Last week, the Judge in the Biomet hip implant MDL denied a plaintiff’s motion for remand, upholding Biomet’s fraudulent joinder argument based on Maryland’s “sealed container doctrine.” Laughlin v. Biomet, Inc., 2016 WL 626514 (N.D. Ind. Feb. 17, 2016). The plaintiff made defect claims against not only Biomet, Inc., the manufacturer, but also the local distributor of the device. The purpose was clear. The local distributor, like the plaintiff, was a Maryland citizen, and so its presence as a defendant would defeat diversity and prevent removal to federal court.
But distributors in Maryland have a defense to product liability claims under Maryland’s sealed container doctrine if they received the product in a sealed container, did not know and could not reasonably have known of the defect, and did not manufacture, design or alter the product. Id. at *2 (citing Md. Code Ann., Cts. & Jud. Roc. §5-405(b)). So, when Biomet removed the case to federal court, it submitted a declaration from the distributor with testimony establishing all these elements of the sealed container doctrine. Id. at *3. And that was enough.
Plaintiff certainly had an opportunity to challenge the declaration and present evidence that the sealed container doctrine did not apply. But she failed to do so. She did argue, however, that the distributor did in fact know that the device was defective. But argument is not enough. She presented no supporting evidence, by declaration or otherwise, and she didn’t allege in her complaint that the distributor knew of the alleged defect. Id.
Plaintiff also tried a couple of legal arguments to get around the sealed container doctrine. For instance, she argued that the sealed container doctrine applies only to damage “caused by the defective design or manufacture of a product,” and so it didn’t apply to her failure to warn claim. That’s wrong. A failure to warn claim is a creature of a design defect claim. The warning is considered part of the product and defective if inadequate. Id. at *2. She also cited a number of decisions that she claimed were persuasive, but only one that addressed Maryland law. And that decision, issued in a Biomet case by the United States District Court for the District of Maryland, did not mention the sealed container doctrine or indicate that the complaint had the same deficiencies as the Laughlin complaint. The Court rejected this argument too. Id. at *4.
And so the Laughlin complaint is now in federal court to stay.
The Laughlin decision is important. It did something rare. It allowed a fraudulent joinder removal based on the sealed container doctrine. That’s an important step, and it provides an important precedent.
But there may also be an important practice tip here. The MDL judge made this decision, not the local federal judge from Maryland. If you believe that the MDL judge for your particular mass tort is pre-disposed to rule favorably on fraudulent joinder removals, consider not only removing the complaint, but also taking immediate steps, if any are available, to expedite its transfer to the MDL under a tag-along procedure. Getting the right judge on a fraudulent joinder remand motion can be the whole ball game.