A recent pelvic mesh case in the District of Maryland, Sullivan v. Calvert Memorial Hospital, No. PJM 14-118, Memorandum Opinion (D. Md. July 30, 2015), offers an interesting and useful take on federal jurisdiction when plaintiffs name local doctors as co-defendants. You know the drill. In order to manipulate the forum and avoid removal jurisdiction in a case against an out-of-state product manufacturer, plaintiffs will sometimes join a local doctor as a co-defendant. One response could be to remove the case to federal court on the basis that the local doctor was fraudulently joined, a strategy that is legally sound and often successful when dealing with intermediaries in the chain of distribution, such as distributors and pharmacies. Those kinds of defendants do not owe independent duties to plaintiffs and have zero involvement in the design, manufacturing, and labeling of drugs and medical devices (setting aside the potentially vexing issues presented by 3D-printed medical devices, but that is a topic for another day.) Their citizenship therefore should be disregarded.
Fraudulent joinder with doctors is more complicated because doctors obviously do owe duties of care to their patients, so we tend to approach cases involving doctors also from the point of view of fraudulent misjoinder. Under fraudulent misjoinder, the defendant argues that the federal court should disregard the citizenship of the local or non-diverse co-defendant because the claims against that defendant are distinct from the product liability claims against product manufacturer. The case most often cited as the landmark for fraudulent misjoinder is Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353, 1360 (11th Cir. 1996)), and as the argument goes, product liability claims on the one hand are based on facts and law different from medical malpractice claims on the other hand. It is as though two different lawsuits were improperly joined under one caption, which gives the district court discretion to disregard the citizenship of the non-diverse or local doctors and retain federal diversity jurisdiction. (We discussed severance of malpractice claims from product liability claims here, although not in the context of federal jurisdiction.)
Some courts have been slow to adopt fraudulent misjoinder, sometimes citing Tapscott as a minority rule and often ignoring Tapscott altogether. And that is where Sullivan v. Calvert comes in. In Sullivan, the plaintiff’s surgical team allegedly left a piece of a catheter in the plaintiff’s bladder during a procedure to insert a transvaginal sling. Op. at 2. The Maryland plaintiff therefore sued multiple Maryland healthcare providers alleging medical malpractice for leaving the catheter behind, but she also separately pleaded product liability claims against the transvaginal sling manufacturer. Id. at 3.
The sling manufacturer defendants – none of whom were citizens of Maryland – removed the case to federal court based on diversity jurisdiction, but they did not argue only that the doctors had been fraudulently misjoined. They argued also that the claims against the doctors should be severed under Federal Rule of Civil Procedure Rule 21, which says that a “court may at any time, on just terms, add or drop a party” and “may also sever any claim against a party.” Once severed, the obviously diverse claims against the product manufacturers would clearly belong in federal court. We explained that here, discussing another case invoking Rule 21 to preserve federal jurisdiction.
The difference between the two arguments is subtle, but it made a difference for this district court, which proceeded under Rule 21 without addressing fraudulent misjoinder. Id. at 9 n.4. We knew the order was headed in the right the direction when the district court started with this standard:
The Court has discretion, under Federal Rule of Civil procedure 21, to drop nondiverse parties to achieve complete diversity. That discretion is guided by consideration of whether dismissal of the nondiverse party or parties will prejudice any of the parties remaining in the case, and whether the presence of the nondiverse party provides a tactical advantage for one party.
The . . . Sixth Circuit has further undertaken this prejudice analysis by determining whether the party sought to be severed is a necessary and indispensable party under Federal Rule of Civil Procedure 19. If the party is found to be necessary, then diversity remains incomplete and the case must be remanded to state court
Id. at 4-5 (citations omitted). This is as direct a statement that we have seen on this topic, and it is imminently quotable.
The district court then applied this standard to sever the claims against the Maryland healthcare defendants and retain jurisdiction over the product liability claims. First, severing the claims caused the plaintiff no prejudice. The plaintiff contended that each set of defendants could point to the “empty chair” if the claims were not kept together, but the district court easily dismissed that argument on the basis that the claims were completely different. As the court put it, the plaintiff “has not plausibly alleged . . . any way in which the . . . TVT sling is causally connected to the injury caused by the catheter.” Id. at 6.
Second, the Maryland healthcare defendants were not necessary parties to any claims the plaintiff was making against the product manufacturers. In so finding, the court reasoned that while the claims “against the Maryland Healthcare Defendants may involve the same physical object that is the source of the products liability claims against the [Manufacturer] Defendants, the medical negligence claims against the Maryland Healthcare Defendants involve legal standards and factual inquiries distinctly different from the products liability claims against the [Manufacturer] Defendants.” Id. at 6-7. Saying that claims are “distinctly different” is sort of like saying things are “similarly similar” or “colorfully colorful,” but we get the point. To refer back to our own gloss on such cases, these were two different controversies joined somewhat arbitrarily under one caption. This quote nicely sums it up:
Sullivan’s medical negligence claims against the Maryland Health Defendants hinge on whether they deviated from the standard of care of healthcare professionals in selecting the sling and implanting it during the surgery. Her products liability claims against the [Manufacturer] Defendants turn on whether those defendants, at an earlier point in time, improperly designed, manufactured, tested, advertised, and gave directions regarding use of the sling. These standards of care and the deviation from same are different and distinct from one another. As a result, the Court has the authority to sever the claims against the two groups of defendants.
We would quibble with the suggestion that a medical device manufacturer owes a duty to test and “give directions,” but aside from that, we like this quote a lot because it applies so broadly: In most every medical device case, the question of medical malpractice is factually and legally different from issues of product defect, making such claims severable, including to preserve federal jurisdiction.
The court closed by noting that severance was particularly appropriate because it would permit the product liability claims to be transferred to one of the pelvic mesh MDLs currently pending in the Southern District of West Virginia. As the court observed, “Forcing the [Manufacturer] Defendants to litigate TVT claims in state courts throughout the country whenever and wherever the claims might be joined to claims against healthcare providers . . . would defeat the entire purpose of the MDL.” Id. at 9. We get the point here, too.
Thanks to Richard Dean at Tucker Ellis for send this order our way. We commend it to our readers as a sound and interesting authority on federal jurisdiction.