Timberlake v. Synthes Spine, Inc. et al
Filing
308
MEMORANDUM OPINION AND ORDER. Defendants' 166 Fourth Motion to Dismiss or in the Alternative, Motion to Sever Scott Plaintiffs Claims is hereby Granted in part and Denied in part, and this action is Dismissed. (Signed by Judge John D. Rainey.) Parties notified. (yhausmann, )
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
VICTORIA DIVISION
CALVIN TIMBERLAKE, et al,
Plaintiffs,
v.
SYNTHES SPINE, INC., et al,
Defendants.
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CIVIL ACTION NO. V-08-4
MEMORANDUM OPINION AND ORDER
Before the Court is Defendants Synthes Spine Company, L.P. (“Synthes Spine”) and
Spine Solutions, Inc.’s (“Spine Solutions”) (collectively “Defendants”) Fourth Amended Motion
to Dismiss, or in the Alternative, Motion to Sever Scott Plaintiffs’ Claims (Dkt. No. 166), to
which Plaintiffs Calvin Timberlake (“Timberlake”) and Anastasia and Matthew Scott (“Scott
Plaintiffs”) have responded (Dkt. No. 171), and Defendants have replied (Dkt. Nos. 299, 303).
Having considered the motion, responses, record, and applicable law, the Court is of the opinion
that Defendants’ motion to dismiss should be GRANTED and their motion to sever should be
DENIED as moot.
I. Background
Timberlake originally filed this action on January 17, 2008, alleging causes of action
against Defendants for common law and statutory fraud/misrepresentation, violation of the FDA
approval process, negligence, strict liability in tort (products), breach of warranty, and civil
conspiracy in connection with Defendant’s ProDisc-L artificial disc replacement device
(“ProDisc”). Timberlake complained that he was surgically implanted with ProDisc on
December 14, 2006 in Bellaire, Texas. Five days later, x-rays revealed that the ProDisc had
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“completely failed,” and as a result, Timberlake underwent a salvage operation to remove the
failed ProDisc. On October 2, 2008, Plaintiffs filed their Second Amended Original Complaint,
joining the Scott Plaintiffs in this action. The Scott Plaintiffs pled identical claims to Timberlake,
with the exception that Ms. Scott was implanted with ProDisc in Germany on October 8, 2006.
Ms. Scott complained that her ProDisc also failed and was removed by a surgeon in Los
Angeles, California on October 11, 2007.
Defendants now move to dismiss the Scott Plaintiffs, or, in the alternative, to sever their
claims.
II. Motion to Sever
As a preliminary matter, the Court addresses Defendants’ motion to sever the Scott
Plaintiffs’ claims from Timberlake’s claims on the grounds that: (1) Timberlake’s claims and the
Scott Plaintiffs’ claims are factually and legally distinct from each other; and (2) severing would
help avoid unnecessary delay. In a February 18, 2011 Memorandum Opinion & Order, the Court
granted Defendants’ Motion for Summary Judgment as to Timberlake and dismissed Timberlake
as a plaintiff in this case. (Dkt. No. 290.) Accordingly, Defendants’ Motion to Sever the Scott
Plaintiffs’ Claims is DENIED as moot.
III. Motions to Dismiss
A. Rule 12(b)(7) Motion to Dismiss for Failure to Join a Necessary Party
Defendants further move to dismiss this action pursuant to Federal Rule of Civil
Procedure 12(b)(7) for failure to join Synthes Haegendorf GmbH (“Synthes Haegendorf”) and
Synthes GmbH, the entities responsible for the design, manufacture, sale, distribution, labeling,
marketing, and foreign approval of Ms. Scott’s ProDisc. According to Defendants, because the
Scott Plaintiffs failed to join Synthes Haegendorf and Synthes GmbH, and because the Court
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lacks jurisdiction over these foreign corporations such that they cannot be joined, the Scott
Plaintiffs’ claims must be dismissed.
1. Legal Standard
Rule 12(b)(7) permits a party to move for dismissal on the grounds that there has been a
failure to join a party as required by Rule 19. A person or entity is a necessary party if:
(1) in the person’s absence complete relief cannot be accorded among those
already parties, or (2) the person claims an interest relating to the subject of the
action and is so situated that the disposition of the action in the person's absence
may (i) as a practical matter impair or impede the person's ability to protect that
interest or (ii) leave any of the persons already parties subject to a substantial risk
of incurring double, multiple, or otherwise inconsistent obligations by reason of
the claimed interest.
FED. R. CIV. P. 19(a). The movant bears the initial burden of demonstrating that an absent party
is necessary, after which the burden then shifts to the party opposing joinder. Hood ex. Rel.
Mississippi v. City of Memphis, 570 F.3d 625, 628 (5th Cir. 2009) (citing Pulitzer-Polster v.
Pulitzer, 784 F.2d 1305, 1309 (5th Cir. 1986)). If the court finds that an absent person or entity is
a required party, but the required party “cannot be joined, the court must determine whether, in
equity and good conscience, the action should proceed among the existing parties or should be
dismissed.” FED. R. CIV. P. 19(b). “In ruling on a dismissal for lack of joinder of an indispensable
party, a court may go outside the pleadings and look to extrinsic evidence.” Davis Companies v.
Emerald Casino, Inc., 268 F.3d 477, 480 n.4 (7th Cir. 2001).
2. Analysis
In light of the foregoing authority, in order for Defendants to prevail on their motion to
dismiss under Rule 12(b)(7), Defendants must show that: (1) Synthes Haegendorf and Synthes
GmbH are necessary parties; (2) their joinder is not feasible; and (3) in their absence, the action
cannot proceed in equity and good conscience.
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a. Are Synthes Haegendorf and Synthes GmbH necessary parties?
Defendants have offered evidence that the ProDisc implanted into Ms. Scott was
manufactured by Synthes Haegendorf in Haegendorf, Switzerland. (Walker Aff., Dkt. No. 299,
Ex. 1 ¶ 6.) Ms. Scott’s ProDisc was marketed and distributed by Synthes GmbH, located in
Oberdorf, Switzerland and Umkirch, Germany. (Id. ¶ 7.) Synthes Haegendorf and Synthes
GmbH are subsidiaries of Synthes Holdings AG, which is in turn a Swiss subsidiary of Synthes,
Inc., a United States corporation. (Croft. Aff., Dkt. No. 299, Ex. 2 ¶ 6.) Defendants are also
subsidiaries of Synthes, Inc., but there has never been any direct connection between Defendants
and Synthes Haegendorf or Synthes GmbH. (Id. ¶ 7.)
Foreign subsidiaries of domestic corporations that are responsible for the design,
manufacture, sale, distribution, labeling, marketing, and foreign approval of foreign products are
necessary parties in product liability actions involving such foreign products. Polanco v. H.B.
Fuller Co., 941 F. Supp. 1512, 1521 (D. Minn. 1996) (citing Freeman v. Northwest Acceptance
Corp., 754 F.2d 553, 559 (5th Cir. 1985) (joinder necessary where subsidiary “becomes more
than a key witness whose testimony would be of inestimable value[, and i]nstead it emerges as
an active participant” in the alleged tort); Gay v. AVCO Financial Services, Inc., 769 F. Supp.
51, 56 (D.P.R. 1991) (“[W]here the subsidiary is an active participant in the activity alleged as
the basis for recovery, the subsidiary should be a party to the action.”); Lopez v. Shearson Am.
Express, Inc., 684 F. Supp. 1144, 1147 (D.P.R. 1988) (“The law appears very clear that where
the subsidiary is the primary participant in a dispute involving both the parent and the subsidiary,
the subsidiary is an indispensable party.”)).
Accordingly, the Court finds that Synthes Haegendorf and Synthes GmbH are parties
whose joinder would be necessary if feasible under Rule 19(a).
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b. Is joinder feasible?
Defendants contend that joinder is not feasible because the Court lacks personal
jurisdiction over Synthes Haegendorf and Synthes GmbH.
In order to satisfy due process requirements, a nonresident defendant must have “certain
minimum contacts” with the forum state such that “the maintenance of the suit does not offend
‘traditional notions of fair play and substantial justice.’” Int’l Shoe Co. v. Wash., 326 U.S. 310,
316 (1945); Ruston Gas Turbines, Inc. v. Donaldson Co., 9 F.3d 415, 418 (5th Cir. 1993).
Minimum contacts with a forum state may give rise to general or specific jurisdiction. Guidry v.
U.S. Tobacco Co., Inc., 188 F.3d 619, 624 (5th Cir. 1999). General jurisdiction exists when a
defendant’s contacts with the forum state are “continuous and systematic” but are not related to
the alleged cause of action. Ruston Gas Turbines, 9 F.3d at 419; Helicopteros Nacionales de
Colombia, S.A. v. Hall, 466 U.S. 408, 415 (1984).
When a nonresident defendant has “purposefully directed its activities at the forum state
and the litigation results from alleged injuries that arise out of or relate to those activities,” the
forum state may exercise specific jurisdiction over a defendant. Cent. Freight Lines, Inc. v. APA
Transport Corp., 322 F.3d 376, 381 (5th Cir. 2003) (quoting Burger King Corp. v. Rudzewicz,
471 U.S. 462, 472 (1985)). The Court must assess the relationship between the defendants, the
forum state, and the litigation to determine “whether the defendant[s] purposefully established
‘minimum contacts’ in the forum state,” so that it was foreseeable “that the defendant[s’]
conduct and connection with the forum state are such that [they] should reasonably anticipate
being haled into court there.” Guidry, 188 F.3d at 624—25 (quoting Burger King, 471 U.S. at
474). The Fifth Circuit has articulated a three-step analysis to determine if specific jurisdiction
exists: (1) whether the defendant has minimum contacts with the forum state, i.e. whether it
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purposely directed its activities toward the forum state or purposely availed itself of the
privileges of conducting activities there; (2) whether the plaintiff’s cause of action arises out of
or results from the defendant’s forum-related contacts; and (3) whether the exercise of personal
jurisdiction is fair and reasonable. Nuovo Pignone, SpA v. STORMAN ASIA M/V, 310 F.3d 374,
378 (5th Cir. 2002).
Defendants have presented evidence that Synthes Haegendorf and Synthes GmbH are
engaged in business related to the European-approved ProDisc in Europe only, and neither
corporation has any presence in the United States or the State of Texas. (Croft Aff. ¶¶ 9, 10.)
Although the Court may have jurisdiction over Synthes, Inc. and its domestic subsidiaries, “[a]s
a general rule . . . , the proper exercise of personal jurisdiction over a nonresident corporation
may not be based solely upon the contacts with the forum state of another corporate entity with
which the [nonresident corporation] may be affiliated.” Freudensprung v. Offshore Technical
Services, Inc., 379 F.3d 327, 346 (5th Cir. 2004) (citing Cannon Mfg. Co. v. Cudahy Packing
Co., 267 U.S. 333, 335 (1925) (declining to attribute, for jurisdictional purposes, presence of
subsidiary in the forum state to nonresident parent corporation where parent and subsidiary
maintained distinct and separate corporate entities); Access Telecom, Inc. v. MCI Telecomm.,
Corp., 197 F.3d 694, 717 (5th Cir. 1999) (“[T]ypically, the corporate independence of companies
defeats the assertion of jurisdiction over one by using contacts with the other.”)). Although “this
principle . . . is not inviolate,” the Scott Plaintiffs have presented no evidence to rebut the
“presumption of institutional independence of related corporate entities.” See Freudensprung,
379 F.3d at 346. In fact, the Scott Plaintiffs have failed to present any evidence that Synthes
Haegendorf and Synthes GmbH have any contacts whatsoever with the United States or with
Texas.
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Accordingly, the Court finds that Synthes Haegendorf and Synthes GmbH are not subject
to the Court’s personal jurisdiction, and their joinder is not feasible.
c. Can this action proceed without Synthes Haegendorf and Synthes GmbH?
Having determined that Synthes Haegendorf and Synthes GmbH are necessary parties
whose joinder is not feasible, the Court must determine whether, in equity and good conscience,
the action should proceed against Defendants Synthes Spine and Spine Solutions, or whether this
action should be dismissed. FED R. CIV. P. 19(b). In making this determination, the Court should
consider:
(1) the extent to which a judgment rendered in the person’s absence might
prejudice that person or the existing parties;
(2) the extent to which any prejudice could be lessened or avoided by:
(A) protective provisions in the judgment;
(B) shaping the relief; or
(C) other measures;
(3) whether a judgment rendered in the person’s absence would be adequate; and
(4) whether the plaintiff would have an adequate remedy if the action were
dismissed for nonjoinder.
Id.
In product liability actions, the absence of a foreign manufacturer or distributor over
which the court lacks jurisdiction generally requires dismissal. For example, in Polanco, the
plaintiff brought a wrongful death action against a United States corporation alleging that her
brother died after becoming addicted to glue manufactured by the corporation’s Guatemalan
subsidiary. Polanco, 941 F. Supp. at 1514—15. The court held that, as the glue’s manufacturer,
the Guatemalan subsidiary was an indispensable party, even though its presence would deprive
the court of jurisdiction:
Equity prohibits this action from proceeding where [the foreign subsidiary
manufacturer] will be unable to defend its products or marketing methods, but
may ultimately face liability as a result of legal determinations made in its
absence. The Court cannot overlook the fact that any trial here will largely be a
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trial of the conduct of [the foreign subsidiary manufacturer]. It will be prejudiced
without the opportunity to participate, and the Court cannot fashion any protection
against this prejudice. Because [the foreign subsidiary manufacturer] is an
indispensable party which may not be joined without depriving the Court of
jurisdiction, the action must be dismissed.
Id. at 1523. The district court in Carl Schroeter Gmbh also dismissed the case for failure to join a
required foreign subsidiary that could not be joined without destroying jurisdiction. Carl
Schroeter Gmbh & KO., KG. v. Crawford & Co., 2009 WL 1408100, *5 (E.D. Pa. May 19,
2009). In analyzing the factors set forth in Rule 19(b), the court explained:
Proceeding without [the foreign subsidiary] would prejudice Plaintiffs because
this Court would be incapable of awarding them any relief. Jurimex Kommerz
Transit G.M.B.H. v. Case Corp., 201 F.R.D. 337, 341 (D. Del. 2001) (noting, in
dismissing for failure to join defendant’s foreign subsidiaries, that “a judgment in
Plaintiffs’ favor maybe ‘hollow’ because the proper defendant was never joined”).
Also, [the foreign subsidiary] would be prejudiced because it would be deprived
of the ability to defend its conduct. See Polanco, 941 F. Supp. at 1523 (absent
subsidiary “[would] be prejudiced without the opportunity to participate, and the
Court cannot fashion any protection against this prejudice”); Gay v. Avco Fin.
Servs., Inc., 769 F. Supp. 51, 57 (D.P.R. 1991) (action against parent based on
subsidiary’s conduct should not proceed without “some form of direct
representation” for the subsidiaries). Furthermore, Plaintiffs could presumably
proceed against [the foreign subsidiary] in [the subsidiary’s home country] to
recover for any losses caused by its negligence.
Id.
Here, Defendants have presented evidence that Synthes Haegendorf and Synthes GmbH
were responsible for the design, manufacture, sale, distribution, labeling, marketing, and foreign
approval of Ms. Scott’s ProDisc. (Walker Aff. ¶¶ 4—8; Croft Aff. ¶¶ 4—5.) Defendants have
presented further evidence that they are separate entities from Synthes Haegendorf and Synthes
GmbH, and they have no overlapping operations or responsibilities with their foreign
counterparts. (Croft Aff. ¶ 9—10.) Defendants’ business activities are limited to the FDAapproved ProDisc in the United States, and Defendants were in no way responsible for Ms.
Scott’s European ProDisc. (Id. ¶ 10.)
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Based on the evidence presented by Defendants, the Court finds that Synthes Haegendorf
and Synthes GmbH have a strong interest in any legal determinations regarding the ProDisc
devices they design, manufacture, sell, distribute, label, and market in Europe—interests that
Defendants could not adequately represent. Because Synthes Haegendorf and Synthes GmbH
cannot adequately defend these interests without being present, their absence would be
prejudicial, and the Court is unable to craft any protection against such prejudice. Finally, the
Scott Plaintiffs have an adequate remedy in that they could proceed against Synthes Haegendorf
and Synthes GmbH in Germany, where Ms. Scott’s disc was implanted, or in Switzerland, where
Ms. Scott’s ProDisc was manufactured.
The Court finds that this action cannot, in equity and good conscience, proceed against
Defendants Synthes Spine and Spine Solutions without the joinder of Synthes Haegendorf and
Synthes GmbH. Accordingly, this action must be dismissed.
B. Rule 12(b)(3) Motion to Dismiss for Improper Venue and Rule 12(b)(6) Motion to
Dismiss for Failure to State a Claim Upon Which Relief Can be Granted
Defendants also move to dismiss the Scott Plaintiffs’ claims pursuant to Rule 12(b)(3) on
the grounds that venue in the Southern District of Texas is improper because none of the parties
reside in the district and no event related to the Scott Plaintiffs’ claims happened within the
district. Defendants further move to dismiss pursuant to Rule 12(b)(6) on the grounds that the
Scott Plaintiffs: (1) failed to meet the Rule 8(a) pleading requirement and (2) failed to allege that
Defendants were the sellers and/or manufacturers of Ms. Scott’s ProDisc as required in Texas
products liability actions. Because the Court has determined that this action should be dismissed
for failure to join Synthes Haegendorf and Synthes GmbH under Rule 12(b)(7), the Court need
not consider Defendants’ motions to dismiss pursuant to Rules 12(b)(3) and 12(b)(6).
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VI. Conclusion
For the reasons set forth above, Defendants’ Fourth Motion to Dismiss, or in the
Alternative, Motion to Sever Scott Plaintiffs’ Claims (Dkt. No. 166) is hereby GRANTED in
part and DENIED in part, and this action is DISMISSED.
It is so ORDERED.
SIGNED this 30th day of June, 2011.
____________________________________
JOHN D. RAINEY
SENIOR U.S. DISTRICT JUDGE
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