Next Step Medical Co., Inc. et al v. Biomet, Inc. et al

Filing 36

ORDER granting 9 Motion to Remand to State Court. Signed by Judge Juan M. Perez-Gimenez on 10/22/2013. (PMA)

THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO

NEXT STEP MEDICAL CO. INC.; JORGE
IVAN
DAVILA
NIEVES;
MADELINE
RODRIGUEZ MUÑOZ; and their CONYUGAL
PARTNERSHIP,
Civil Case. NO. 13-1518 (PG)

Plaintiffs,
v.
BIOMET INC.; BIOMET INTERNATIONAL,
LTD.;
BIOMET
3i,
LLC;
BIOMET
ORTHOPEDICS PUERTO RICO, INC., JOHN
DOE,
Defendants.

OPINION AND ORDER
Pending before the court is plaintiffs Next Step Medical Co. Inc.,
Jorge Ivan Davila Nieves, Madeline Rodriguez Muñoz, and their Conjugal
Partnership’s motion for remand on procedural grounds (Docket No. 9).
Therein,

plaintiffs

complaint

to

state

request
court,

procedurally defective.

this

court

inasmuch

as

remand
the

the

above-captioned

notice

For the reasons set forth

of

removal

is

below, this Court

GRANTS plaintiffs’ request and REMANDS the above-captioned complaint to
state court.
I.

FACTUAL AND PROCEDURAL BACKGROUND

On April 12, 2013, Next Step Medical Co. Inc., Jorge Ivan Davila
Nieves,

Madeline

Rodriguez

Muñoz,

and

their

Conjugal

Partnership

(hereinafter collectively referred to as “Plaintiffs”) filed the original
complaint

before

the

Puerto

Rico

Court

of

First

Instance,

San

Juan

Superior Part, against Biomet Inc., Biomet International Ltd., Biomet 3i,
LLC, and Biomet Orthopedics Puerto Rico (hereinafter collectively referred
to

as

“Defendants”).

unilaterally

terminated

In

short,
an

Plaintiffs

exclusive

allege

distribution

that

Defendants

agreement

after

Civil No. 13-1518 (PG)
Plaintiffs

had

Page 2

allegedly

“refused

to

execute

a

written

distribution

agreement that contained a forum selection clause, an arbitration clause
and a choice of law clause demanded by Biomet.” See Docket No. 9. However,
according to Plaintiffs, the real motive for termination was that “Biomet
was already planning to sell the products in Puerto Rico through its
Puerto Rico sales subsidiary Biomet Ortho PR.” Id. In the complaint,
Plaintiffs aver five causes of action based solely on Puerto Rico state
law.1
Thereafter, on July 1, 2013, Defendants removed the case to this
court on the basis of diversity jurisdiction pursuant to 28. U.S.C. §
1332(a). See Docket No. 1. Plaintiffs then filed a motion for remand
(Docket No. 9). According to said motion, plaintiff Next Step is a
domestic corporation organized in Puerto Rico, defendant Biomet is an
Indiana corporation, and defendants Biomet International and Biomet 3i
are either Indiana or Delaware corporations. However, defendant Biomet
Ortho

PR

is

a

domestic

corporation

organized

in

Puerto

Rico.

Consequently, Plaintiffs request that this Court remand the case back to
state court, insofar as the notice of removal was signed by Biomet Ortho
PR, a forum defendant, and thus, the same was procedurally defective. Id.
Defendants
Therein,

they

corporation,

opposed

assert
which

the

that

would

plaintiffs’

even

though

ordinarily

request

Biomet

destroy

PR

(Docket
“is

complete

a

No.

13).

Puerto

Rico

diversity

…

it

cannot be held liable for tortious interference, and thus its presence as
a named defendant should be ignored under the fraudulent joinder doctrine

1

In the complaint, Plaintiffs aver causes of action pursuant to the Puerto Rico Dealers
Act, Act No. 75 of June 24, 1964, 10 P.R. LAWS ANN. § 278; as well as for breach of
contract and tort under the Puerto Rico Civil Code.

Civil No. 13-1518 (PG)

Page 3

for diversity purposes.” Id. at page 2. Plaintiffs subsequently filed a
reply to Defendants’ opposition (Docket No. 34).
II.

DISCUSSION

“The district courts of the United States are courts of limited
jurisdiction. They possess only that power authorized by Constitution and
statute.” In re Olympic Mills Corp., 477 F.3d 1, at 6 (citing Kokkonen v.
Guardian Life Ins. Co. Of Am., 511 U.S. 375, 377 (1994)). Pursuant to 28
U.S.C. § 1441(a), “any civil action brought in a State court of which the
district courts of the United States have original jurisdiction, may be
removed by the defendant or the defendants, to the district court of the
United States for the district and division embracing the place where such
action is pending.” 28 U.S.C. § 1441(a). Consequently, the complaint must
present either a federal question, or diversity of citizenship must exist
in order for a case to be removed to federal court under 28 U.S.C.
§ 1441(a).
Section 1441(b)

addresses

the

removal

of

cases

on

the

basis

of

diversity of citizenship. Accordingly, said section states that a case “may
not be removed if any of the parties in interest properly joined and served
as defendants is a citizen of the State in which such action is brought.”
28 U.S.C. § 1441(b)(2).
“[R]emoval statutes are strictly construed … and defendants have the
burden of showing the federal court’s jurisdiction.”

Danca v. Private

Health Care Systems, 185 F.3d 1, 4 (1st Cir.1999) (internal citations
omitted).

“When

plaintiff

and

defendant

clash

about

jurisdiction,

uncertainties are construed in favor of remand.” Asociacion de Detallistas
de Gasolina v. Shell, 380 F.Supp.2d 40, at 43 (D.P.R.2005) (citing Burns v.
Windsor Ins. Co., 31 F.3d 1092, 1097 (11th Cir.1994)).

Civil No. 13-1518 (PG)

Page 4

“Fraudulent joinder is a judicially created doctrine that provides
an exception to diversity requirements.” Triggs v. John Crump Toyota,
Inc., 154 F. 3d 1284, 1287 (11th Cir.1998). Accordingly, this doctrine
“is meant to prevent plaintiffs from joining non-diverse parties in an
effort to defeat federal jurisdiction.” Figueroa Berrios v. BASF Corp.,
No. 05-1317, 2006 WL 2456407, at 1 (D.P.R. August 22, 2006) (citing
Briarpatch Limited, L.P. v. Phoenix Pictures, Inc., 373 F.3d 296, 302
(2nd Cir.2004)). Thus, “[w]hen a plaintiff names a non-diverse defendant
solely in order to defeat federal diversity jurisdiction, the district
court must ignore the presence of the non-diverse defendant and deny any
motion

to

remand

Polyplastics,

the

Inc.

v.

matter

back

Transconex,

to

state

Inc.,

713

court.”
F.2d

Id.

875

See

also

(1st

Cir.1983)

(finding that a party fraudulently joined to defeat removal need not join
in a removal petition, and is disregarded in determining diversity of
citizenship.).
Courts have elaborated a two-pronged approach to be taken into
account when entertaining a fraudulent joinder claim, wherein “[t]he
removing

party

fraudulent.”

bears

Crowe

v.

a

heavy

Coleman,

burden
113

of

F.3d

proving
1536,

that

1538

joinder

(11th

was

Cir.1997).

Accordingly, “[a] defendant seeking to prove that a co-defendant was
fraudulently

joined

must

demonstrate

either

that:

(1)

there

is

no

possibility the plaintiff can establish a cause of action against the
resident

defendant;

or

(2)

the

plaintiff

has

fraudulently

pled

jurisdictional facts to bring the resident defendant into state court.”
Henderson v. Washington Nat’l Ins. Co., 454 F.3d 1278, 1281 (11th Cir.
2006). “If there is even a possibility that a state court would find that
the complaint states a cause of action against any one of the resident

Civil No. 13-1518 (PG)

Page 5

defendants, the federal court must find that the joinder was proper and
remand the case to the state court.” Triggs v. John Crump Toyota, Inc.,
154 F.3d at 1287. In addition, “[f]or the joinder of a non-diverse
defendant to be legitimate, and to thus defeat diversity jurisdiction,
the

plaintiff

need

not

have

a

winning

case

against

the

allegedly

fraudulent defendant; he need only have a possibility of stating a valid
cause of action.” Id.
Since Defendants do not allege that Plaintiffs have fraudulently
pled jurisdictional facts to bring the resident defendants into state
court,

this

Court

will

refrain

from

discussing

said

factor

herein.

Nevertheless, Defendants do assert that Plaintiffs “state no cognizable
cause of action” against Biomet PR, inasmuch as Plaintiffs’ only claim
against Biomet PR is for tortious interference and they fail to meet the
required

criteria.2

See

Docket

No.

1.

This,

because

according

to

Defendants, “Biomet PR obviously cannot be a third party to a contract to
which its own parent corporations are a party.” Id. at page 4.
After reviewing the Second Amended Complaint (Docket. No 10-1), the
Court notes that even though Plaintiffs included a cause of action based
on tortious interference against Biomet PR, the complaint also sets forth
four other causes of action against all Defendants.3 Thus, even if the
Court were to dismiss the tortious interference claim, there are four

2

Pursuant to Puerto Rico case law, in order to successfully establish a tortious
interference claim, the plaintiff must demonstrate “(1) the existence of a contract with
which a third party interferes (2) fault must be present as the third party must act
tortiously with knowledge of the contract's existence; (3) there must be a damage; and 4)
the damages must be a consequence of the tortious acts of the third party.” Huongsten
Prod. Import & Export Co. Ltd. V. Sanco Metals LLC, No. 10-1610 2011 WL 3607816, at 7
(D.P.R. August 16, 2011) (citing Gen. Office Prods. Corp. v. A.M. Capens Sons, Inc., 115
P.R. Dec. 553, 559 (1984)).
3

Namely, a first cause of action pursuant to the Puerto Rico Dealers Act, Act 75 of June
24, 1964, 10 P.R. LAWS ANN. § 278; a second cause of action pursuant to P.R. Civil Code
Arts. 1054-1060, 1077, 31 L.P.R.A. § 3018-3024, 3052; and two other causes of action
pursuant to P.R. Civil Code Art. 1802, 31 L.P.R.A. § 5141. See Docket No. 10-1.

Civil No. 13-1518 (PG)

Page 6

additional causes of action included in the Second Amendment Complaint
against all of the Defendants, including Biomet PR. Also, the Court finds
that there is “a possibility that a state court would find that the
complaint states a cause of action against … the resident defendant.”
Triggs

v.

John

Defendants

Crump

failed

to

Toyota,
meet

Inc.,

their

154

F.3d

“burden

of

at

1287.

showing

Consequently,
this

court’s

jurisdiction, Danca, 185 F.3d at 4, and the above-captioned complaint
shall be remanded back to state court.
III. CONCLUSION
Pursuant to the foregoing, this Court hereby GRANTS Plaintiffs’
request

for

remand

(Docket

No.

9).

The

Clerk

of

Court

shall

enter

judgment remanding the action to the Court of First Instance, San Juan
Superior Part.
SO ORDERED.
In San Juan, Puerto Rico, October 22, 2013.
S/ JUAN M. PÉREZ-GIMÉNEZ
JUAN M. PÉREZ-GIMÉNEZ
UNITED STATES DISTRICT JUDGE