Phillips v. Medtronic Inc.

• Decision Date: 01 December 2010
• Docket Number: Civil Action No. 10–10305–NMG.
• Citation: 754 F.Supp.2d 211
• Parties: Cynthia PHILLIPS and Clifton Phillips, Plaintiffs,v.MEDTRONIC, INC. and The Brigham and Women's Hospital, Inc., Defendants.
• Court: U.S. District Court — District of Massachusetts

754 F.Supp.2d 211

Cynthia PHILLIPS and Clifton Phillips, Plaintiffs,

v.MEDTRONIC, INC. and The Brigham and Women's Hospital, Inc., Defendants.

Civil Action No. 10–10305–NMG.

United States District Court, D. Massachusetts.

Dec. 1, 2010.

Alan L. Cantor, Edward M. Swartz, Swartz & Swartz, Boston, MA, for Plaintiffs.Lori G. Cohen, Eric M. Gold, Greenberg Traurig LLP, Atlanta, GA, Bridget F. Schley, Diedrich & Donohue, LLP, Boston, MA, for Defendants.

MEMORANDUM & ORDER

GORTON, District Judge.

Plaintiffs Cynthia Phillips (“Cynthia”) and Clifton Phillips (“Clifton”) (collectively “the Plaintiffs”) bring a product liability suit against Medtronic, Inc. (“Medtronic”) and The Brigham and Women's Hospital (“The Brigham”) (collectively “the Defendants”) for negligence, breach of express and implied warranties and unfair and deceptive practices in violation of the Massachusetts Consumer Protection Act, Mass. Gen. Laws ch. 93A (“Chapter 93A”). Before the Court are motions to dismiss brought by Medtronic and The Brigham and a motion to remand the action to state court brought by the Plaintiffs.

I. Factual Background

The following facts are as alleged in the Plaintiffs' complaint.

Medtronic designs, develops, assembles, manufactures, packages, markets and sells intrathecal pain pumps. The devices at issue in this case are the Medtronic SynchroMed® II Programmable Drug Infusion Pump Model 8637–40 (“the SynchroMed Pump”) and its associated devices including but not limited to the Medtronic Indura® 1P Intrathecal Catheter Model 8709SC (“the Indura Catheter”) (collectively “Medtronic's Devices”). Pursuant to the Medical Device Amendments (“MDA”) to the Food, Drug, and Cosmetic Act (“FDCA”), the Food and Drug Administration (“FDA”) issued pre-market approval (“PMA”) for Medtronic's Devices.

In 2002, Cynthia had a Medtronic intrathecal pain pump inserted. In July, 2004, the pump was replaced with a SynchroMed Pump and Indura Catheter. Both procedures were performed at The Brigham. Through late 2005, the SynchroMed Pump was filled with medication supplied by The Brigham using devices manufactured or approved by Medtronic and supplied and sold by The Brigham.

In late December, 2005 and early January, 2006, Cynthia had surgeries at The Brigham due to increased pain and loss of unexplained “function”. Cynthia's physician determined that the cause of her increased pain and loss of function was the formation of granulomas, or inflammatory masses, at or near the tip of the Indura Catheter.

In January, 2008, Medtronic sent a letter to clinicians worldwide informing them of an increase in reported cases of inflammatory masses associated with its implantable infusion systems, including the SynchroMed Pump. In March, 2008, the FDA classified the letter as a Class I Recall (“the Recall”). Cynthia alleges that she did not learn of the Recall until 2009.

The Plaintiffs claim that Medtronic was negligent in designing its Devices and that both of the Defendants were negligent in failing to warn consumers about the possibility of granuloma formation at the Indura Catheter's tip, the propensity of certain medications, such as opioids, to form such granulomas and the appropriate dosage of medications to be used with Medtronic's Devices. The Plaintiffs also allege that the Defendants breached express and implied warranties that the devices were safe, merchantable and fit for their intended purposes by marketing products with defective designs and failing to warn of known hazards. The Plaintiffs further contend that, due to the design defects, Medtronic did not conform to the design specifications that were approved by the FDA. Cynthia seeks damages for “severe and permanent injuries including a substantial exacerbation of her disability.” She alleges that she is permanently confined to a wheelchair and requires full-time care. Clifton, Cynthia's husband, seeks damages for loss of consortium.

The Plaintiffs also seek damages for violations of Chapter 93A, claiming that the Defendants engaged in unfair and deceptive practices. On October 22, 2009, the Plaintiffs sent the Defendants a written demand for relief, asking for $15 million for Cynthia and $2.5 million for Clifton. The Defendants demurred. The Plaintiffs allege that they are entitled to treble damages and attorneys' fees because the Defendants' refusal to settle was made in bad faith.

II. Procedural History

The Plaintiffs filed their complaint in the Massachusetts Superior Court Department for Suffolk County on December 14, 2009. On February 22, 2010, the case was removed to federal court based upon the Defendants' claim of 1) diversity of citizenship pursuant to 28 U.S.C. § 1332 and 2) federal question jurisdiction pursuant to 28 U.S.C. § 1331. On March 1st and 8th of 2010, the Defendants moved to dismiss the case. On March 22, 2010, the Plaintiffs moved to remand the action to state court.

Medtronic requested oral argument on its motions but the Court determined that such a hearing was unnecessary.

III. Motion to Remand to State Court

The Plaintiffs move to remand this case to state court, maintaining that this Court lacks subject matter jurisdiction over the case because there is not complete diversity of citizenship between the parties and the case does not involve any federal question.

A. Diversity Jurisdiction: Fraudulent Joinder

1. Standard

A non-resident defendant may remove a civil case from state court to a United States District Court if the case presents a controversy between citizens of different states and the amount in controversy exceeds $75,000. 28 U.S.C. §§ 1332, 1441(b). To determine whether complete diversity exists, the Court must examine the circumstances as of the time of the petition for removal. Carey v. Bd. of Governors of Kernwood Country Club, 337 F.Supp.2d 339, 341 (D.Mass.2004). If the Court determines that complete diversity does not exist, the case must be remanded. See 28 U.S.C. § 1447(c) (“[i]f at any time prior to final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.”); Carey, 337 F.Supp.2d at 341.

The plaintiff may not defeat the right of removal by fraudulently joining a non-diverse defendant “having no real connection with the controversy.” Mills v. Allegiance Healthcare Corp., 178 F.Supp.2d 1, 4 (D.Mass.2001) (quoting Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 97, 42 S.Ct. 35, 66 L.Ed. 144 (1921)). A joinder is considered fraudulent if it is “without any reasonable basis in fact and without any purpose to prosecute the cause in good faith against [the defendants].” Wilson, 257 U.S. at 98, 42 S.Ct. 35. A finding of fraudulent joinder “bears an implicit finding that the plaintiff has failed to state a cause of action against the fraudulently joined defendant[s].” Polyplastics, Inc. v. Transconex, Inc., 713 F.2d 875, 877 (1st Cir.1983); see also Coughlin v. Nationwide Mut. Ins. Co., 776 F.Supp. 626, 628 (D.Mass.1991).

The party seeking removal bears the burden of showing, by clear and convincing evidence, that the non-diverse defendant was fraudulently joined. Simons v. Hitachi Am., Ltd., No. 06–11895, 2007 WL 1306558, at *3 (D.Mass. May 3, 2007). In deciding whether there is a “reasonable basis in law and fact” for the claim, the Court must resolve “all disputed questions of fact and any ambiguities in the current controlling substantive law in plaintiffs' favor”. Badon v. RJR Nabisco Inc., 236 F.3d 282, 286 (5th Cir.2000). In considering whether a party has been fraudulently joined, a court is not held captive by the allegations in the complaint. Mills, 178 F.Supp.2d at 5. A court may consider additional evidence beyond the claims made in the pleadings, including affidavits of the parties. Id. at 6 (citing Badon, 236 F.3d at 285 n. 3 (holding that a court may consider “undisputed summary judgment type evidence” when determining whether a reasonable possibility of recovery under state law exists)).

2. Application

This case was removed to federal court on the theory that The Brigham was fraudulently joined to defeat diversity. The Plaintiffs are residents of Massachusetts. Medtronic is a foreign corporation with its principal place of business in Minnesota. The Brigham is a Massachusetts corporation with its principal place of business in Boston, Massachusetts. Thus, in the absence of The Brigham, there would be complete diversity and this Court would have subject matter jurisdiction over the Plaintiffs' claims. The question for the Court is, therefore, whether the Plaintiffs' claims against The Brigham have a “reasonable basis in law and fact.” Badon, 236 F.3d at 286.

a. Claim Against The Brigham for Breach of Warranty

In Massachusetts, there is no strict liability cause of action for a defective product. Commonwealth v. Johnson Insulation, 425 Mass. 650, 682 N.E.2d 1323, 1326 (1997). Such a claim must be brought as a claim for breach of the implied warranties of merchantability and/or fitness for a particular purpose under Mass. Gen. Laws ch. 106, §§ 2–314 and 2–315, or of an express warranty under § 2–313. Id. Such claims must arise out of “transactions in goods” and not the provision of services. Mass. Gen. Laws ch. 106, § 2–102. The breach of warranty theory is not available where “the predominant factor, thrust, or purpose” of the transaction is the “rendition of service, with goods incidentally involved.” Mattoon v. City of Pittsfield, 56 Mass.App.Ct. 124, 775 N.E.2d 770, 784 (2002). Additionally, a breach of warranty claim can only be brought against a “seller” of goods. Mass. Gen. Laws ch. 106, §§ 2–313, 2–314, 2–315.

The dispositive issue before the Court is whether a hospital may be liable for breach of warranty for supplying a medical device to a patient as part of his or her treatment. The Court has discovered no Massachusetts case law that resolves that question. When a federal court is applying state substantive law in a diversity action and the state courts...