ROBERT L. MILLER, Jr., District Judge.
Lori Ann Davis filed suit in Maryland state court against defendants Biomet Inc. and Biomet Orthopedics, LLC (collectively Biomet) and Mid Atlantic Medical, LLC (Mid Atlantic), alleging negligence, failure to warn, breach of express warranty, breach of implied warranty, fraud, fraudulent misrepresentation, intentional misrepresentation, fraudulent concealment, violations of the Maryland Consumer Protection Act, and civil conspiracy, all relating to the alleged failure of her Biomet M2a-Magnum hip implant. The defendants removed the case to the District of Maryland based on diversity of citizenship, and the Judicial Panel on Multidistrict Litigation transferred the case into the Biomet multi-district litigation docket in this court.
This matter is before me on Ms. Davis's motion to remand her case to the Circuit Court of Baltimore City, Maryland, where the action originated. For diversity purposes, plaintiff Lori Davis and defendant Mid Atlantic are citizens of Maryland; the Biomet defendants are citizens of Indiana. The defendants removed this case to federal court based on their claim that the citizenship of Mid Atlantic should be disregarded for diversity purposes because Ms. Davis can't prevail on any of her claims against Mid Atlantic and Mid Atlantic was fraudulently joined solely to defeat diversity. Ms. Davis counters that Mid Atlantic is a proper defendant, so complete diversity is lacking and remand is proper. Ms. Davis also asks that she be awarded attorneys' fees for the costs she has incurred in opposing Biomet's removal of this case to federal court.
For a federal court to have jurisdiction over a suit based on diversity, there must be complete diversity of citizenship — no defendant may share the citizenship of any plaintiff. 28 U.S.C. § 1332(a). A plaintiff can't fraudulently join a non-diverse defendant solely for the purpose of destroying diversity jurisdiction.
The fraudulent joinder analysis requires a court to determine whether the plaintiff would have any reasonable possibility of success against the non-diverse defendant under applicable state law.
Biomet maintains joinder of Mid Atlantic was fraudulent. According to Biomet, even though distributors and sales representatives are subject to liability in Maryland product liability cases, Ms. Davis's claims against Mid Atlantic are defeated by an exception to that general rule: Maryland's "sealed container doctrine." That doctrine, codified in the Maryland Courts and Judicial Proceedings Code, provides that "[i]t shall be a defense to an action against a seller of a product for property damage or personal injury allegedly caused by the defective design or manufacture of a product" if the seller
MD. CODE ANN., CTS. & JUD. PROC. § 5-405(b). The sealed container defense is unavailable if any of the following exceptions apply:
MD. CODE ANN., CTS. & JUD. PROC. § 5-405(c).
Biomet relies on the declaration Brett Shoop, the principal for Mid Atlantic Medical, LLC, Defts. Exh. B (Shoop Dec.), to support its position that Mid Atlantic's distribution of Biomet implant products falls within Maryland's sealed container doctrine and that no exceptions to the defense apply. Mr. Shoop reports the following: Mid Atlantic is an independent contractor sales representative for Biomet that played no role in the design, manufacture, development, testing, packaging, or labeling of Biomet orthopedic implants, Shoop Dec., ¶¶ 2, 17; Mid Atlantic receives implants from Biomet that are labeled, packaged, and sealed by Biomet before the products are shipped to Mid Atlantic, Shoop Dec., ¶ 8; Mid Atlantic representatives don't alter the packaging, labels, or implants in any way while they have the sealed packages, Shoop Dec., ¶ 10; and Mid Atlantic representatives don't inspect or examine the implants or remove them from their packaging before an implant procedure. Shoop Dec., ¶ 11. According to Mr. Shoop, "Typically, Mid Atlantic simply hands the unopened box containing the requested implant to the circulating nurse in the same packaging in which it was shipped to Biomet. The surgical staff typically opens the box and removes the implant from the box and the internal packaging using special procedures to maintain the sterility of the implant." Shoop Dec., ¶ 11.
Mr. Shoop says Mid Atlantic received no complaints about the Magnum device before Ms. Davis's September 15, 2008 surgery, Shoop Dec., ¶ 16, and didn't know or have reason to know of any defects in the product or deficiencies in the warning labels, Shoop Dec., ¶ 12. Mr. Shoop says, too, that Mid Atlantic "never made any representations or statements or provided any express or implied warranties regarding any Magnum device to any physician, including plaintiff's surgeon, or any member of the public, including Ms. Davis," Shoop Dec., ¶ 14, and neither he nor any Mid Atlantic representative had any direct dealings or communications with Ms. Davis. Shoop Dec., ¶ 14. Biomet maintains Mr. Shoop's declaration establishes that the sealed container defense applies to Ms. Davis's claims against Mid Atlantic based on its distribution of Biomet implants and none of the statutory exceptions bar the applicability of that defense.
Ms. Davis disagrees. She asserts that even though Mr. Shoop stated that neither Mid Atlantic nor any of its representatives change Biomet's packaging or labeling of the implants while the sealed packages are in their possession, he didn't address a number of the activities she has alleged Mid Atlantic representatives to have undertaken — i.e., actively promoting and marketing the Biomet Magnum device to surgeons, surgical groups, hospitals, surgery centers, and end users; educating surgeons about the Biomet Magnum device and training them on the proper use of the tools necessary to implant the Magnum device; training physicians and surgeons on the selection of complementary components to Biomet's Magnum device; and answering surgeons' questions, preoperatively and intraoperatively, about the Biomet Magnum device — activities Ms. Davis says put Mid Atlantic and its representatives in a position to know or learn of defects in the Magnum device and to make express warranties and misrepresentations to physicians, including her own surgeon, and other healthcare providers about the Magnum device.
Ms. Davis says, too, that Mr. Shoop's declaration says nothing about another relevant issue: that Mid Atlantic representatives provide direct service to doctors and other healthcare providers, both inside and outside the operating room, during the implanting of Biomet's Magnum devices. Ms. Davis alleges that a Mid Atlantic employee was present during her initial procedure when she received a Biomet Magnum device and also during her revision procedure. As Ms. Davis notes, "[i]t is unlikely that [Mr.] Shoop can speak on behalf of the knowledge held by all of [Mid Atlantic's] current and former employees with regard to [their] activities and individual personal knowledge of Biomet Magnum hip implants . .., or can encapsulate what was said by those employees in their various contacts with doctors, hospitals, and other medical personnel." Reply, at 6. Ms. Davis claims that by providing advice and assistance to surgeons during hip replacement procedures involving Biomet Magnum devices, Mid Atlantic employees are in a position to make warranties and/or misrepresentations about Biomet products, an issue Mr. Shoop didn't address.
Ms. Davis also alleges that because studies had taken place and reports had been published before her surgery, Mid Atlantic knew or could have known of the risks associated with the Magnum device. Ms. Davis cites to studies and publications that include Adverse Event Reports submitted to the FDA and specific medical journal articles that all raised concerns about an unreasonably high risk of injury posed by Magnum-styled implants many years before her receipt of a Biomet Magnum device. Ms. Davis alleges that because Mid Atlantic and its representatives received continuous training and detailed product information from Biomet about the Magnum devices, Mid Atlantic and its representatives knew or could have known about the Biomet product defects.
Lastly, Ms. Davis says Mr. Shoop's declaration statements stand in contrast to pleadings Biomet filed in other cases, specifically noting a 2007 action Biomet filed in this court against three of its former distributors to enforce a non-compete clause. In
Compl. [docket # 1 in Cause No. 3:07-CV-346], ¶¶ 12-13. While Biomet complains that the
While a court can consider affidavits and other evidence in ruling on a motion to remand, the permissible evidence is limited to "uncontroverted . . . evidence which establishes unmistakably that a diversity-defeating defendant cannot possibly be liable to a plaintiff under applicable state law."
Resolving all issues of fact and law in favor of Ms. Davis, I conclude that Biomet hasn't met its heavy burden of showing that there is no reasonable possibility that Ms. Davis could succeed on her claims against Mid Atlantic. The allegations of Ms. Davis's complaint, if proven, could show that Mid Atlantic knew or could have known that the Magnum device was defective, removing Mid Atlantic from the protection of the sealed container doctrine, and/or that Mid Atlantic representatives made warranties, the breach of which caused Ms. Davis's injuries. Thus, Mid Atlantic wasn't fraudulently joined, jurisdiction in this court isn't proper under 28 U.S.C. § 1332, and Ms. Davis's motion for remand will be granted.
Because Ms. Davis states a claim such that Maryland law might impose liability on Mid Atlantic under the facts alleged, I needn't address the other issues raised by the parties, i.e., whether Mid Atlantic could be held liable for fraud, civil conspiracy, or a violation of the Maryland Consumer Protection Act.
Ms. Davis has requested, pursuant to 28 U.S.C. § 1447(c), that she be awarded the fees she incurred in opposing Biomet's removal of this case to federal court. Plaintiffs are entitled to attorneys' fees in removal cases "only where the removing party lacked an objectively reasonable basis for seeking removal."
Biomet didn't carry its burden of establishing that Ms. Davis had no possibility of recovery against Mid Atlantic, but its bases for removal weren't objectively unreasonable. See
Ms. Davis has alleged a claim that isn't clearly barred by Maryland's sealed container doctrine, so Mid Atlantic's joinder wasn't fraudulent, diversity of citizenship isn't complete, and this court lacks subject matter jurisdiction over the claims of Ms. Davis's complaint. The court, therefore, GRANTS Ms. Davis's motion to remand [docket # 11], DENIES her request for fees, and ORDERS this action REMANDED to the Circuit Court of Baltimore City, Maryland for further proceedings.
SO ORDERED.