Not to over-generalize, but older people have been known to break their hips. Based on anecdotal evidence, broken hips hurt more than stepping on a broken bottle or a sea urchin during a tropical vacation. Based on more than anecdotal evidence, product liability plaintiff lawyers prefer state courts over federal courts. This is because of various factors that, they think, make the state courts more likely to impose pain, and impose a lot of pain, on the defendants. We have posted on many cases discussing the strategies used by product liability plaintiffs to stay out of federal court. These cases often come up in the posture of a motion to remand by the plaintiff after the defendant has removed under 28 U.S.C. § 1446. If the case can be transferred to an MDL court—potentially well-versed in the anti-removal strategies—before a ruling on the motion to remand, then the chance of the case staying put tends to go up.
In Millman v. Biomet Ortho., Inc., No. 3:13-CV-77 RLM-CAN (N.D. Ind. Dec. 10, 2013), and Akin v. Stryker Corp., Civ. No. 13-1811 (DWF/FLN) (D. Minn. Dec. 12, 2013), we have decisions on motions to remand from two different MDL courts on two different cases involving two different hip replacement implantable medical devices. We also have two different results, although both are good.
In Millman, plaintiffs (patient and spouse) sued the Indiana-based manufacturer of the product at issue in Cook County, Illinois, state court, which just happens to be a fairly plaintiff-friendly jurisdiction. To help keep the case there, the plaintiffs also sued an Illinois-based distributor and one of its employees. Defendants removed the case anyway and it was transferred to the MDL court 100 miles away before the motion to remand was heard. As you would expect, the basic question was whether distributor and its employee had been fraudulently joined, which turns on whether there is “any reasonable possibility” that plaintiff could prevail against the non-diverse defendants under the claims asserted. The first claim, strict liability, was rejected fairly easily because Illinois has a Distributor Statute that limits when a distributor can be sued for strict liability over a product it distributed and plaintiff did not plead to the statute’s requirements. In response to the distributor’s affidavit specifying who made the product and that it did not participate in the design or manufacture of the product or create any defect in it during distribution, plaintiffs came forward with nothing specific. They did come forward with a creative argument that dismissal of a non-diverse defendant under the Distributor Statute still defeats diversity because the distributor can be added back under certain circumstances. While creative, this argument was not novel and had been rejected by other courts. “To allow the conditional nature of a § 2-621 dismissal to defeat diversity jurisdiction in all cases where a distributor is nondiverse would change the Poulos ‘reasonable possibility’ test into an ‘any possibility’ test.” Whelchel v. Briggs & Stratton Corp., 850 F. Supp. 2d 926, 934 (N.D. Ill. 2012). Besides, plaintiffs did not allege they had a legal basis for bringing the distributor back in.
By contrast, plaintiffs’ negligence claim was based on some allegations of conduct that might have created some duty running from the distributor to the plaintiffs, even though Illinois law generally places such duties solely on the physician who prescribes a medical device.
Plaintiffs claimed that the distributor took on duties by distributing information created by the manufacturer to the hospital where the device at issue was implanted. They also claimed that the presence of the distributor’s employee—the one who was also sued—in the operating room during the implant procedure created some duties owed to the plaintiffs. However, they failed to allege facts to support the existence of a duty or breach by the distributor, so their negligence claim fell too. The allegation that the presence during the implant surgery of a “sales rep” of either the manufacturer or a distributor somehow creates liability for that rep and her employer is not uncommon in cases involving implantable medical devices. Its rejection in a case where the rep and distributor were likely only sued to defeat diversity—it is not called fraudulent joinder for nothing—is reassuring. If plaintiffs cannot get past fraudulent joinder, then they should have little hope of getting past tougher hurdles.
The plaintiff in Akin did a better job of pleading, so that the MDL court hearing his motion to remand had to go a step further. Plaintiff had not just sued the manufacturer of his hip implant in California state court—another jurisdiction considered infernally plaintiff-friendly by some—but had sued two entities associated with the hospital where he had his implant surgery. Applying the Eighth Circuit’s standard for assessing fraudulent joinder—described variously as “if the plaintiff’s claim against an in-state defendant has no chance of success” and “whether there is a reasonable basis for predicting that the state’s law might impose liability against the defendant”—the court gave the plaintiff the benefit of the doubt that his allegations against all defendants about knowledge of defects in the product and misrepresentations about it were enough to get create some chance of recovery against the hospital defendants.
Thus, there was no fraudulent joinder.
We suspect that the court paid scant attention to whether there were actual plausible factual allegations about the hospital defendants and to the impact of a pending motion to amend the complaint because it knew what it was doing with fraudulent joinder’s pal misjoinder.
Misjoinder sometimes comes up with a bunch of plaintiffs thrown together in one case. That is basically why there is a CAFA. But it can also come up because a plaintiff is asserting separable cases against different defendants. In an interesting procedural posture—recall that this was plaintiff’s motion to remand—the court considered the manufacturer’s request to sever the case against the hospital defendants under Fed. R. Civ. P. 21 and then grant plaintiff’s motion to remand as to that case only. We have touched on this before. Fed. R. Civ. P. 20(a)(2) allows joinder based upon the familiar standard of whether liability against the defendants is based on “the same transaction, occurrence, or series of transactions or occurrences” and whether “any question of law or fact common to all defendants will arise in the action.” Even though the complaint apparently did not set out different allegations as to the manufacturer and the hospital defendant, the court used its common sense to determine that these standards were not met. Claims against the hospital defendants would “require evidence regarding Plaintiff’s care, treatment, and services provided by [them] and representations made related thereto” and claims against the manufacturer “will require evidence as to the development, manufacture, and testing of [the product] as well as the [manufacturer’s] knowledge, warnings, and disclosures regarding risks associated with its purportedly defective hip replacement products.” Liability against one defendant would not establish liability against another, so the cases were properly severed. That allowed the court to grant plaintiff’s motion to remand as to the hospital defendants but deny it as to the manufacturer. We suspect that the prospect of proceeding in two cases simultaneously in courts 1500 miles away from each other was not the sort of pain that plaintiff expected and the defendants who were not fraudulently joined will soon not be defendants at all.