Devore v. Howmedica Osteonics Corp.

• Decision Date: 28 September 2009
• Docket Number: Case No. 3:09-cv-690-J-32HTS.
• Citation: 658 F.Supp.2d 1372
• Parties: Teresa DEVORE, Plaintiff, v. HOWMEDICA OSTEONICS CORPORATION, a New Jersey corporation d/b/a Stryker Orthopaedics; Orthopedic Solutions, Inc., d/b/a Stryker South Florida Agency, Defendants.
• Court: U.S. District Court — Middle District of Florida

Page 1372

658 F.Supp.2d 1372

Teresa DEVORE, Plaintiff, v. HOWMEDICA OSTEONICS CORPORATION, a New Jersey corporation d/b/a Stryker Orthopaedics; Orthopedic Solutions, Inc., d/b/a Stryker South Florida Agency, Defendants.

Case No. 3:09-cv-690-J-32HTS.

United States District Court, M.D. Florida, Jacksonville Division.

September 28, 2009.

Douglass A. Kreis, Neil Duane Overholtz, Aylstock, Witkin, Kreis & Overholtz, PLLC, Pensacola, FL, for Plaintiff.

Francis M. McDonald, Jr., Sarah A. Long, Carlton Fields, PA, Orlando, FL, for Defendants.

ORDER

TIMOTHY J. CORRIGAN, District Judge.

This case is before the Court on plaintiff Teresa Devore's Motion to Remand for lack of complete diversity and insufficient amount in controversy. (Doc. 4). Defendants Howmedica Osteonics Corporation d/b/a Stryker Orthopaedics ("HOC") and Orthopedic Solutions, Inc. d/b/a Stryker South Florida Agency ("Orthopedic Solutions") oppose remand on the grounds that Devore has both understated her damages demand and fraudulently joined Orthopedic Solutions for the purpose of circumventing removal. (Doc. 17).

I. Background

On January 29, 2009, Devore, a Florida citizen, filed suit in state court against HOC, a New Jersey corporation with its principal place of business in New Jersey, and Orthopedic Solutions, a Florida corporation with its principal place of business in Florida. (Doc. 1 ¶¶ 4, 9, 10). HOC is a manufacturer of hip prostheses, including the "Trident Ceramic Acetabular System" ("Stryker Trident"). (Doc. 2 ¶ 4). Orthopedic Solutions is a distributor of HOC products within the territory of South Florida. (Doc. 17 at 4). It does not distribute HOC products in North Florida. Id. at 11.

In her complaint, Devore alleges that on December 14, 2004, a Styker Strident hip prosthesis manufactured by HOC was implanted in Devore's right hip. (Doc. 2 ¶ 17, 18). Within two months of implantation, the device failed, causing Devore injury.¹ Id. ¶¶ 20, 21. Devore contends that both defendants: i) are strictly liable for her injuries due to the defective design and manufacture of the prosthesis; ii) breached both express and implied warranties regarding the safety and quality of the product; iii) breached their duty of care by the negligent design, manufacture, and provision of warnings regarding the product; and iv) deceptively and unlawfully induced Devore to purchase the defective prosthesis in violation of Florida's Deceptive Trade and Unfair Trade Practices Act ("FDUPTA"), Fla. Stat. §§ 501.201 et seq. Id. ¶¶ 27-66. While Devore does not assert that Orthopedic Solutions directly supplied the allegedly defective product to her, she contends that the company is a properly joined defendant due to its engagement in "the retailing, distributing, marketing, and/or supplying [of the subject medical device], either directly or indirectly, to members of the general public within the State of Florida, including [Devore]." Id. ¶ 5. The complaint alleges damages in excess of $15,000, the state court jurisdictional threshold.

On May 27, 2009, HOC served Devore with Damages Interrogatories asking her to admit or deny that the damages she sought would exceed the federal diversity jurisdiction threshold of $75,000.² Devore responded on June 26, 2009 that she could not deny that claimed damages would exceed $75,000 because she intended to seek "the maximum amount of compensation which the jury may award based on the facts of her case."³ Id. On July 24, 2009, HOC and Orthopedic Solutions filed a notice of removal to this Court (Doc. 1), contending that federal jurisdiction is proper because i) Devore's responses to the interrogatories established that the amount in controversy is greater than $75,000, and ii) the presence of Orthopedic Solutions, as a fraudulently joined defendant, does not defeat diversity jurisdiction.

Regarding fraudulent joinder, defendants provided the affidavit of Gordon Ballard, Director of Distribution for HOC. (Doc. 1, Ex. 4). Ballard's affidavit identifies the particular Stryker Trident implanted in Devore's hip, and states that a review of the invoice and distribution documentation for the subject device "establishes conclusively that Orthopedic Solutions, Inc., d/b/a Stryker South Florida Agency did not participate in any way in the sale or distribution of the subject device." Id. ¶ 4. Ballard's statements are supplemented by exhibits purportedly tracking the subject device from HOC's Cork, Ireland manufacturing facility to its New Jersey headquarters, after which it was shipped directly to an HOC warehouse facility in Jacksonville, Florida.⁴ (Doc. 1, Ex. 4 ¶ 5). From there, Ballard contends (and HOC provides documentation to support) that the subject device was sent to Flagler Hospital pursuant to a requisition request, where it was implanted in Devore's hip by her surgeon, Dr. James Grimes, on December 14, 2004.

On July 29, 2009, Devore moved to remand the case to state court, arguing that she had met her burden of demonstrating "even a possibility" of a valid claim against Orthopedic Solutions and that the defendants had failed to establish beyond "mere conclusory allegations" that the amount in controversy was greater than $75,000. (Doc. 4 at 3, 10). Devore's motion offers no rebuttal to Ballard's affidavit or the documentation supporting it, other than to note that the Southern District of Florida had rejected defendants' attempted removal of a matter allegedly involving similar claims.⁵ Devore also restates her contention that Orthopedic Solutions was properly joined because the company was "involved extensively in the Stryker Trident's promotion, distribution, supply and sale throughout Florida and specifically related to the device ultimately sold and implanted into [Devore]." Id. at 8. As to the question of jurisdictional amount, Devore contends that defendants' only support for their argument that damages exceed $75,000 is a "misrepresentation of [Devore]'s responses to Interrogatories," as she "responded directly and by incorporation that she was unable to make such assertion but rather `seeks the maximum amount of compensation which the jury may award based on the facts of her case.'" Id. at 3, 10.

On August 19, 2009, HOC and Orthopedic Solutions filed a response to Devore's motion, which proffers further documentation in support of removal. (Doc. 17). One such document is the affidavit of Rosemarie Morisco, HOC's Senior Director of Sales Operations/Finance (Doc. 17, Ex. D), in which Morisco stated that she had reviewed the exclusive agency agreements governing the relationship between HOC and Orthopedic Solutions, and that those documents "conclusively show[ ] that Orthopedic [Solutions] was not authorized to conduct business in or compensated for business generated in areas of Florida other than those listed in the agreements," with the listed territory being "limited to South Florida."⁶ Id. ¶ 7. Further, Morisco stated that "[since 2002], the territory described as North Florida, including St. John's County specifically, was exclusively covered by [HOC] directly." Id. ¶ 8.

To rebut Devore's assertions regarding claimed damages, Defendants also provide a presuit demand letter dated February 22, 2007 from Devore's counsel⁷ to HOC. (Doc. 17, Ex. F). The letter estimates that a jury verdict in Devore's favor could be expected to approximate $646,009.66, comprised of: (1) Medial Bills (Past): $101,009.66⁸; (2) Intangible Damages (Past): $120,000; and (3) Intangible Damages (Future): $425,000. Id. at 5. The letter closes with the following: "[p]lease note that the above total does not include any amounts for the future medical expenses [Devore] is certain to incur for treatment of her ongoing, permanent injuries. A significant award of future medical expenses will likely drive [Devore]'s future intangible damages even higher!" Id. (emphasis in original).

II. Discussion

A. The Law of Fraudulent Joinder

A defendant may remove a civil case from state to federal court if the federal court has original jurisdiction. 28 U.S.C. § 1441(a). For a federal court to have original jurisdiction over a case alleging only state law claims, as here, there must be complete diversity and the threshold amount in controversy. 28 U.S.C. § 1332(a). To satisfy the diversity requirement for removal jurisdiction, "no defendant can be a citizen of the state in which the action was brought." Tillman v. R.J. Reynolds Tobacco, 253 F.3d 1302, 1305 (11th Cir.2001) (citing 28 U.S.C. § 1441(b)).

The doctrine of fraudulent joinder provides an exception to this diversity of citizenship requirement. Tran v. Waste Mgmt., Inc., 290 F.Supp.2d 1286, 1292 (M.D.Fla.2003). A plaintiff cannot defeat removal to federal court by joining a non-diverse defendant with no true connection to the controversy. Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97, 42 S.Ct. 35, 66 L.Ed. 144 (1921). Where a defendant is found to be fraudulently joined, its citizenship is not considered for the purposes of determining whether complete diversity exists. Henderson v. Washington Nat'l Ins. Co., 454 F.3d 1278, 1281 (11th Cir.2006).

The burden of proving fraudulent joinder rests on the removing party, Tran, 290 F.Supp.2d at 1293, and is a "heavy one." Pacheco de Perez v. AT & T Co., 139 F.3d 1368, 1380 (11th Cir.1998). A defendant must show by clear and convincing evidence that "there is no possibility that the plaintiff can prove a cause of action against the resident defendant."⁹ Henderson, 454 F.3d at 1281. "[T]he district court must evaluate the factual allegations in the light most favorable to the plaintiff and must resolve any uncertainties about state substantive law in favor of the plaintiff.... The federal court makes these determinations based on the plaintiff's pleadings at the time of removal; but the court may consider affidavits and deposition transcripts submitted by the parties." Crowe v. Coleman, 113 F.3d 1536, 1538 (11th Cir.1997) (internal...