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In some states (we’re looking at you, California) it is frightfully hard to win on fraudulent concealment removal where the plaintiff has joined an in-state distributor of a drug or medical device. In other states, defendants have more of a shot. Today’s case, Harris v. Zimmer Holdings, Inc., 2019 U.S. Dist. LEXIS 71025 (S.D.N.Y. April 26, 2019), is one of the latter. The plaintiff was an Ohio citizen who claimed personal injury from a hip implant. He filed suit in Ohio state court alleging Ohio state causes of action against diverse manufacturer defendants and against Ohio (therefore non-diverse) distributor defendants. The presence of the latter supplied the ostensible reason why the action could not be removed to federal court. Still, the defendants removed, arguing that the Ohio defendants had been fraudulently joined and that, therefore, federal diversity jurisdiction existed. The fraudulent joinder argument rested on the notion that the claims against the Ohio defendants were implausible. The removal petition was accompanied by sworn affidavits from the Ohio distributor defendants denying that they played any role in the manufacturing, labeling, or packaging of the hip implant or had knowledge of its claimed defects.

The plaintiff initially filed a motion to remand in the Northern District of Ohio. Subsequently, the action was transferred to the Southern District of New York pursuant to an order from the Judicial Panel on Multidistrict Litigation. The MDL transferee court must apply the law of the circuit in which it is located. That means that Second Circuit law controlled. So far so good. But when a defendant’s fraudulent joinder claim is premised on a failure to state a plausible cause of action – as was the case in Harris – courts apply the relevant state pleading rules. Uh oh. Unlike the heightened federal pleading standards set forth in Twombly, Ohio applies “liberal notice pleading requirements” which simply require the plaintiff to provide fair notice of the claims and the grounds upon which they rest. Double uh oh.

But it turns out that there was no reason for those uh oh’s. What were the plaintiff’s claims against the Ohio distributor defendants? Broadly stated, the plaintiff alleged that the Ohio distributor defendants failed to convey adequate warnings to the plaintiff’s doctor, and that the distributor defendants were in the business of marketing, promoting, selling and/or distributing the unreasonably dangerous medical devices. What’s more, the distributor defendants also “negligently distributed, marketed, advertised and/or promoted the dangerous medical devices.” We’re not done yet. The plaintiff also said that the distributor defendants “made negligent misrepresentations regarding the safety and efficacy of the dangerous medical devices.” One more thing: the distributor defendants “negligently failed to provide sufficient information and instructions to Plaintiffs and/or Plaintiff’s prescribing physicians.” A bit repetitive, right? These allegations cannot reside in thin air. They must be stated in the form of legal causes of action. Here, the plaintiff joined the Ohio defendants in three causes of action: (1) defective design, in violation of the Ohio Products Liability Act (“OPLA”), (2) failure to warn, in violation of OPLA, and (3) violation of the Ohio Consumer Sales Practice Act (“OCSPA”).

At this point, the plaintiff in Harris had a couple of problems. Problem 1 is that the design defect and failure to warn claims under the OPLA applies only to manufacturers unless a statutorily defined exception applies – which was not the case here. Problem 2 for the plaintiff is that the OCSPA does not apply to claims for personal injury or death, although a plaintiff may recover damages arising from bodily injury so long as the injury itself is not the basis of the OSCPA claim. Here, the plaintiff’s OSCPA claim was clearly a claim for bodily injury. The plaintiff “cannot prove that the Device had concealed ‘defects’ and ‘serious risks’ without showing the Device caused bodily injury. Here, the predominate harm which is the gravamen of this case, is the alleged physical harm associated with the Device.” The Second Circuit concluded: “Accordingly, even under Ohio’s lenient pleadings standard, Defendants have met their high burden of showing fraudulent joinder as to the Ohio Defendants.”

The plaintiff’s remand motion was denied.