Photo of Stephen McConnell

We get the feeling that if we hang around the Timberlake case long enough, we’ll eventually encounter every nook and cranny of drug and device law. In one prior post we discussed the plaintiff’s misbegotten effort to sue doctor-entrepreneurs who formed the company that researched and developed the ProDisc. In another we praised the court for being “in sync” with sound preemption principals.

The latest opinion, Timberlake v. Synthes Spine, Inc., 2011 U.S. Dist. LEXIS 70894 (June 30, 2011), involves another plaintiff, Scott, so we’ll leave off with the Justin Timberlake references. Scott’s case was dismissed for lack of joinder of an indispensable party. The analysis isn’t especially intricate or astonishing, but it forces us to add a new topic to our list so we’re pretty darn excited about the case. (Yes, the life of a law-nerd can be empty and stultifying.)

Ms. Scott was implanted with a ProDisc in Germany in 2006. She complained that the ProDisc failed and had to be removed by a surgeon in Los Angeles in 2007. She sued a couple of Synthes entities located in the United States, but did not sue Synthes Haegendorf GmbH and Synthes GmbH, companies in Germany and Switzerland “responsible for the design, manufacture, sale, distribution, labeling, marketing, and foreign approval of Ms. Scott’s ProDisc.” Timberlake, 2011 U.S. Dist. LEXIS 70894 at * 4. Defendants argued that because Scott failed to join those two foreign Synthes entities, and because the court lacked jurisdiction over them such that they cannot be joined, Scott’s claims must be dismissed.

Fed. R. Civ. P 12(b)(7) permits a party to move for dismissal on the grounds of failure to join a party as required by Rule 19. A person or entity is a necessary party if, in their absence, (1) complete relief cannot be accorded among those already parties, or (2) an existing party would be impaired in its ability to protect its interest or would be subject to risk of multiple or inconsistent obligations. Fed. R. Civ. P. 19(a). If a party is, indeed, necessary, and if it cannot be joined, the court must determine “whether, in equity and good conscience, the action should proceed among the existing parties or should be dismissed.” Fed. R. Civ. P. 19(b). Normally that “equity and good conscience” stuff makes us duck our heads, but it works out pretty well here.

Ms. Scott’s ProDisc was designed and manufactured by the foreign Synthes entities, not the ones she sued. There has never been a direct connection between the sued and unsued Synthes entities. There is actually quite a bit of law to the effect that foreign subsidiaries responsible for “the design, manufacture, sale, distribution, labeling, marketing, and foreign approval of foreign products are necessary parties in product liability actions involving such foreign products.” Id. at * 7 (citing cases). That makes sense. And it applies here. So the foreign Synthes companies are “parties whose joinder would be necessary if feasible under Rule 19(a).” Id.

Is their joinder feasible? It is not. The German and and Swiss Synthes entities have no presence in “the United States or the State of Texas.” Id. at *10. (It almost sounds as if the United States and Texas are two separate countries, doesn’t it? Which is how it feels sometimes, right? Remember, Sam Houston has one of the two* gaudiest resumes in American history because he was a U.S. Senator, Governor of two different states, a victorious general, the subject of the largest free-standing statue in the USA, the name-giver of a city with lots of people and plaintiff lawyers, and President of a foreign country — the Republic of Texas.) As a general rule, personal jurisdiction over a nonresident corporation cannot be premised solely upon the forum’s contacts with an affiliated corporation. Id. (citing cases). Scott certainly didn’t rebut the presumption of independence of related corporate entities.

Now we’re down to the issue of indispensability. The court supplies this helpful, quotable rule: “In product liability actions, the absence of a foreign manufacturer or distributor over which a court lacks jurisdiction generally requires dismissal.” Id. at *12. Here, the German and Swiss entities “were responsible for the design, manufacture, sale, distribution, labeling, marketing, and foreign approval of Ms. Scott’s ProDisc.” Id. at *14. By contrast, the sued Synthes entities’ “business activities are limited to the FDA-approved ProDisc in the United States, and … were in no way responsible for Ms. Scott’s European ProDisc.” Id. Obviously, the foreign entities have a strong interest in any legal determinations regarding the ProDisc devices they made, sold, etc., and the local, sued Synthes entities cannot adequately represent those interests. Thus, if the action went forward, the foreign Synthes entities would be prejudiced. Dismissing the action does not prejudice Ms. Scott, because she has an adequate remedy by proceeding against the foreign entities in Germany or Switzerland. Id. at *15.

We hear the German and Swiss legal systems are pretty good. And the beer and/or fondue is even better. Talk about an indispensable party!

* William Howard Taft’s resume is also impressive. Feel free to send along other suggestions.