Photo of Steven Boranian
We have removed more cases to federal court than we can count, and we have argued that local and/or non-diverse defendants have been fraudulently joined until we are blue in the face. We have never fully understood why many plaintiffs obsessively avoid federal court, but we do know that their most common tactic is to name a local distributor or sales representative as a defendant in order to defeat complete diversity or to ensure there is a local defendant on the pleadings. It is a transparent and unjustifiable attempt to manipulate the forum, and we push back at every opportunity to protect a defendants’ right to remove.   And we have been right every time.  That is not to say that we always win. We acknowledge that courts do not always agree with us and that federal courts remand cases from time to time, even when non-diverse co-defendants have been joined fraudulently. At bottom, however, there is no excuse for naming defendants against whom there is no potential liability distinct from that of the product manufacturer and against whom the plaintiffs have absolutely no intention of actually proceeding. That sort of abuse is why the fraudulent joinder doctrine exists. 
The court’s order in Zaite v. Long, No. 3:13-cv-60021, 2013 U.S. Dist. LEXIS 147302 (S.D. Ill. Oct. 11, 2013), offers a cautionary tale of how a federal court can determine that there is no complete diversity, even when it appears that no legitimate state law claim lies against a local pharmaceutical sales representative. In Zaite, a Nevada-resident sued a prescription drug manufacturer in Nevada state court alleging that the product caused an increased risk of bleeding. However, in order to create the appearance that the parties’ citizenship was not completely diverse, she named the manufacturer’s Nevada-based sales representative as a defendant. The defendant manufacturer removed the case to federal court anyway on the basis that its citizenship was diverse from the plaintiff and that the Nevada sales representative’s citizenship should be ignored because she was fraudulently joined. Id. at **2-3. The case then was transferred to the Pradaxa MDL in the Southern District of Illinois, where the plaintiff moved to remand the case back to state court. 

As far as fraudulent joinder removals are concerned, this one looks particularly solid. The plaintiff alleged that the sales representative had marketed the product to her physician. Id. at *4. But as is typical with prescription drug sales representatives, the representative did not actually sell or even handle the product that the plaintiffs had allegedly used, which presumably was purchased through a pharmacy. The representative likewise had no involvement in preparing the FDA-approved prescribing information (including the warnings) that accompanies all prescription drugs. The representative could not have altered or supplemented that information, and there is no allegation that she did.

Moreover, the district court itself acknowledged that Nevada law does not necessarily support a claim against sales representatives. The court correctly restated its responsibility under Erie to “predict the state supreme court’s most likely decision on questions of law that are presented.” Id. at **4-5. The court went on, however, to say that “whether a sales representative may be subject to liability has not been definitively decided by Nevada courts.” Id. at *5. In other words, the law may—or may not—support a claim, and as we have said before, federal courts making Erie predictions should not reach out to create new bases for liability. Uncertainty in such situations should counsel caution, and here it seems that the admitted uncertainty in the law should have tipped the scale against recognizing that liability might exist.

The district court nonetheless remanded, citing other cases issuing similar rulings, and one that did not. Id. at **5-6. As we said at the outset, we appreciate that this sometimes happens, but we still believe that courts should apply the fraudulent joinder doctrine more consistently to stop the sort of forum manipulation that occurred in Zaite and that is common in drug and medical device litigation. Perhaps product manufacturers should also take measures to make it more plain that sales representatives and distributors do not and should not bear liability in pharmaceutical and medical device litigation. Perhaps conduct discovery to establish more strongly that the sales representative or distributor had no involvement with the particular product at issue, the particular plaintiff, or the particular plaintiff’s alleged injuries. Perhaps companies should employ sales representatives that live in states other than where they do business when geography permits (Nevada sales representatives based in, for example, South Lake Tahoe, California). We realize that this last idea may be contrary to a manufacturer’s business needs, but the principal reason sales representatives are sued in drug and medical device cases is to defeat diversity of citizenship, so maybe it is worth considering. Food for thought.