In re Guidant Corp. Implantable Defibrillators

• Decision Date: 23 May 2007
• Docket Number: No. CIV. 06-25 DWFAJB.,No. MDL 05-1708 (DWFAJB).,MDL 05-1708 (DWFAJB).,CIV. 06-25 DWFAJB.
• Parties: In re: GUIDANT CORP. IMPLANTABLE DEFIBRILLATORS PRODUCTS LIABILITY LITIGATION. This Document Relates to: Leopoldo Duron, Jr., Plaintiff, v. Guidant Corporation, Guidant Sales Corporation, Boston Scientific Corp., and Cardiac Pacemakers, Inc., Defendants.
• Court: U.S. District Court — District of Minnesota

489 F.Supp.2d 932

In re: GUIDANT CORP. IMPLANTABLE DEFIBRILLATORS PRODUCTS LIABILITY LITIGATION This Document Relates to: Leopoldo Duron, Jr., Plaintiff, v. Guidant Corporation, Guidant Sales Corporation, Boston Scientific Corp., and Cardiac Pacemakers, Inc., Defendants.

No. MDL 05-1708 (DWFAJB).

No. CIV. 06-25 DWFAJB.

United States District Court, D. Minnesota.

May 23, 2007.

Tim Pratt and Andrew Carpenter of Shook, Hardy, & Bacon, for Defendant Guidant.

MEMORANDUM OPINION AND ORDER

FRANK, District Judge.

This matter came before the Court on May 18, 2007, pursuant to a Motion for Application of Minnesota Law brought by Plaintiff Leopoldo Duron, Jr. For the reasons set forth below, the Court grants in part and denies in part Duron's motion.

BACKGROUND

In March 2002, Dr. Steven Higgins surgically implanted an implantable cardioverter defibrillator ("ICD"), the VENTAK PRIZM 2 DR, Model 1861 (the "Prizm 2"), in Leopoldo Duron, Jr. after an electrophysiology study showed that he needed an ICD. An ICD is a device that is implanted in a patient with certain ventricular arrhythmias or with a risk of having such arrhythmias. It monitors a patient's heart rhythm and, if needed, arts to correct or restore that rhythm. An ICD can function both as a pacemaker and a defibrillator. Guidant¹ manufactured the Prizm 2.

On June 17, 2005, Guidant issued a notice to doctors explaining that the Prizm 2 was subject to a recall due to a shortcircuiting problem. On June 29, 2005, the Food and Drug Administration classified Guidant's recall as a Class I recall, which is reserved for devices that create a reasonable probability of serious adverse health consequence or death. On August 19, 2005, Dr. Sardul Singh explanted Duron's Prizm 2 and replaced it with a different Guidant-manufactured ICD.

On October 14, 2005, Duron filed a complaint in the Southern District of California against Guidant related to the recall of the Prizm 2 and Duron's subsequent explant surgery. On January 11, 2006, the Judicial Panel on Multidistrict Litigation transferred Duron's case to this Court pursuant to 28 U.S.C. § 1407 for coordinated and consolidated pretrial proceedings. On October 12, 2006, Duron filed an Amended Complaint-by-Adoption, which specifically incorporated portions of the Master Complaint that was filed in the master case, MDL 05-1708 (DWF/AJB).

Early in this MDL, the Plaintiffs Lead Counsel Committee ("PLCC"), acting on behalf of the MDL plaintiffs, and Guidant agreed to try five bellwether cases.² Eventually, Duron v. Guidant Corp., et al., as a case involving an explant without complications, was chosen to be the first bellwether trial. In response to Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26, 118 S.Ct. 956, 140 L.Ed.2d 62 (1998),³ Duron consented to trial in this Court and waived his right to object to venue. See Manual for Complex Litig. Fourth § 20.132 at 224-25 (discussing various mechanisms that "permit the transferee court to resolve multidistrict litigation through trial while remaining faithful to Lexecon limitations"). The Duron trial is scheduled to begin on July 30, 2007. Duron now brings this Motion to determine which state's law applies to his claims.

ARGUMENT

I. Which State's Choice of Law Rules Apply to Duron's Claims?

A district court sitting in diversity normally applies the substantive law, including the choice-of-law rules, of the forum state in which it sits. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). If, however, there is a change of venue under 28 U.S.C. § 1404(a), a federal court sitting in diversity is obliged to apply the law that would have been applied in the transferor court. Van Dusen v. Barrack, 376 U.S. 612, 639, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964). "In an MDL setting, the forum state is usually the state in which the action was initially filed before it was transferred to the court presiding over the MDL proceedings." In re Propulsid Prods. Liab. Litig., 208 F.R.D. 133, 140 (E.D.La.2002).

Here, Duron filed his original Complaint in California; however, he contends Minnesota law, not California law, should apply to his claims. He argues that his case should be treated differently because he filed an Amended Complaint-by-Adoption in this Court, which incorporates by reference portions of the Master Complaint that was filed directly in this Court. This act, he contends, gives this Court original jurisdiction over his case, or in other words, turns his case into a direct-file case in the District of Minnesota. Duron also asserts that the parties agreed that Minnesota law would govern his claims when they jointly agreed to waive the Lexecon requirements and have the case tried in this Court. Duron bases this argument on cases discussing choice-of-law issues in nationwide class action contexts and on In re Bridgestone/Firestone, Inc. Tires Prods. Liab. Litig., 155 F.Supp.2d 1069 (S.D.Ind.2001). Finally, Duron argues that Guidant, with its headquarters in Minnesota insofar as it related to the manufacturing of ICDs (including the Prizm 2), has significant contacts with Minnesota that directly related to the allegations in this case.

Guidant responds that a transfer under 28 U.S.C. § 1407(a) should be treated as a simple change in venue, in which case the forum state remains the state where the action was commenced. It contends that Lexecon is irrelevant as to choice-of-law and that the parties did not reach an agreement concerning choice-of-law. Guidant argues that California choice-of-law rules should apply to Duron's claims because he commenced this action in the Southern District of California. Guidant points out that the Master Complaint expressly states that it serves "only the administrative functions of efficiency and economy." (Master Compl. ¶ 2.) In addition, it contends that if the Court were to adopt Duron's argument, then any plaintiff whose case was transferred to this MDL could subvert Klaxon and Van Dusen by filing their own amended complaint-by-adoption.

The Court agrees with Guidant that California's choice-of-law rules should apply in this case. The parties did not reach an agreement on what impact, if any, the filing of a master complaint has on an MDL court's choice-of-law analysis. See In re Vioxx Prods. Liab. Litig., 239 F.R.D. 450, 454 n. 6 (E.D.La.2006) (discussing the parties' agreement in In re Bridgestone/Firestone); In re Propulsid, 208 F.R.D. at 141-42 (discussing the purpose and problems created by the filing of a master complaint); In re Bridgestone/Firestone, 155 F.Supp.2d at 1078 ("[T]he parties agree that this Court should be treated as the forum court because Plaintiffs filed their Master Complaint in this Court.") Admittedly, the interplay between the Rules of Procedure of the Judicial Panel on Multidistrict Litigation, traditional venue statues, and choice-of-law rules is far from clear. As Judge Fallon has observed, "[p]erhaps the answer lies in a stipulation which addresses and clarifies these issues." See In re Vioxx Prod. Liab. Litig., 478 F.Supp.2d 897, 904 n. 2 (E.D.La.2007). Unfortunately, there is no such stipulation here.

The parties did not cite, and the Court could not find, any authority on point for the unusual and unique situation in this case. Namely, where the defendant is located in the state where the MDL Court sits. Also, authority is lacking that discusses choice-of-law issues for a bellwether plaintiff whose case was transferred into an MDL where the plaintiff subsequently filed an amended complaint in the MDL court. Given this, the Court relies on the undisputed hornbook law discussed above. In addition, although § 1404 is not at play here, Van Dusen's reasoning is nonetheless instructive in that it teaches that "[a] change of venue under § 1404(a) generally should be, with respect to state law, but a change of courtrooms." Van Dusen, 376 U.S. at 639, 84 S.Ct. 805.

Normally, in a non-MDL setting, a transferor court's choice-of-law rules continue to apply even if the complaint is later amended in the transferee court. See, e.g., Brown v. Hearst Corp., 54 F.3d 21, 24 (1st Cir.1995) (utilizing transferor court's choice-of-law rules even though that claim-at-issue arose after the transfer by way of an amendment to the original complaint). The Court concludes that the same result should occur in this MDL. The transfer under § 1407, even after the filing of an amended complaint, is only a change in courtrooms. Consolidation of a master complaint is merely a procedural device designed to promote judicial economy, and, as such, it does not affect the rights of the parties in separate suits. See In re Rezulin Prods. Liab. Litig., 390 F.Supp.2d 319, 330 n. 62 (S.D.N.Y.2005). Just as transfers pursuant to §§ 1404 and 1407 do not affect the applicable choice-of-law rules, the Court concludes that the filing of a Master Complaint or an amended complaint-by-adoption or waiving Lexecon requirements do not impact the applicable choice-of-laws rules. Therefore, California's choice-of-law rules will govern Duron.

II. California's Choice of Law Analysis

California resolves conflict-of-law questions through a "governmental interest" analysis. Reich v. Purcell, 67 Cal.2d 551, 63 Cal.Rptr. 31, 432 P.2d 727, 730 (1967). This approach requires a court to find the proper law to apply based upon the interests of the litigants and the involved states. Offshore Rental Co. v. Cont'l Oil Co., 22 Cal.3d 157, 148 Cal.Rptr. 867, 583 P.2d 721, 724 (1978). "A separate choice-of-law inquiry must be made with respect to each issue in a case." Application Group, Inc. v. Hunter Group, Inc., 61 Cal.App.4th 881, 72 Cal.Rptr.2d 73, 82 (1998).

Courts applying California's governmental interests analysis have established a three-part test:

Under this amorphous and somewhat result-oriented approach, we must first consider whether the two states' laws actually differ; if so, we must examine each...