Plaintiff in Phillips v. Medtronic, Inc., 2010 WL 4939997 (D. Mass. Dec. 1, 2010), developed inflammatory masses causing pain and loss of certain functions after hospital treatment that included the implantation of two intrathecal pain pumps. The United States Food and Drug Administration (“FDA”) had issued pre-market approvals for the devices prior to plaintiff’s treatment, but several years after that treatment the manufacturer partially recalled the pumps after discovering an increase in reports of inflammatory masses.

Plaintiff sued both the device manufacturer and hospital in Massachusetts Superior Court, asserting claims of negligence, breach of the implied warranty of merchantability (the Massachusetts near-equivalent of strict liability) and violation of Mass. Gen. L. ch. 93A (the Massachusetts unfair and deceptive practices statute) based on the manufacturer’s allegedly defective design of the devices and both defendants’ failure to warn of the inflammatory mass risk. Plaintiff further contended that the devices’ designs departed from specifications approved by the FDA. Defendants removed the case to the United States District Court for the District of Massachusetts, asserting jurisdiction based on diversity of citizenship because the in-state hospital allegedly had been fraudulently joined, and federal question jurisdiction because plaintiff’s state law claims were allegedly preempted by the Medical Device Amendments (“MDA”) to the Food, Drug, and Cosmetic Act (“FDCA”). Plaintiff moved to remand the case to state court, arguing there was no basis for federal jurisdiction.

The court first noted that a party is not fraudulently joined if there is at least an “arguably reasonable basis” for predicting that state law would allow the claim against that party. Thus, in this case the question turned on whether, under Massachusetts law, the hospital could be deemed a seller or distributor of goods rather than provider of services in supplying the pumps as part of plaintiff’s treatment, such that the hospital could be held liable on a breach of warranty theory. The court found no Massachusetts authority on point and a split of authority in other jurisdictions. Despite finding no clear answer, the court held plaintiff’s warranty claims had a “reasonable basis” in the law, as it was plausible the Massachusetts Supreme Judicial Court would adopt a rule holding the hospital to be a seller or distributor under the circumstances.

Turning to federal question jurisdiction, the court observed that where a complaint on its face asserts only state-law claims, the defense of preemption does not make the claim arise under federal law unless that law effects “complete preemption” of all state law. Complete preemption requires both exclusive federal regulation of the subject matter of the claim and the existence of a federal cause of action addressing wrongs of the same type. The instant action did not satisfy these criteria because, although the MDA contains an express preemption clause, the FDCA does not provide a private right of action for statutory violations. Accordingly, finding it had neither diversity nor federal question jurisdiction, the court remanded the case to state court.