This post is from the non-Reed Smith side of the blog.

Yesterday we brought you the latest InFuse federal appellate court win.  Today we tee up the latest state appellate court win – David v. Medtronic, Inc., 2015 WL 3645254 (Cal. Ct. App. Jun. 12, 2015).

In this InFuse case, 37 plaintiffs filed a single complaint in California state court against Medtronic (manufacturer of the InFuse device); Wyeth (developer of the protein used with the device); and Dr. Gary K. Michaelson whom plaintiffs alleged “invented, in part” the cage component of the device.  Id. at *1-2.  Neither Medtronic nor Wyeth is a California corporation.  Dr. Michaelson, however, is a resident of Los Angeles.  Id.  Only one of the plaintiffs is a California resident.

Medtronic filed motions both to sever each plaintiff’s case and to dismiss all but the California plaintiff on the grounds of forum non conveniens.  The trial court granted both motions and the appellate court upheld those decisions.

As to severance, both courts found that plaintiffs had not satisfied the standards for permissive joinder – a right to relief “arising out of the same transaction, occurrence, or series of transactions or occurrences.”  Id. at *3.  After providing examples of how this standard is properly met, the court distinguished plaintiffs’ claims:

Here, the only common factor is that plaintiffs each had Infuse, or the Infuse protein, implanted in them. Plaintiffs do not allege, for example, that they each had the same class of spinal surgery, based at least in part on the same representation, and that the Infuse failed in each of them in the same way. On the contrary, they had different surgeries, performed by different surgeons, with different knowledge and exposure to different representations by Medtronic. This is not sufficient.

Id. 

Once severed, the trial court then ruled that for the non-California plaintiffs, alternative forums existed (their home states) and that public and private factors weighed in favor of the litigation proceeding in those alternative forums.  Id. at *4.  On appeal, plaintiffs only challenged the first finding – whether alternative forums existed.  Their argument was that “alldefendants, including nominal ones, must be subject to jurisdiction in an alternative forum in order for it to be available.”  Id.  And, that since Dr. Michaelson was not subject to jurisdiction in plaintiffs’ home states, viable alternative forums did not exist.  No one disputed that Dr. Michaelson was at best a nominal defendant (most certainly named to defeat diversity jurisdiction) – so the question was whether there is a nominal defendant exception to the “all defendants” alternative forum rule.  As a question of first impression in California, the court looked to federal precedent holding that a plaintiff cannot be allowed to avoid transfer “merely by including as a defendant a party who cannot be sued in the transferee court, but is of no real importance to the outcome of the case.”  Id. at *5. 

Finding the federal rulings persuasive, the court had to decide what to do with plaintiffs’ claims against Dr. Michaelson – which although tenuous, did not warrant dismissal based on the current motions.  Rather than allow the “peripherally liable” party either to dictate litigation in an inconvenient forum or to escape liability completely, the court decided a second severance was in order.  Plaintiffs’ claims against Medtronic were severed and dismissed on forum non conveniens grounds and the claims against Dr. Michaelson were allowed to proceed in California. When plaintiffs cried duplication – the court reminded them they were free to dismiss their claims against Dr. Michaelson if they so chose.

This is a significant decision for defendants faced with a complaint that tries to use both misjoinder and fraudulent joinder to keep cases in plaintiff-friendly jurisdictions.  We like to see that courts are onto the ruse.