Bradley v. Schmalzried, M.D.

Background

William Bradley filed a product-liability action in San Francisco County Superior Court in March 2021. He alleged that he received a Pinnacle Hip System implant during hip-replacement surgery in December 2008; that the implant released toxic amounts of cobalt and chromium; and that the metals damaged tissue and bone around his hip and might have accumulated in his vital organs. He later underwent surgery to remove the implant.

Bradley brought California-law claims for strict product liability, negligence, fraud, negligent misrepresentation, breach of implied warranties, and breach of express warranty against the defendants. The opinion identifies Johnson & Johnson; Medical Device Business Services, Inc.; DePuy Synthes Sales, Inc.; and Johnson & Johnson Services, Inc. as the “J&J Defendants.” It identifies Thomas P. Schmalzried, M.D.; Thomas P. Schmalzried, M.D. A Professional Corporation; Pinnacle West Orthopaedics, Inc.; Gregory T. [the remaining name is not shown in the provided text]; and other defendants as the “Distributor Defendants.”

The J&J Defendants removed the action to federal court in January 2022. They argued that the Distributor Defendants had been fraudulently joined, meaning that Bradley could not possibly establish a state-law claim against them, and that the Distributor Defendants’ California citizenship should therefore be disregarded when determining diversity jurisdiction. Bradley moved to remand the case to state court.

Court’s Analysis

Federal diversity jurisdiction generally requires that every plaintiff be a citizen of a different state from every defendant and that more than $75,000 be at stake. The parties agreed that Bradley and all of the Distributor Defendants were California citizens. Their shared California citizenship therefore defeated complete diversity unless the Distributor Defendants had been fraudulently joined.

The court explained that fraudulent joinder may be shown through actual fraud in pleading jurisdictional facts or by demonstrating that the plaintiff cannot establish a cause of action against the nondiverse defendant in state court. The removing party bears a heavy burden. If there is any possibility that a state court could find that the complaint states a claim against a resident defendant, the federal court must treat the joinder as proper and remand the case. A defense requiring a searching examination of the merits generally does not establish fraudulent joinder.

The J&J Defendants argued that federal law preempted Bradley’s claims against the distributors because the claims involved a medical device cleared by the Food and Drug Administration. They relied primarily on Supreme Court decisions involving federal preemption of state-law claims against generic-drug manufacturers. The court found those decisions did not expressly control because the Pinnacle Hip System was a medical device cleared under the FDA’s Section 510(k) process, not a generic drug subject to the regulations involved in those cases.

The J&J Defendants argued that the Section 510(k) process prevented the distributors from controlling the device’s design and labeling. The court found that the cited regulations did not appear to prohibit distributors from altering labels or packaging and noted that the regulations contemplated repackaging or relabeling devices. The court also noted that Section 510(k) clearance does not impose specific safety or design requirements; it allows a device to be marketed without further regulatory analysis when the FDA finds it substantially equivalent to a previously approved device.

The court declined to find that the Distributor Defendants were fraudulently joined. It therefore concluded that complete diversity was absent and that the federal court lacked subject-matter jurisdiction.

Attorneys’ Fees

Bradley requested attorneys’ fees and costs under 28 U.S.C. § 1447(c), arguing that the removal position was frivolous. The court explained that fees are available when the removing defendant lacked an objectively reasonable basis for removal, but that removal is not objectively unreasonable merely because the arguments ultimately lack merit. Because there was no clearly controlling authority resolving the defendants’ preemption argument, the court found that the argument was not frivolous.

Disposition

The court granted Bradley’s motion to remand, remanded the case to San Francisco County Superior Court, and directed the clerk to close the federal case. The court denied Bradley’s request for attorneys’ fees and costs. Judge Haywood S. Gilliam, Jr., signed the order on July 13, 2022.