Plaintiffs will go to great lengths to stay out of federal court, including naming local defendants against whom the plaintiffs have no real intention of pursuing the lawsuit with even a smidgen of seriousness. Sometimes that is called "improper joinder," but we prefer the term "fraudulent joinder" because that more accurately captures what is afoot. Why dress up an ugly reality with euphemisms? It is terribly easy for plaintiffs to lob in a local defendant and terribly hard for defendants to satisfy the test typically employed by courts for fraudulent joinder – whether the defendants meet the burden of showing that there is no reasonable basis for recovery against the local defendant. In short, fraudulent joinder is terrible and plaintiffs often get away with it.
But the plaintiffs did not get away with it in In re Taxotere Prods. Liab. Litig., 2020 WL 598043 (E.D. La. Feb. 7, 2020). Plaintiffs in the Taxotere MDL claim that a cancer drug caused permanent hair loss. A group of 16 California plaintiffs contrived to stay out of the federal MDL by filing a lawsuit in Los Angeles County (a delightful place for plaintiffs, and not just because of the splendid weather and Langer's Delicatessen) against the out of state manufacturers and an in-state distributor.
The manufacturers removed the case to federal court and sought transfer to the MDL. The plaintiffs, not surprisingly, filed a motion to remand the case to the state court. The issue was whether the distributor had been fraudulently — or, if you are squeamish, improperly – joined. The federal court begins by invoking a "Rule 12(b)(6)-type analysis" to see whether the complaint stated a claim against the in-state defendant. But the court also says it can "pierce the pleadings" and consider summary judgment-type evidence as to "discrete facts that would determine the propriety of joinder." That last bit gladdens our scurvy, defense-hack heart and prompts us to dream up motions setting forth how the particular plaintiff attorneys have a history of dropping local defendants (doctors, distributors – whoever) on the eve of trial. But maybe the court isn't contemplating that sort of thing. As we said, we were dreaming.
But what the Taxotere court did was pretty good — maybe even "woke," in the parlance of the young-uns. (Okay, we don't really know what that means. We are profoundly unwoke.) The complaint alleged that the distributor was a supplier of the drug, but did not allege that it was the exclusive supplier. The fact is that the plaintiffs did not allege that the in-state distributor supplied the medicine that was actually administered to any of the plaintiffs. The best that the plaintiffs could do was allege that the distributor distributed to an infusion facility where one of the plaintiffs was treated. That allegation falls short of the mark. Even that one plaintiff could not establish product identification. "Without more, none of these sixteen plaintiffs have asserted plausible claims" against the in-state distributor. Absent any plaintiff with a plausible claim against the distributor, that in-state defendant could be ignored and diversity jurisdiction therefore existed.
The plaintiff tried to escape this pleading/factual deficiency by citing a prior Taxotere remand order. But in that prior case relied on by the plaintiff, medical records explicitly established that a plaintiff received medicine supplied by the in-state distributor. That factual scenario satisfied the lenient test for joinder. But at least now we know there are limits.
This article is presented for informational purposes only and is not intended to constitute legal advice.
