Lyon v. DePuy Orthopaedics, Inc.

Background

Deborah Lyon filed the action in San Francisco County Superior Court concerning two hip transplants she received in 2010 and 2011 that used the ceramic-on-metal Pinnacle Hip System device. She asserted claims involving alleged design and manufacturing defects, failure to warn, negligence, negligent misrepresentation, and breach of express and implied warranties.

The complaint named DePuy Orthopaedics, Inc., Johnson & Johnson Services, Inc., Johnson & Johnson, DePuy International Limited, DePuy Products, Inc., and independent contractor and device sales representative Kale Turner. The opinion states that Turner was the only California resident in the action and that the complaint specifically alleged only that he marketed and sold the device, directly or indirectly, to customers in California, including Lyon.

The Removing Defendants removed the action to federal court on August 22, 2019. They argued that diversity jurisdiction existed because Turner had been fraudulently joined, meaning he was included in the case only to defeat federal jurisdiction. Lyon disputed that argument and moved to remand, or return, the case to state court.

The federal multidistrict litigation panel had conditionally identified the action as a potential tag-along case to MDL No. 2244, a proceeding concerning Pinnacle hip-implant products-liability litigation. The panel had not yet issued a final transfer decision when the court considered the stay motion.

Analysis

The court applied three considerations used when deciding whether to stay a case while a multidistrict transfer request is pending: possible harm to the party opposing the stay, hardship to the party seeking the stay if proceedings continue, and the judicial resources saved by avoiding duplicative litigation.

The court found that judicial efficiency favored a stay. The multidistrict court had handled Pinnacle-device products-liability claims since 2011 and had procedures for deciding remand motions involving alleged fraudulent joinder. The court concluded that allowing the multidistrict court to address Lyon’s remand motion would promote consistent results and make use of that court’s greater familiarity with the related litigation.

The court also found that the Removing Defendants could face hardship without a stay. If the case remained in this court and was later transferred, the remand issue could be litigated again. If the case were remanded and a multidistrict court later reached a different conclusion in similar cases, the defendants could be forced to litigate in state court instead of in the multidistrict proceeding.

The court found no cognizable prejudice to Lyon from the limited delay. If the panel refused to transfer the case, Lyon could promptly re-notice her remand motion in this court. If the panel ordered a transfer, she could raise the remand issue with the multidistrict court. The court also stated that the jurisdictional issues appeared complex and similar to issues in other cases transferred to MDL No. 2244.

Disposition

The court granted the Removing Defendants’ motion to stay all proceedings pending the multidistrict litigation panel’s determination whether to transfer the action to MDL No. 2244. It vacated the hearing on the stay motion and the scheduled hearing on Lyon’s motion to remand. Lyon could re-notice the remand motion if the panel refused to transfer the action. The order did not decide the remand motion’s merits or the underlying products-liability claims. Judge Phyllis J. Hamilton signed the order.