It is a truism in product liability matters that plaintiffs love state courts, whereas defense lawyers and our clients much prefer federal court. There are reasons for this. Twombly and Iqbal pleading standards are more rigorous than the pleading standards in many state courts. Federal judges often have fewer cases and more clerks than state judges. Federal preemption plays better in federal court. Less chance the client or the defense lawyers will be hometowned in federal court. And so, on this blog, we talk about removal a lot.
Plaintiffs always get the first move in the “which court will decide the case” chess match, as they get to choose where they file the lawsuit.
Sometimes, if the complaint reveals the diversity jurisdiction requirements are (or arguably are met), defendants get a second move, and can remove the case to federal court.
Defendants don’t always get that second move in pharmaceutical and medical device product liability cases, however. If the plaintiff adds medical malpractice claims against the prescribing physician or another health care provider, chances are that defendant is a citizen of the same state as the plaintiff and diversity is destroyed.
But sometimes, defendants can manufacture a second move for themselves nonetheless. They might try a snap removal. Or try to find a federal officer somewhere buried in the complaint. Or they might argue fraudulent joinder.
Daniel v. Biomet Orthopedics, Inc., No. 24-444-SDD-EWD, 2025 U.S. Dist. LEXIS 53120 (M.D. La. Mar. 3, 2025), affirmed by 2025 U.S. Dist. LEXIS 50018 (M.D. La. Mar. 19, 2025), is a variation on the fraudulent joinder approach that we have written about before.
In the March 3rd Daniel opinion, a Magistrate Judge issued a report and recommendation on plaintiffs’ motion to remand a product liability case to Louisiana state court. The plaintiff named a device manufacturer on product liability claims, and the non-diverse defendant was a Louisiana pathology group allegedly liable for spoliation of the medical device after explant.
The defendants removed the case to the Middle District of Louisiana on diversity grounds and argued that the pathology group was an improperly, or fraudulently, joined defendant and thus did not count in determining whether complete diversity existed.
In the Fifth Circuit, a district court can disregard the citizenship of a local defendant for purposes of deciding diversity jurisdiction pursuant to 28 U.S.C. § 1332(a) in two circumstances:
(1) actual fraud in the pleading of jurisdictional facts, or
(2) inability of the plaintiff to establish a cause of action against the non-diverse party in state court.
The question in Daniel was of the second type: Whether plaintiff’s claim of intentional spoliation against the pathology group was governed by the Louisiana Medical Malpractice Act (LMMA) and if so, whether plaintiffs’ failure to follow the LMMA’s pre-lawsuit, medical review panel requirement prohibited their claim against it.
The Magistrate Judge properly dug in on the language of the LMMA (which applies to any “unintentional tort or breach of contract” involving a health care provider and patient) as well as plaintiffs’ allegations (seeing through the claim that the spoliation was “intentional”).
She concluded that because the plaintiffs needed to comply with the LMMA’s medical review process in order to bring a spoliation claim against the pathology group but had not done so, they had failed to satisfy a procedural prerequisite and were unable to establish a cause of action against that non-diverse party.
The Magistrate Judge thus recommended that the plaintiffs’ motion to remand be denied due to improper joinder, and that the non-diverse pathology group defendant be disregarded for diversity purposes and dismissed from the case to boot.
The Magistrate Judge’s Report and Recommendation then went to the district court judge for review, and resulted in the March 19th Daniel affirmance and order effectuating the recommendations.
So, tuck Daniel away in your mental filing cabinet. Someday, should you find yourself litigating in a state with medical malpractice pre-lawsuit requirements and facing a lawsuit in which the plaintiff has named a non-diverse health care provider, take a deeper look. If the plaintiff has not complied with the medical malpractice pre-suit requirements and those requirements are mandatory and necessary prerequisites, a fraudulent joinder removal just may work.