw.com Mark A. Finkelstein NC Bar No. 13187 mark.petersen@smithmoorelaw.com SMITH MOORE LEATHERWOOD LLP P.O. Box 27525 Raleigh, NC 27611 Telephone: (919) 755-8700 Facsimile: (919) 755-8800

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