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Things are often done differently down in Louisiana.  For one thing, Louisiana is the nation’s only civil law state.  It’s also the only state not to have enacted the Uniform Commercial Code.  We blogged about one such difference before – the state’s unique claim for “redhibition.”  Today we’re examining another Louisiana legal peculiarity.  This peculiarity makes it easier to remove Louisiana cases to federal court.

It involves the Louisiana medical malpractice statute, and is exemplified by two recent cases we ran across – although we’ve been aware of this quirk since our Bone Screw days.  The new cases are Arnold v. DePuy Orthopaedics, Inc., 2014 U.S. Dist. Lexis 56519 (N.D. Ohio April 23, 2014), and Scales v. DePuy Orthopaedics, Inc., 2014 U.S. Dist. Lexis 56490 (N.D. Ohio April 23, 2014).  Both of these cases involved Louisiana plaintiffs claiming injury from the defendant’s hip implant.  In both cases they had joined medical malpractice claims against local Louisiana physicians and/or hospitals with their product liability claim against the out-of-state manufacturer.

Both Arnold and Scales were removed to federal court.  The plaintiffs apparently did not move to remand, given the definitive trend in the law discussed below, and both cases were transferred to the relevant MDL.  In the MDL the medical malpractice defendants moved to dismiss.

Ordinarily, if a product liability plaintiff wants to run the risk of antagonizing the same medical providers whose testimony is likely to be critical on issues like the learned intermediary rule and causation, s/he can defeat diversity by asserting medical malpractice claims, as was done in Arnold and Scales.  As long as such claims assert medical malpractice – and not some bogus supplier strict liability theory – in most states they will meet the rather minimal fraudulent joinder standards for pleading a “colorable” cause of action, and thereby prevent successful removal.

Not in Louisiana – at least recently − so defense counsel need to be attuned to this possibility.

Medical malpractice actions in Louisiana are governed by statute, La. Rev. Stat. §§1299.41, et seq.  The relevant part of the statute for this discussion is §40:1299.47, concerning medical review panels.  Subsection 40:1299.47(B)(1)(a)(I) provides:

No action against a health care provider covered by this Part, or his insurer, may be commenced in any court before the claimant’s proposed complaint has been presented to a medical review panel established pursuant to this Section.

Louisiana courts have interpreted “may not be commenced in any court” to mean that, unless and until a medical review panel has completed its review in a given case, it is not possible under Louisiana law to sue a health care provider for medical malpractice.  LeBreton v. Rabito, 714 So. 2d 1226, 1230 (La. 1998) (“this provision requires that a patient ‘must provoke a medical review panel and receive an opinion from it before he can file suit in a court of law’”) (quoting Everett v. Goldman, 359 So.2d 1256, 1263 (La. 1978)).  See Todd v. Angelloz, 844 So. 2d 316, 318-20 (La. App. 2003) (if a “claimant’s proposed complaint has not been first presented to a medical review panel, an exception of prematurity must be sustained, and claimant’s district court claim must be dismissed”).

Thus, the medical malpractice statute precludes any action against any healthcare provider to which it applies until the condition precedent (panel review) is complied with.  The MDL court in Arnold and Scales therefore considered the joinder of the physician and hospitals in those actions to be “premature.”  Accordingly, the actions against the malpractice defendants were dismissed without prejudice:

Following a decision by the review panel, [plaintiff] will then decide whether or not to file a malpractice action. . . .  Because Plaintiff has failed to comply with the administrative requirements of the Louisiana Medical Malpractice Act, Defendants. motions to dismiss are granted without prejudice.

Arnold, 2014 U.S. Dist. Lexis 56519, at *5-6; accord Scales, 2014 U.S. Dist. Lexis 56490, at *5.

We mentioned “bogus” strict liability theories against healthcare providers above.  Well, the plaintiffs in Arnold and Scales asserted those, too.  It didn’t help them avoid the statute.  Arnold, 2014 U.S. Dist. Lexis 56519, at *6; accord Scales, 2014 U.S. Dist. Lexis 56490, at *5.  That’s been tried before and failed − plaintiffs can’t avoid the statute by asserting claims against healthcare providers that purportedly sound in strict liability.  “Malpractice includes a health care provider’s strict liability for some defective items used during the course of a patient’s treatment; i.e., defective blood, tissues, transplants, drugs, medicine, and prosthetic devices.”  Rogers v. Synthes, Ltd., 626 So. 2d 775, 777 (La. App. 1993) (emphasis added).  Cf. Silvestrini v. Intuitive Surgical, Inc., 2012 WL 380283, at *6-7 (E.D. La. Feb. 6, 2012) (same result with respect to claim for “ordinary negligence”; any claim related to the plaintiff’s medical treatment is covered by the statute).

Critical for our interest in the details of Louisiana medical malpractice law, under several fact patterns premature joinder of medical malpractice defendants protected by the review panel provisions of the Louisiana statute has been held to be “fraudulent,” thereby establishing diversity jurisdiction in federal court, notwithstanding the presence of non-diverse healthcare provider defendants.  Historically, the easiest pattern for defendants to obtain this result (a finding of fraudulent joinder) is where the plaintiff sues only the diverse product liability defendants – as the express terms of the statute demand − but asserts, after removal, that s/he also intends to join non-diverse medical malpractice defendants at some unclear later time.  That doesn’t work.

[T]he fact is, in this case, the only defendants named are diverse.  Complete diversity exists, the petition for removal was timely filed, the jurisdictional threshold is met, and this court has subject matter jurisdiction.  Diversity is considered between the parties to the action only, not unnamed parties. That those unnamed parties may someday be named as defendants is speculative.

Harris v. Brecher, 2007 WL 1296349, at *1 (W.D. La Apr. 13, 2007).  “A possible future destruction of diversity, even by the promised later addition of an indispensable party, is not a proper ground for remand.”  McQuiston v. Boston Scientific Corp., 2008 WL 104210, at *1 (W.D. La Jan. 9, 2008); accord Marcel v. Rehabcare Group, Inc., 2008 WL 4657258, at *3 (E.D. La. Oct. 20, 2008); Oiler v. Biomet Orthopedics, Inc., 2003 WL 22174285, at *5-6 (E.D. La. Sept. 17, 2003); Donaldson v. Spinal Concepts, Inc., 2003 WL 21913704, at *3 (E.D. La. Aug. 6, 2003), reconsideration denied, 2003 WL 22175986 (E.D. La. Sept. 19, 2003); Audrisch v. Ethicon, 2002 WL 32151749, at *2 (W.D. La. April 11, 2002); Lillie v. Wyeth-Ayerst Laboratories, 1994 WL 532091, at *1 (E.D. La. Sept. 26, 1994); Maquar v. Synthes Ltd. (U.S.A.), 1992 WL 111199, at *1 (E.D. La. May 14, 1992).

Another fact pattern favorable to removal (but a lot less common) is where the plaintiff settles with the medical malpractice defendants during the pendency of a review panel’s activity under §40:1299.47.  Erdey v. American Honda Co., Inc., 96 F.R.D. 593, 598 (M.D. La. 1983).  Settlements, unlike contested dismissals, are “voluntary” acts by plaintiffs that eliminate nondiverse parties from consideration.  Id. at 598-99.  The same is true of voluntary dismissals made under threat of a motion to dismiss for prematurity.  Denton v. Critikon, Inc., 781 F. Supp. 459, 460-61 (M.D. La. 1991).

The most common pattern, and the one over which there was – used to be, anyway – the most controversy, involved cases where the plaintiff violated the Louisiana medical malpractice statute and sued healthcare reporters in the initial complaint.  Some Louisiana courts, prior to 2006, used to remand such cases.  That happened to us in Bone Screw.  We always viewed that as a questionable result, since it effectively rewarded plaintiffs for breaking the state’s rules.

That’s now changed.  More recent decisions, following analogous Fifth Circuit precedent from 2005 and later, have since then virtually unanimously found fraudulent joinder because:  (1) the defendant simply can’t legally be sued at the time of removal, and (2) that is the only time at which removal is supposed to be judged:

Although [plaintiff] cites a long line of cases in the Eastern District of Louisiana which have held that a remand is not premature, recent 5th Circuit cases hold that where a plaintiff has failed to satisfy statutory administrative requirements before bringing suit against certain defendants, those defendants are improperly joined.  See Holder v. Abbott Labs, Inc., 444 F.3d 383, 387-88 (5th Cir. 2006), and Melder v. Allstate Corp., 404 F.3d 328, 332 (5th Cir. 2005).  Thus, [plaintiff] may eventually have a viable claim against [the physician], but at this time [he] is improperly joined.

Jones v. Centocor, Inc., 2007 WL 4119054, at *1 (E.D. La. Nov. 15, 2007).  See Butler v. Louisiana State University Health Sciences Center, 2012 WL 7784402, at *4 (Mag. W.D. La. Nov. 19, 2012) (relying on Holder and Melder), adopted, 2013 WL 1180873 (W.D. La. March 20, 2013); Voorhies v. Administrators of Tulane Educational Fund, 2012 WL 1672748, at *6 (E.D. La. May 14, 2012) (same); Taylor v. Ochsner Clinic Foundation, 2011 WL 6140885, at *4 (E.D.La. Dec. 9, 2011) (same); Garcia v. Covidien, Inc., 2011 WL 4550809, at *2 (E.D. La. Sept. 28, 2011) (repudiating prior opinion in Ohler v. Purdue Pharma, L.P., 2002 WL 88945 (E.D. La. Jan. 22, 2002), in light of Holder and Melder); Pardo v. Medtronic, Inc., 2010 WL 4340821, at *2 (E.D. La. Oct. 26, 2010) (relying on Holder and Melder); Fontenot v. Johnson & Johnson, 2010 WL 2541187, at *9 (Mag. W.D. La. Apr. 30, 2010), adopted, 2010 WL 2541178 (W.D. La. June 17, 2010) (same); Senia v. Pfizer, Inc., 2006 WL 1560747, at *2-3 (E.D. La. May 23, 2006) (same).  See also Harden v. Field Memorial Community Hospital, 265 F. Appx 405, 409 (5th Cir. 2008) (also affirming fraudulent joinder where administrative requirement not followed).

Other courts have denied remand in this situation (plaintiff improperly naming healthcare providers) by refusing to speculate on what might happen in the future, given that the validity of removal is to be determined as of the date of removal:

At the present time, the plaintiffs do not have a right to pursue a claim in any court against [the physician], and this action may well be concluded before such a right accrues.  In addition, if a medical review board finds no wrongdoing on the part of the physician, the plaintiff may choose not to pursue the physician in litigation.  On the other hand, if the medical review panel finds wrongdoing on the part of the physician, the physician may well choose to enter into a settlement with a plaintiff without the necessity of further litigation.  Thus, it is speculative to assume that the physician, who is not presently subject to suit, will later be joined as a defendant in this action.  Finally, the propriety of removal is to be judged as of the time of the removal, not as of some future time.

Bourne v. Eli Lilly & Co., 2005 WL 2998914, at *2-3 (Mag. W.D. La. Nov. 8, 2005), adopted, 2006 WL 273614, at *2 (W.D. La. Jan. 31, 2006).

The cases which hold that a premature medical malpractice claim against a non-diverse, in-state defendant does not deprive the court of diversity jurisdiction are persuasive because they correctly apply the plain language of the [Louisiana statute].  Whether a plaintiff who is currently proceeding before medical review panel pursuant to the [statute] may later allege and prove a medical malpractice claim in a state or federal court case is not relevant to the determination of diversity jurisdiction at the time of removal.  Rather, what is critical is whether, at the time of removal, the plaintiff can commence an action against the health care provider under state law.

Ellis v. Ethicon, Inc., 2010 WL 1251640, at *3 (M.D. La. 2010).

If the rule were such that defendants are not improperly joined and the suit is remanded, then a plaintiff who has joined such defendants in violation of Louisiana’s procedural rules is rewarded with his choice of forum.  To the contrary, under existing jurisprudence and reasoning, if a plaintiff properly follows Louisiana’s procedural rules under the [statute], and does not immediately join the resident medical providers in the state court suit, the lawsuit is subject to removal and a federal court forum as only diverse defendants are present.

Fontenot, 2010 WL 2541187, at *9.  Accord Sons v. Medtronic Inc., 2012 WL 6628871, at *1 (W.D. La. Dec. 18, 2012) (“because a claim filed against a physician defendant prior to the completion of the medical review panel procedure was premature and subject to dismissal, the physician defendant’s presence must be disregarded for the purposes of determining diversity jurisdiction”); Silvestrini, 2012 WL 380283, at *5; Daniels v. Touro Infirmary, 2011 WL 6140869, at *2 (E.D. La. Dec. 9, 2011); Dyson v. Advanced Bionics, L.L.C., 2011 WL 6294314, at *3 (Mag. M.D. La. Nov. 22, 2011), adopted, 2011 WL 6259937 (M.D. La. Dec. 15, 2011); Bush v. Thoratec Corp., 2011 WL 5038842, at *6 (E.D. La. Oct. 24, 2011); Esposito v. Ethicon, Inc., 2011 WL 2883067, at *3-4 (Mag. M.D. La. June 13, 2011), adopted, 2011 WL 2883342 (M.D. La. July 15, 2011); Malbroux v. American Medical Systems, Inc., 2011 WL 2148417, at *3-5 (W.D. La. May 31, 2011); Owens v. Ethicon, Inc., 2010 WL 3172737, at *1 (M.D. La. Aug. 11, 2010); Valence v. Jefferson Parish Hospital Service No. 2, 2008 WL 1930524, at *2 (E.D. La. May 1, 2008); In re Baycol, 2003 WL 24232801, at *2 (D. Minn. Aug. 29, 2003) (“there is no dispute that at the time of removal, proceedings before the Louisiana Medical Review Panel had arguably just commenced.  Thus, it is clear that at the time of removal, defendants’ exception of prematurity would have to be sustained, and the cases against the physicians dismissed.”); Carter v. Warner-Lambert, 2001 U.S. Dist. Lexis 23993 at *5 (W.D. La. June 29, 2001) (remand denied as plaintiff had failed to present claim to medical review panel); Boxie v. Gate Pharmaceuticals, 1999 U.S. Dist. Lexis 23150 at *8 (W.D. La 1999) (same).

As we’ve noted, other, a number of older decisions are contrary.  As is our practice, we aren’t doing the other side’s research for them, so we’re not citing those cases, which appear to be superseded anyway.  Just know that the current vitality of these older cases is extremely questionable, even if they don’t yet bear red flags.

Another problematic fact pattern is where medical malpractice defendants were improperly sued, but were dismissed in state court via a “dilatory exception of prematurity” (such a charming phrase) in state court and thereafter removed.  See Touriac v. Chenevert, 2012 WL 4471143. At *3 (W.D. La. Sept. 26, 2012) (denying remand where defendant’s dismissed in state court); Cooper v. Sofamor, Inc., 1993 WL 17634, at *1 (E.D. La. Jan. 15, 1993) (same).  Again, however, the law is not uniformly favorable, but the same issues of failure to exhaust mandatory state administrative requirements would likewise seem to apply.

Back when we were removing Bone Screw cases, we were just as likely to lose as win.  Now, however, the law has taken a decidedly more favorable turn, so we recommend removing Louisiana cases whenever the only non-diverse defendants are improperly joined medical malpractice defendants.