Hilyard v. Medtronic, Inc.

• Decision Date: 08 May 2014
• Docket Number: Case No. 4:13–CV–2059 CEJ.
• Citation: Hilyard v. Medtronic, Inc., 21 F.Supp.3d 1012 (E.D. Mo. 2014)
• Parties: Veronica HILYARD, Plaintiff, v. MEDTRONIC, INC., et al., Defendants.
• Court: U.S. District Court — Eastern District of Missouri

21 F.Supp.3d 1012

Veronica HILYARD, Plaintiff

v.MEDTRONIC, INC., et al., Defendants.

Case No. 4:13–CV–2059 CEJ.

United States District Court, E.D. Missouri, Eastern Division.

Signed May 8, 2014.

Matthew C. Casey, Casey and Devoti, St. Louis, MO, for Plaintiff.

Martin J. Buckley, Buckley and Buckley, L.L.C., St. Louis, MO, for Defendants.

MEMORANDUM AND ORDER

CAROL E. JACKSON, District Judge.

This matter is before the Court on plaintiff's motion to remand this action to the Circuit Court of the City of St. Louis, from which it was removed. Defendants oppose the motion, and the issues are fully briefed.

I. Background

Defendants Medtronic, Inc. and Medtronic Sofamor Danek USA, Inc. (collectively “Medtronic”), design, manufacture, and sell various types of medical devices, including the InFUSE 0 Bone Graft and LT–CAGE 0 Lumbar Tapered Fusion Device (Infuse).¹ Infuse is a Class III medical device approved by the Food and Drug Administration (FDA) through the required pre-market approval process. It has been approved for use during single-level lumbar spinal fusion surgeries, when implanted via an anterior approach.

On February 27, 2008, plaintiff underwent an L4–L5 transforaminal lumbar interbody fusion at defendant Barnes–Jewish Hospital (BJH), in which defendant Timothy Kuklo, M.D. implanted Infuse in an “off-label” manner, i.e., a manner not approved by the FDA. Plaintiff alleges that after the surgery she experienced severe and chronic pain. Plaintiff attributes her injuries to the defendants' improper marketing and promotion of Infuse for off-label uses and fraudulent misrepresentations about the safety of Infuse.

Plaintiff's complaint asserts the following state law causes of action: (1) fraudulent misrepresentation; (2) strict liability-failure to warn; (3) strict liability-design defect; (4) negligence; (5) breach of implied warranty; (6) breach of express warranty; (7) violation of the Missouri Merchandising Practices Act; and (8) negligent misrepresentation.

Defendants removed this action to federal court on the bases of diversity of citizenship and federal-question jurisdiction. Plaintiff filed the instant motion to remand arguing that this Court lacks subject-matter jurisdiction.

II. Legal Standard

An action is removable to federal court if the claims could have originally been filed in federal court. 28 U.S.C. § 1441 ; In re Prempro Products Liability Litigation, 591 F.3d 613, 619 (8th Cir.2010). The defendant bears the burden of establishing federal jurisdiction by a preponderance of the evidence. Altimore v. Mount Mercy College, 420 F.3d 763, 768 (8th Cir.2005). All doubts about federal jurisdiction must be resolved in favor of remand. In re Bus. Men's Assurance Co. of Am., 992 F.2d 181, 183 (8th Cir.1993). In the event that the federal court determines that it lacks subject-matter jurisdiction over a removed action, it must remand the action to the state court where it originated. 28 U.S.C. § 1447(c).

III. Discussion

Defendants contend that this Court has subject-matter jurisdiction over plaintiff's claims under both 28 U.S.C. § 1331 and § 1332. They argue that diversity jurisdiction exists because Washington University and BJH were fraudulently joined. Defendants argue that federal-question jurisdiction also exists because plaintiff's claims present substantial federal issues. The Court will address these arguments in turn.

1. Diversity Jurisdiction

Diversity jurisdiction requires an amount in controversy greater than $75,000, exclusive of interest and costs, and complete diversity of citizenship among the litigants.² 28 U.S.C. § 1332(a). “Complete diversity of citizenship exists where no defendant holds citizenship in the same state where any plaintiff holds citizenship.” OnePoint Solutions, LLC v. Borchert, 486 F.3d 342, 346 (8th Cir.2007). However, “[c]ourts have long recognized fraudulant joinder as an exception to the complete diversity rule.” In re Prempro, 591 F.3d at 620 ; Witherspoon v. Bayer HealthCare Pharmaceuticals Inc., 2013 WL 6069009, *2 (E.D.Mo. Nov. 18, 2013).

“Fraudulent joinder occurs when a plaintiff files a frivolous or illegitimate claim against a non-diverse defendant solely to prevent removal.” Id. Fraudulent joinder requires a showing that the claim involving the nondiverse party has “no reasonable basis in fact and law.”Knudson v. Systs. Painters, Inc., 634 F.3d 968, 980 (8th Cir.2011). Thus, it must be “clear under governing state law that the complaint does not state a cause of action against the non-diverse defendant” and there is no “arguably [ ] reasonable basis for predicting that the state law might impose liability based upon the facts involved.” Witherspoon, 2013 WL 6069009, at *2. When a district court reviews a fraudulent joinder claim, “the court has no responsibility to definitively settle the ambiguous question of state law.” Filla v. Norfolk Southern Ry. Co., 336 F.3d 806, 810 (8th Cir.2003).

In the instant case, plaintiff, Washington University, and BJH are citizens of Missouri. Medtronic is a citizen of Minnesota and Tennessee and Dr. Kuklo is a citizen of Colorado. In the notice of removal, defendants contend that Washington University and BJH are fraudulently joined. Defendants support this contention by arguing that: (1) plaintiff's complaint does not plead any factual allegations against Washington University or BJH to support a claim against them; and (2) plaintiff's claims against Washington University and BJH are barred by Missouri's two-year statute of limitations for medical malpractice actions.

In support of her motion to remand, plaintiff argues that she has alleged a colorable claim against Washington University under Missouri law pursuant to the doctrine of respondeat superior. Plaintiff argues that Dr. Kuklo, an employee and agent of Washington University, was acting within the course and scope of his agency when he concealed material facts about Infuse and when he improperly used Infuse in an off-label manner. Plaintiff argues that these actions were done while Dr. Kuklo was engaged in the practice of medicine at Washington University and, thus, he was acting in furtherance of the university's business of providing medical care to patients.

“Under the doctrine of respondeat superior, an employer is held responsible for the misconduct of an employee where that employee is acting within the course and scope of his employment.” Tuttle v. Muenks, 964 S.W.2d 514, 517 (Mo.App.1998). “The course and scope of employment is defined as acts (1) which, even though not specifically authorized, are done to further the business or interests of the employer under his general authority and direction and (2) which naturally arise from the performance of the employer's work.” Daugherty v. Allee's Sports Bar & Grill, 260 S.W.3d 869, 872–73 (Mo.App.2008) (citation omitted).

Upon consideration of these factors, the Court is satisfied that “there is an arguably reasonable basis for predicting that the state law might impose liability” against Washington University in this case. See Witherspoon v. Bayer HealthCare Pharmaceuticals Inc., 2013 WL 6069009, at *2. Although Washington University may not have known about or authorized Dr. Kuklo's promotion and implantation of Infuse, Dr. Kuklo was acting as a surgeon employed by Washington University when the alleged fraud was committed. Thus, it would not be unreasonable to assume that a Missouri state court could find that Dr. Kuklo's actions were in furtherance of the interests of his employer and which naturally arose from Dr. Kuklo's occupation as a surgeon. However, “the clear precedent in this District is that this determination is a question better left for review by the state court.” Bock v. Liberty Restaurant Group, 4:13–CV–781–AGF, 2013 WL 4504375 (E.D.Mo. Aug. 23, 2013).

In their notice of removal, defendants additionally assert that Washington University is fraudulently joined because all claims against it are barred by Missouri's two-year statute of limitations for medical malpractice. In support of her motion to remand, plaintiff argues that a five-year statute of limitations applies because her complaint asserts a claim of fraud, not medical malpractice.

Missouri's statute of limitations for medical malpractice actions provides, in pertinent part, that “[a]ll actions against physicians, hospitals ... and any other entity providing health care services ... for damages for malpractice, negligence, error or mistake related to health care shall be brought within two years from the date of occurrence of the act of neglect complained of[.]” Mo.Rev.Stat. § 516.105. In contrast, fraud actions are governed by a five-year statute of limitations, which begins to run when the fraud was discoverable by the aggrieved party. Mo.Rev.Stat. § 516.120(4). “A plaintiff may not circumvent the two-year statute of limitations by characterizing what is actually a medical malpractice claim as a different type of claim.” Cleveland v. Hand Therapy of Chesterfield, 2008 U.S. Dist. Lexis. 49774, *6 (E.D. Mo. June 27, 2008). Missouri courts look at the “gravamen or gist of the action” in order to determine whether the suit is more appropriately categorized as a medical malpractice action subject to a two-year limitations period or a fraud action subject to a five-year limitations period. Id. at *7 (citing Barnhoff v. Aldridge, 327 Mo. 767, 38 S.W.2d 1029, 1030 (1931) ).

After careful examination of the instant complaint, the Court finds that the “gravamen or gist” of this action could reasonably be construed as fraud and, thus, subject to a five year statute of limitations under Missouri state law. Plaintiff's complaint alleges that Dr. Kuklo, while employed as a surgeon at Washington University, was also a paid consultant or “opinion leader” for Medtronic, in which he received more than $800,000 over an eight-year period. See Doc. # 6, ¶ 183. Plaintiff alleges that during his tenure as an opinion leader, Dr. Kuklo falsified data in a published study...