Simon v. Howmedica Osteonics Corp.

981 F.Supp.2d 1232

Jaimie M. SIMON, Plaintiff,

v.HOWMEDICA OSTEONICS CORPORATION, et al., Defendants.

Case No. 12–61946–CIV.

United States District Court, S.D. Florida.

Nov. 30, 2012.

Jesse Nisan Bernheim, Bernheim & Dolinsky, LLC, Fort Lauderdale, FL, for Plaintiff.

Hildy M. Sastre, Shook Hardy & Bacon, Miami, FL, Edward J. Page, David J. Walz, Carlton Fields, Tampa, FL, for Defendants.

ORDER

CECILIA M. ALTONAGA, District Judge.

THIS CAUSE came before the Court on Plaintiff, Jaimie ¹ Simon's (“Simon['s]”) Motion for Remand and for Leave to Amend the Complaint (“Motion”) [ECF No. 13], filed October 29, 2012. The Court has carefully considered the parties' written submissions and applicable law.

I. BACKGROUND

On September 4, 2012, Simon filed suit in state court seeking damages from Defendants, Howmedica Osteonics Corporation d/b/a Stryker Orthopaedics (“Howmedica”), and Orthopedic Solutions, Inc. d/b/a Stryker South Florida Agency (“Orthopedic Solutions”), on theories of negligence, breach of express warranties, failure to warn, and strict liability. ( See generally Compl. [ECF No. 1–2] ). Simon and Orthopedic Solutions are residents of Florida, while Howmedica is a resident of New Jersey. ( See id. ¶¶ 4, 6, 7). Howmedica manufactured and distributed an allegedly defective product under the name “The Rejuvenate ® System,” a hip replacement prosthesis, to the general public, including to Simon. ( See id. ¶ 10). Orthopedic Solutions was the retailer that distributed and sold the product to the public, including to Simon. ( See id. ¶ 11).

In September 2011, Simon's physician directed the Holy Cross Hospital to order the product for Simon's surgery. ( See id. ¶ 12). The hospital contacted Orthopedic Solutions and ordered the product for Simon. ( See id. ¶ 13). Orthopedic Solutions delivered the product to Simon's physician at the hospital, and the defective device was implanted in Simon on September 12, 2011 during a total right hip replacement surgery. ( See id. ¶¶ 14, 15). As a result, Plaintiff has suffered and continues to suffer damages ( see id. ¶ 16), and she has since undergone revision surgery, where “fretting and corrosion of the device was confirmed as was the presence of a large pseudotumor” ( id. ¶ 25). During the first week of July 2012, “the Defendant” issued a voluntary worldwide recall of the defective product. ( Id. ¶ 17).

Simon asserts five causes of action against Howmedica and Orthopedic Solutions. In Count I, for negligence, Simon alleges Defendants designed, manufactured, and marketed the defective product; and were negligent in its design and manufacture, its testing, and representations made about the product. ( See id. 11–14). Count II states a claim for breach of express warranty, and is again directed to both Defendants. ( See id. 14–16). In Count III, Simon seeks to recover against both Defendants on a theory of strict liability-failure to warn. ( See id. 16–17). In Count IV, Simon states a claim against both Defendants on a theory of strict liability-design defect. ( See id. 17–18). In Count V, Simon states a claim against both Defendants on a theory of strict liability-manufacturing defect. ( See id. 18–19).

Howmedica filed its Notice of Removal (“Notice”) [ECF No. 1] on October 2, 2012, asserting subject matter jurisdiction on the ground of diversity of citizenship under 28 U.S.C. § 1332. ( See id. ¶ 6). Howmedica maintained that Orthopedic Solutions was fraudulently joined and so its presence in the action should not destroy diversity jurisdiction. ( See id. ¶ 9). Thereupon, Howmedica furnished a memorandum of law, in its Notice of Removal, addressing why Howmedica was fraudulently joined and its presence in the suit should be disregarded. ( See id. 3–6). Included with the Notice was the affidavit of the president of Orthopedic Solutions, wherein he states “Orthopedic Solutions is not now nor has it ever been an agent of [Howmedica].” (Affidavit of Frank Russo ¶ 4 [ECF No. 1–3] ). In its Answer [ECF No. 7], Orthopedic Solutions “denies that it has ever done business as Stryker South Florida Agency.” ( Id. ¶ 7). Orthopedic Solutions also raises several affirmative defenses, among them that it did not manufacture, retail, distribute, market, or supply the product; and Plaintiff has no privity with Orthopedic Solutions and so cannot sue for breach of warranties. ( See id. 5–6).

Simon timely filed the Motion for Remand, including with it an affidavit of the senior director of sales operations and finance for Howmedica, and asserting the affidavit shows Orthopedic Solutions was in fact an agent of Howmedica. ( See Notice, Ex. D [ECF No. 13–4] ). According to Simon, Howmedica has failed to establish fraudulent joinder, and consequently the Court lacks subject matter jurisdiction and the case should be remanded forthwith. Simon also challenges that Howmedica has established the jurisdictional amount is satisfied, and requests permission to amend the Complaint to add additional, non-diverse defendants.

II. STANDARDS

A. Request for a Remand

Under 28 U.S.C. § 1447(c), a case removed from state court should be remanded if it appears that it was removed improvidently. The burden of establishing federal jurisdiction falls on the party who is attempting to invoke the jurisdiction of the federal court. See McNutt v. Gen. Motors Acceptance Corp. of Ind., Inc., 298 U.S. 178, 189, 56 S.Ct. 780, 80 L.Ed. 1135 (1936). Moreover, courts should strictly construe the requirements of removal jurisdiction and remand all cases in which such jurisdiction is doubtful. See Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 109, 61 S.Ct. 868, 85 L.Ed. 1214 (1941). When the plaintiff and defendant clash on the issue of jurisdiction, uncertainties are resolved in favor of remand. See Burns v. Windsor Ins. Co., 31 F.3d 1092, 1095 (11th Cir.1994).

B. Complete Diversity and Fraudulent Joinder

District courts have original jurisdiction over civil actions where the matter in controversy exceeds $75,000, and the suit is between citizens of one state and citizens or subjects of a foreign state. See28 U.S.C. § 1332(a). Diversity jurisdiction requires complete diversity, meaning that every plaintiff must be diverse from every defendant. See Triggs v. John Crump Toyota, Inc., 154 F.3d 1284, 1287 (11th Cir.1998) (citing Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353, 1355 (11th Cir.1996)). A corporation is “deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business....” 28 U.S.C. § 1332(c)(1). Moreover, pursuant to 28 U.S.C. § 1441(b), a civil action is removable based upon diversity “only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.” Consequently, a federal court lacks subject matter jurisdiction over a matter brought pursuant to section 1332(a)if a defendant is a citizen of the state in which the action is brought.

Courts have recognized an exception to the complete diversity requirement in cases where a non-diverse party has been fraudulently joined. See Triggs, 154 F.3d at 1287. Where a defendant is fraudulently joined, its citizenship is not considered in determining whether complete diversity exists. See Russell Petro. Corp. v. Environ Prods., Inc., 333 F.Supp.2d 1228, 1231 (M.D.Ala.2004). In that situation, the federal court must dismiss the non-diverse defendant and deny any motion to remand the matter back to state court. See Henderson v. Wash. Nat'l. Ins. Co., 454 F.3d 1278, 1281 (11th Cir.2006).

The Eleventh Circuit has identified three situations in which joinder may be deemed fraudulent: (1) when there is no possibility that the plaintiff can prove a cause of action against the non-diverse defendant; (2) where a plaintiff has pled fraudulent jurisdictional facts to bring the resident defendant into state court; and (3) where a diverse defendant is joined with a nondiverse defendant as to whom there is no joint, several, or alternative liability, and the claim against the diverse defendant has no real connection to the claim against the non-diverse defendant. See Triggs, 154 F.3d at 1287 (citing Coker v. Amoco Oil Co., 709 F.2d 1433, 1440 (11th Cir.1983), superseded by statute on other grounds as stated in Georgetown Manor, Inc. v. Ethan Allen, Inc., 991 F.2d 1533 (11th Cir.1993); Tapscott, 77 F.3d at 1355,abrogated on other grounds by Cohen v. Office Depot, Inc., 204 F.3d 1069 (11th Cir.2000)).

As with any request for a remand, the removing party bears the burden of demonstrating fraudulent joinder, see Crowe v. Coleman, 113 F.3d 1536, 1538 (11th Cir.1997), and must do so by clear and convincing evidence, see Henderson, 454 F.3d at 1281. All factual allegations must be resolved in a light most favorable to the plaintiff. See Crowe, 113 F.3d at 1538. “Where a plaintiff states even a colorable claim against the resident defendant, joinder is proper and the case should be remanded to state court.” Pacheco de Perez v. AT & T Co., 139 F.3d 1368, 1380 (11th Cir.1998) (citing Crowe, 113 F.3d at 1538;Cabalceta v. Standard Fruit Co., 883 F.2d 1553, 1562 (11th Cir.1989)). Further, the claims against those defendants who are alleged to be fraudulently joined must be obviously frivolous, and the mere possibility of stating a valid cause of action makes joinder legitimate. See Accordino v. Wal–Mart Stores East, L.P., No. 3:05–CV–761J32–MCR, 2005 WL 3336503, at *2 (M.D.Fla. Dec. 8, 2005).

C. Request to Add Non–Diverse Defendants

Under Section 1447(e), “[i]f after removal the plaintiff seeks to join additional defendants whose joinder would destroy subject matter jurisdiction, the court may deny joinder, or permit joinder and remand the action to the State court.”

III. ANALYSIS

Howmedica argues only the first basis for a finding of fraudulent joinder: that Simon has failed to demonstrate she has a viable claim against Orthopedic Solutions. To prevent...