Many plaintiffs’ counsel prefer to litigate cases in state court.

(Film at 11!)

Thus, to avoid having product liability cases removed to federal court on the basis of diversity jurisdiction, plaintiffs sometimes include in their complaints medical malpractice claims against treating physicians. The plaintiffs and their treaters are often from the same state, which means there’s no diversity of citizenship and no opportunity for the out-of-state drug company to remove the case to federal court.

Any case that helps drug companies avoid that result is worth a minute’s thought.

Joseph v. Baxter Int’l, Inc., No. 1:08HC60053, 2009 U.S. Dist. LEXIS 40504 (N.D. Ohio May 13, 2009), falls into that category. There, the Joseph family ultimately sued Baxter (the out-of-state drug company) and some healthcare providers (the in-state defendants whose presence might preclude removal) for Merline Joseph’s death, which was allegedly caused by her ingestion of tainted Heparin.

The Josephs originally filed a complaint in Louisiana state court that named only Baxter in product liability counts. “Hours before Baxter filed its initial notice of removal, the Josephs amended their complaint to add the Healthcare Defendants.” Id. at *2-*3. The healthcare defendants did not join in the removal.

The Judicial Panel on Multidistrict Litigation then transferred the case from the Western District of Louisiana to the Northern District of Ohio, where the Heparin MDL proceeding was pending. Chief Judge Carr, of the N.D. Ohio, decided plaintiffs’ motion to remand.

According to Judge Carr, “Baxter . . . correctly asserts that under Rule 21 of the Federal Rules of Civil Procedure, I can retain jurisdiction by severing claims against nondiverse dispensable defendants.” Id. at *5. The judge concluded that “the Healthcare Defendants are not necessary parties as the resolution of a claim agains them would not necessarily resolve the Josephs’ claim against Baxter.” Id. at *7. “[M]edical malpractice allegations differ from the Josephs’ product liability claim which focuses on Baxter’s conduct in designing, manufacturing, labeling and recalling tainted Heparin.” Id. If the Josephs’ claims were severed and remanded, leaving the product liability claims against Baxter in federal court, “the Josephs retain an adequate remedy against the Healthcare Defendants as they can proceed with their claims in state court.” Id. at *9.

Although this result would force the Josephs to fight a two-front war — one in state court against the med mal defendants, and one in federal court against Baxter — Judge Carr found no undue prejudice there: “One reason is that settlement, which is not an uncommon occurrence in litigation such as this, is probably more likely where this case is one among many [in a federal MDL proceeding]. Even if this case, indeed, does not settle, the plaintifffs will benefit from the MDL process: they will not bear the burden of having to engage on their own, and at their sole expense, in discovery vis-a-vis Baxter.” Id. at *9-*10.

“I, therefore, find the Healthcare Defendants to be dispensable parties, sever them from the claims against Baxter, and in doing so, perfect diversity jurisdiction over Baxter.” Id. at *11. Judge Carr thus severed and remanded the med mal claims and denied plaintiffs’ motion to remand as to Baxter. Id. at *15.

We’ll raise three questions here for you to ponder:

1. Does this result apply only where the defendant removed before it was aware that the healthcare providers had been named as defendants?

2. Does this precedent permit removal by an out-of-state drug company if a state court severs med mal from products cases?

3. Are all federal courts empowered to sever med mal cases from product liability cases and thus to retain jurisdiction over the product case, or is this authorized only where a bunch of federal cases are already pending in an MDL?

We’d love to ruminate about those questions for you, but we’re not sure that we could honestly provide pro-defense answers to all three questions, and, as you know, we strive not to write anything here that might later be cited against our clients.

So think hard about those issues, and always consider the possibility of filing somewhat aggressive notices of removal.

In the end, if you’re really stuck (and you’re representing a product liability defendant), just give one of us a call. We’re always happy to help others who labor in support of our mutual cause.