(This post is from the Cozen side of the blog only.)
Whenever you remove a complaint that is an obvious case of fraudulent joinder, you think to yourself, “Why don’t they just admit it?” “They” being the plaintiffs’ lawyers, and the admission being that they joined the hometown doctor or pharmacy or sales rep solely to defeat diversity jurisdiction and remain in state court. If you’re feeling particularly frustrated, you may bemoan the fact that they don’t further admit that they’re hoping that the state court will treat their claims and clients more leniently than a federal court would.
You’re certain of all of this. But you’re equally certain that the plaintiff’s lawyers would never admit it.
Or would they?
Let’s reset. Say you’re a defense lawyer in the Reglan/metoclopramide litigation. Your client has just been sued. The plaintiff named a treating doctor as a defendant too. The presence of the doctor as a defendant defeats diversity jurisdiction. You know the plaintiff’s lawyer is trying to advance a broader tactic of expanding the “innovator liability” holding from the Conte California case to other state courts. He doesn’t believe that the treating doctor actually did anything wrong. He believes that your client misled the doctor. Yet he named the doctor anyway because that keeps the case in state court.
That scenario oozes fraudulent joinder. Wouldn’t it be great to have the plaintiff’s lawyer admit all this? Maybe in an email, and maybe more succinctly than we just explained it. How’s this:
I was planning on filing new cases in state courts with physician defendants in order to get the Conte v. Foster question presented to a number of State Supreme Courts. . . . [The treating doctor] knows that I believe that your clients are principally responsible for misleading physicians.
That’s real. It was included in an email from a plaintiff’s lawyer to, it seems, defense lawyers. The email is reproduced in its entirety in a recent report from a magistrate in the District of Nebraska recommending denial of the plaintiffs’ remand motion and dismissal of the doctor defendant. King v. Pfizer, Inc., 2013 U.S. Dist. LEXIS 181702, at *15-17 (D. Neb. Nov. 26, 2013).
Doesn’t that feel better? There’s an almost rewarding glow surrounding those words, something that can only come from the revelation of an unspoken truth.
We may never see something like that in print again, particularly given its effect in this particular case. In the least, we may never see it in correspondence to a defense lawyer. There’s a chance that similar statements could be discovered in a plaintiff’s lawyer’s letter to a treating doctor produced from the doctor’s files, or from the doctor’s testimony at a deposition. Or maybe it would be in a letter to the doctor’s lawyer, though we’d have to remember to request those. Or maybe never again. But at least it’s happened once.
Now, the plaintiff’s tried to exclude this email, arguing that it was part of settlement discussions. The court held that it wasn’t. More important, FRCP 408 only prohibits the use of such statements “either to prove or disprove the validity or amount of a disputed claim or to impeach by a prior inconsistent statement or a contradiction.” As the court put it, “Rule 408 does not prohibit this court from considering the [plaintiff’s lawyer’s] email to determine jurisdictional issues.” Id. at *18. Just as courts have used settlement discussions to determine the amount in controversy, they can use them to determine whether a doctor defendant was properly joined:
Additionally, courts have used compromise offers, negotiations, and settlement demands to establish the amount in controversy required for federal diversity jurisdiction. See McPhail v. Deere & Co., 529 F.3d 947, 956 (10th Cir. 2008) (“[S]ettlement documents] demonstrate plaintiff’s own estimation of its claim [and] are a proper means of supporting the allegations in the notice of removal, even though they cannot be used to support the ultimate amount of liability.”); Groeneweg v. Flint Hills Res., 2008 U.S. Dist. LEXIS 93723, 2008 WL 4951494, at *2 (D. Minn. Nov. 18, 2008); Wang v. Pac. Cycle, Inc., 530 F. Supp. 2d 1048, 1051 (S.D. Iowa 2008) (“As a general matter, settlement demands are relevant evidence of the amount in controversy if it appears to reflect a reasonable estimate of the plaintiff’s claim.”) (internal quotation omitted). If courts are permitted to consider settlement communications to establish the amount in controversy, as a logical extension, this court is permitted to consider the [plaintiff’s lawyer’s] email to determine whether the parties are properly joined.
Id. at *19-20.
Now, this email may have been enough for the magistrate to find that the case is properly in federal court. But it certainly helps if the complaint’s allegations also suggest that there is no viable claim against the doctor. And that’s how the complaint in King read. It made only two specific allegations against the doctor – he prescribed the metoclopramide, and he was misinformed about its side effects. Id. at *30-32. It also alleged that the defendants hadn’t given doctors sufficient information about metoclopramide. Id. at *8. The court, implicitly employing a TwIqbal-like standard, found these allegations lacking:
None of the facts or allegation in the Kings’ complaint against [the doctor] are specific; instead they are absent or conclusory. . . . . Because the Kings do not provide factual support, the court is not convinced the Kings have a reasonable basis to impose liability on Dr. Scott under state law.
Id. at *32-33.
Having put a check mark in the deficient factual allegations category, the court went back to the plaintiff’s lawyer’s email. That ended it:
In addition to conclusory allegations against [the doctor] and the absence of facts, when the [plaintiff’s lawyer’s] email is read in conjunction with the Kings’ complaint, the reason for [the doctor’s] joinder is clear to the court: the Kings want to avoid federal court and possible dismissal of brand-name drug manufacturers to have the innovator liability theory addressed in state courts. . . . The Kings improperly joined a non-diverse defendant, Dr. Scott, without alleging a reasonable basis to impose liability under state law and for the purpose of defeating federal diversity jurisdiction. Therefore, such claim should be dismissed and the motion to remand denied.
Id. at *33.
The truth will set you free, or something like that.