Felkel v. DePuy Orthopaedics Inc et al

Filing 29

ORDER granting 11 Motion to Stay, finding as moot 10 Motion to expedite, staying the action pending transfer to MDL No. 2197. Signed by Honorable Joseph F Anderson, Jr on 08/15/2012.(bshr, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
COLUMBIA DIVISION
Michelle S. Felkel,
Plaintiff,
vs.
DePuy Orthopaedics, Inc; Macari
Medical, Inc.; and William G. Macari,
Defendants.

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C/A No.: 3:12-cv-1931-JFA

ORDER

This case comes before the Court on Plaintiff Michelle S. Felkel’s Motion to Remand
(ECF No. 9) and Defendant DePuy Orthopaedic’s (“DePuy”) Motion to Stay (ECF No. 11). A
conditional transfer order has been filed in this case, but the order has not become effective yet,
and in the meantime, this Court’s jurisdiction continues.
I.

Factual and Procedural History
On August 24, 2010, DePuy Orthopaedics, Inc. (“DePuy”) initiated a voluntary recall of

the ASRTM Hip Systems. After the recall, lawsuits were filed all over the country. These suits
have been consolidated in multidistrict litigation (“MDL”) No. 2197, which is before the
Honorable David A. Katz of the Northern District of Ohio. More than 4,900 actions have now
been transferred to, or direct-filed in, the MDL court. In fact, another case, Beavers v. DePuy
Orthopaedics, that was previously pending before this Court has been transferred to MDL No.
2197. In that case, a Plaintiff filed against these exact same Defendants regarding the ASRTM
Hip System, and this Court granted DePuy’s Motion to Stay Pending Transfer to MDL No. 2197.
In another ASRTM Hip case, Walker v. DePuy Orthapaedics, this court remanded the case to state

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court after considering an issue under state law and finding that there was no diversity
jurisdiction because the two non-diverse defendants had not been fraudulently joined.
This case involves the same factual inquiries that will be present in the ASRTM Hip
Systems product liability actions generally—though, Plaintiff raises additional claims against the
non-diverse defendants and bases her claims on statutory and common law unique to South
Carolina. DePuy is the manufacturer of the ASRTM Hip Systems, and Macari Medical, Inc. and
William Macari (“the Macari Defendants”) are the South Carolina distributors of the DePuy
ASRTM Hip Systems.

Plaintiff originally filed this case in the Richland County Court of

Common Pleas and alleged the following causes of action against all of the Defendants: strict
liability, negligence or gross negligence, breach of implied warranty, and breach of express
warranty. DePuy then removed the action to this Court claiming that the Macari Defendants
were fraudulently joined and that diversity jurisdiction exists in this case. Plaintiff has filed a
Motion to Remand the instant action to state court, asserting that the Macari Defendants were not
fraudulently joined and that, as such, diversity jurisdiction does not exist in the present case.
(ECF No. 9). Plaintiffs also filed a Motion to Expedite the hearing regarding the Motion to
Remand. (ECF No. 10). Defendant DePuy has filed a Motion to Stay, requesting that this Court
stay all proceedings pending transfer to MDL No. 2197. (ECF No. 11).
Since the initial removal of this case to federal court, a conditional transfer order was
filed; however, a notice of opposition was also filed, and the Judicial Panel on Multidistrict
Litigation has not yet ordered that the transfer become official. As such, this Court retains
jurisdiction, and the Chairman of the Panel has indicated that this Court “should feel free to rule
on any pending motions, including, but not limited to, motions for remand to state court.
Particularly where such motions involve an issue or issues unlikely to arise in the MDL, their

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early resolution may be in the interest of the involved courts and parties.” Letter from Chairman
of the Panel—to Transferor Judge.
II.

Legal Standard
A.

Standard for Removal

A state action must be within the original jurisdiction of the district court to be removed
to federal court. See 28 U.S.C. § 1441. Original jurisdiction exists in “all civil actions where the
matter in controversy exceeds the sum of $75,000, exclusive of interests and cost, and is between
. . . citizens of different States.” 28 U.S.C § 1332(a)(1). The party seeking removal bears the
burden of proving federal jurisdiction has been properly invoked.

Sonoco Prods. Co. v.

Physicians Health Plan, Inc., 338 F.3d 366 (4th Cir. 2003) (citing Mulcahey v. Columbia
Organic Chems. Co., 29 F.3d 148, 151 (4th Cir. 1994)).
The fraudulent joinder doctrine permits removal when a non-diverse party is or has been
a defendant in the case and where “there is no possibility that the plaintiff would be able to
establish a cause of action against the in-state defendant in state court.” Hartley v. CSX Transp.,
Inc., 187 F.3d 422, 424 (4th Cir. 1999) (internal quotation marks and emphasis omitted). The
burden to prove such fraudulent joinder is “heavy” because “the defendant must show that the
plaintiff cannot establish a claim against the nondiverse defendant even after resolving all issues
of fact and law in the plaintiff’s favor.” Marshall v. Manville Sales Corp., 6 F.3d 229, 232–233
(4th Cir. 1993). However, in determining whether an attempted joinder is fraudulent, “the court
is not bound by the allegations of the pleadings, but may ‘consider the entire record, and
determine the basis of joinder by any means available.’” AIDS Counseling & Testing Centers v.
Group W Television, Inc., 903 F.2d 1000, 1004 (4th Cir. 1990).

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B.

Power to Stay

This Court’s power to stay is well established. It is “incidental to the power inherent in
every court to control the disposition of the causes on its docket with economy of time and effort
for itself, for counsel, and for litigants.” Landis v. N. Am. Co., 299 U.S. 248, 254 (1936).
III.

Analysis
A.

Motion to Remand

The issue in the motion to remand is whether Plaintiff has fraudulently joined the Macari
Defendants. Following the argument made in the Walker case, Plaintiff argues that there is at
least the possibility that she will succeed in her various causes of action and that she has not
fraudulently joined the Macari Defendants.
Defendant DePuy asserts that it has raised a different jurisdictional issue from the issue in
Walker.

Here, DePuy argues that the non-diverse defendants (the Macari Defendants) are

fraudulently joined because the claims alleged against them are preempted by federal law. The
doctrine of preemption is set forth in the Supremacy Clause and requires that where federal- and
state-law conflict, only federal law applies. U.S. Const. art. VI, cl. 2. While this court has yet to
consider the preemption issue with respect to these types of cases, the issue has been raised in
ASRTM cases throughout the country, and it is currently pending before the MDL court in
multiple motions to remand involving distributors and field representatives who were allegedly
fraudulently joined to defeat subject matter jurisdiction. According to DePuy, “the only factual
allegations leveled at the Macari Defendants relate to a single theory of liability—the alleged
failure to warn of risks related to the DePuy ASRTM—which is predicated on the assumption that
the Macari Defendants could have provided different, stronger warnings to Plaintiff or her
surgeon.” (ECF No. 22, p. 3). However, DePuy asserts that the federal Food, Drug & Cosmetic

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Act’s “misbranding” provision barred the Macari Defendants from using any warning different
from the one approved by the FDA. As such, in this case, federal-law prohibiting misbranding
trumps the state-law duty to provide a stronger warning. As mere distributors of the implants,
the Macari Defendants did not have the ability to independently change the label.

Thus,

Plaintiff’s claims against these defendants are preempted.
Plaintiff only briefly addressed the issue of preemption in her Motion to Remand. She
argues that Defendant’s removal is based upon its characterization of her state law claims as
“failure to warn” claims and that her Complaint reveals far more extensive allegations than
failure to warn.
B.

Motion to Stay

DePuy urges this Court to stay all proceedings and to vacate all deadlines in this action
pending the transfer of this case to the Northern Distict of Ohio to become part of MDL No.
2197. DePuy points out that 176 stays have been granted by federal courts with ASRTM Hip
System cases pending before them.
DePuy argues that a stay of the instant case would advance the purposes of the MDL and
would not prejudice the parties. “A short stay will ensure that this action proceeds in an orderly,
coordinated fashion under the direction of Judge Katz. A stay will facilitate his efficient,
uniform resolution of pretrial issues common to all of these federal ASRTM Hip System actions.”
(ECF No. 11-1). DePuy further points out that duplication of case management tasks by multiple
courts not only is an uneconomical use of judicial resources, but also could lead to inconsistent
rulings by different courts considering identical issues.

See Nguyen v. BP Exploration &

Production, Inc., 2010 WL 3169316, at *2 (S.D. Tex. Aug. 9, 2010) (“Defendants face a
significant risk of inconsistent pretrial rulings by different courts if there is no stay in effect until

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the Panel issues its decision.”). Furthermore, DePuy indicates that the company has set up a
process for patients to be reimbursed for expenses relating to recall-related medical care and
medical treatment.

As such, Plaintiff would not be prejudiced by a stay in that sense.

Additionally, DePuy argues that Plaintiff will be spared some costs related to pre-trial motions
and discovery by staying the action.
Plaintiff disagrees that she would not be prejudiced by a stay pending transfer to the
MDL. Plaintiff argues that if the case is stayed, then the Plaintiff will be forced to shoulder the
delays and additional costs if counsel is required to argue the motion to remand in Ohio. As
such, Plaintiff asserts that a stay would result in both a temporal delay and unnecessary economic
hardship. Plaintiff further submits that DePuy’s contentions in this case are essentially the same
as those in the Walker case and that this court should remand this case as it did in Walker.
IV.

Conclusion
This court is persuaded that this case should be stayed pending transfer to MDL No.

2197. In the interest of consistency in the resolution of pretrial matters, the court declines to rule
on Plaintiff’s Motion to Remand, leaving that decision to Judge Katz, who has a number of other
motions to remand pending before him where the issue of preemption has been raised.
Accordingly, Defendant DePuy’s Motion to Stay (ECF No. 11) is granted; Plaintiff’s Motion to
Expedite (ECF No. 10) is moot. The court declines to rule on Plaintiff’s Motion to Remand
(ECF No. 9).
IT IS SO ORDERED.

August 15, 2012
Columbia, South Carolina

Joseph F. Anderson, Jr.
United States District Judge

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