Petitta v. 3M Co. (In re Bair Hugger Forced Air Warming Devices Prods. Liab. Litig.)

• Decision Date: 28 May 2021
• Docket Number: No. 19-2932,19-2932
• Citation: 999 F.3d 534
• Parties: IN RE: BAIR HUGGER FORCED AIR WARMING DEVICES PRODUCTS LIABILITY LITIGATION John Petitta Plaintiff - Appellant v. 3M Company Defendant - Appellee
• Court: U.S. Court of Appeals — Eighth Circuit

999 F.3d 534

IN RE: BAIR HUGGER FORCED AIR WARMING DEVICES PRODUCTS LIABILITY LITIGATIONJohn Petitta Plaintiff - Appellant

v.3M Company Defendant - Appellee

No. 19-2932

United States Court of Appeals, Eighth Circuit.

Submitted: March 16, 2021

Filed: May 28, 2021

Gabriel A. Assaad, McDonald & Worley, Kyle W. Farrar, Farrar & Ball, Houston, TX, Katherine Susan Barrett Wiik, Best & Flanagan, Michael Vincent Ciresi, Jan Marie Conlin, Michael A. Sacchet, Ciresi & Conlin, Wilbur W. Fluegel, Fluegel Law Office, Genevieve M. Zimmerman, Meshbesher & Spence, Minneapolis, MN, Ben W. Gordon, Jr., J. Michael Papantonio, Levin & Papantonio, Pensacola, FL, for Plaintiff-Appellant.

Jerry Blackwell, Benjamin Winters Hulse, Blackwell & Burke, Jeffrey Justman, Aaron Daniel Van Oort, Faegre & Drinker, Minneapolis, MN, for Defendant-Appellee.

Before GRUENDER, KELLY, and GRASZ, Circuit Judges.

KELLY, Circuit Judge.

In this case, a federal district court permanently enjoined John Petitta from litigating claims against 3M Company in Texas state court, where he had filed suit three years earlier. Petitta and 3M had previously agreed to dismiss with prejudice similar claims Petitta brought against 3M in a multidistrict litigation (MDL) in federal court. The district court concluded that this previous dismissal had preclusive effect in the Texas case, authorizing it to enjoin the state court proceedings under the relitigation exception to the Anti-Injunction Act. See 28 U.S.C. § 2283. We reverse and vacate the district court's injunction.

I.

In November 2014, Petitta, a Texas resident, underwent knee replacement surgery in Brownsville, Texas. During that surgery, the hospital used a Bair Hugger Forced Air Warming Product (Bair Hugger), designed and manufactured by 3M. Petitta developed a periprosthetic joint infection, which he alleges was caused by the Bair Hugger.

On November 10, 2016, Petitta filed an individual complaint in the Bair Hugger MDL that was ongoing in the United States District Court for the District of Minnesota (the MDL court). He brought the case under the court's diversity jurisdiction and alleged negligence, strict products liability, breach of warranty, and related claims. Four days later, through different attorneys, Petitta filed a separate suit against 3M in state court in Hidalgo County, Texas, alleging negligence, breach of warranty, and strict products liability.

On November 22, 2016, counsel for 3M contacted Petitta's attorneys in both actions, saying that Petitta's "claims appear duplicative" and asking that they "confer with [their] client and determine next steps." The following month, Petitta's counsel informed 3M that the Texas lawsuit would continue and that Petitta would "agree to a stipulation for dismissal of the MDL action." In April 2017, Petitta's MDL counsel sent 3M's counsel a proposed stipulation for dismissal with prejudice. 3M accepted the stipulation, and the parties filed it with the MDL court on April 5, 2017. The document was titled "Stipulation of Dismissal with Prejudice" and stated, "It is hereby stipulated and agreed, by and between the undersigned parties, pursuant to Fed. R. Civ. P. 41(a)(1)(A)(ii), that the above-captioned case be dismissed with prejudice, each party to bear its own costs." The following day, the MDL court entered an order terminating Petitta's federal case.

Over the next two years, Petitta's case progressed in Texas state court. 3M alleges that during this time Petitta sought discovery orders that would be inconsistent with the ones issued by the MDL court. On June 4, 2019, while discovery was ongoing in the Texas case, 3M filed an amended answer to Petitta's Texas action, asserting a res judicata affirmative defense based on his dismissed MDL case. The next day, 3M filed a motion with the MDL court, urging it to use its authority under the relitigation exception to the Anti-Injunction Act to permanently enjoin Petitta from litigating in Texas the claims that had been voluntarily dismissed in the MDL case.

On June 24, 2019, Petitta moved for summary judgment in Texas court on 3M's potential res judicata defense; on July 31, 2019, 3M cross-moved for summary judgment on the same basis. The Texas court heard arguments on Petitta's motion for summary judgment on August 7, 2019. Later that same day, the MDL court granted 3M's motion for an injunction, permanently enjoining Petitta from "relitigating in state court his claims against Defendants that were previously dismissed with prejudice from the MDL." Petitta now appeals.

II.

The Anti-Injunction Act provides that "[a] court of the United States may not grant an injunction to stay proceedings in a State court except as expressly authorized by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments." 28 U.S.C. § 2283. At issue here is the third of the Act's exceptions, commonly referred to as the relitigation exception. This provision is "designed to implement well-recognized concepts of claim and issue preclusion" and "authorizes an injunction to prevent state litigation of a claim or issue that previously was presented to and decided by the federal court." Smith v. Bayer Corp., 564 U.S. 299, 306, 131 S.Ct. 2368, 180 L.Ed.2d 341 (2011) (cleaned up); see also Chick Kam Choo v. Exxon Corp., 486 U.S. 140, 147, 108 S.Ct. 1684, 100 L.Ed.2d 127 (1988) ("[The relitigation exception] is founded in the well-recognized concepts of res judicata and collateral estoppel."). Federal courts should "take[ ] special care to keep [the exception] strict and narrow," as "issuing an injunction under the relitigation exception is resorting to heavy artillery." Bayer, 564 U.S. at 306–07, 131 S.Ct. 2368 (cleaned up). Accordingly, we review the applicability of the relitigation exception de novo, "resolv[ing] any doubts in favor of allowing state courts to proceed without interference from the federal courts." Canady v. Allstate Ins. Co., 282 F.3d 1005, 1014 (8th Cir. 2002) ; see also Bayer, 564 U.S. at 307, 131 S.Ct. 2368 ("[E]very benefit of the doubt goes toward the state court; an injunction can issue only if preclusion is clear beyond peradventure." (citation omitted)).

A.

Because the relitigation exception applies when a claim in state court "previously was presented to and decided by the federal court," Bayer, 564 U.S. at 306, 131 S.Ct. 2368 (quoting Chick Kam Choo, 486 U.S. at 147, 108 S.Ct. 1684 ), the key issue here is whether the stipulated dismissal with prejudice in the MDL case means that Petitta's Texas claims were decided by the MDL court. See Daewoo Elecs. Corp. of Am. v. W. Auto Supply Co., 975 F.2d 474, 477 (8th Cir. 1992) ("[A]n essential prerequisite for application of the relitigation exception is that the claims the federal injunction insulates from litigation in state proceedings have actually been decided by the federal court."). To answer this question, we rely on the doctrine of claim preclusion, also known as res judicata. See Chick Kam Choo, 486 U.S. at 147, 108 S.Ct. 1684.¹ But first we must determine which approach to claim preclusion governs: that of federal common law, Minnesota law, or Texas law?

3M urges us to apply the substantive approach to claim preclusion developed under federal common law. But while federal common law guides the claim preclusion analysis in federal question cases, see Taylor v. Sturgell, 553 U.S. 880, 891, 128 S.Ct. 2161, 171 L.Ed.2d 155 (2008), Petitta brought his claims under the MDL court's diversity jurisdiction. In diversity cases, federal law generally "incorporates the rules of preclusion applied by the State in which the rendering court sits." Id. at 891, 128 S.Ct. 2161 n.4 ; see also Semtek Int'l Inc. v. Lockheed Martin Corp., 531 U.S. 497, 508, 121 S.Ct. 1021, 149 L.Ed.2d 32 (2001) (holding that the "claim-preclusive effect" of a previous decision by a federal court sitting in diversity is governed by "the law that would be applied by state courts in the State in which the federal diversity court sits"). Therefore, although federal common law applies here, it dictates that we apply state law to determine whether Petitta's Texas claims were previously decided by the MDL court.²

Because Petitta brought his diversity claims in the District of Minnesota based on the court's diversity jurisdiction, ordinarily Minnesota law on claim preclusion would govern, see Semtek, 531 U.S. at 508, 121 S.Ct. 1021, and Petitta encourages us to apply Minnesota's approach here. But there is an additional wrinkle in this case. Petitta brought his case in the District of Minnesota pursuant to an MDL-wide order that directed Bair Hugger plaintiffs who would have brought their individual claims in other federal venues instead to file directly in the MDL court. Had the order not been in effect, the proper venue would have been the Southern District of Texas, as Petitta indicated in his complaint.

For the purposes of choice of law analysis, an MDL court is not a typical federal court sitting in diversity. Because claims in MDL cases often wind up in the MDL forum through an "accident of bureaucratic convenience," Wahl v. Gen. Elec. Co., 786 F.3d 491, 496 (6th Cir. 2015), this court and others have concluded in many instances that the substantive law of the forum the individual complaint was or would have been brought in should govern, rather than the law of the MDL forum. See, e.g., In re Temporomandibular Joint Implants Prods. Liab. Litig., 97 F.3d 1050, 1055 (8th Cir. 1996) ("When considering questions of state law, ... the transferee [MDL] court must apply the state law that would have applied to the individual cases had they not been transferred for consolidation."); Wahl, 786 F.3d at 496–98 (holding that when individual actions originally filed directly in an MDL forum are transferred to another proper venue for trial, the transferee forum should apply its law, rather than the law of the state in which the MDL court sits); In re Volkswagen & Audi Warranty...