Edwards v. Thermigen LLC

Background

Fernando Edwards sued Thermigen LLC over the sale of a medical device that he alleged was useless. His complaint asserted claims under California’s Unfair Competition Law and False Advertising Law, as well as claims for deceit and negligent infliction of emotional distress.

Edwards described himself as the purchaser. But the purchase agreement attached to the complaint listed “Sharon de Edwards, MD OB/GYN” as the party to bill and the “Company,” listed “Sharon de Edwards, MD” as the physician, and listed Edwards as the contact. The agreement required a physician’s or authorized officer’s signature and was signed by Edwards. Edwards is the administrator of his wife’s medical office.

Thermigen moved to dismiss under Federal Rule of Civil Procedure 17, which requires a case to be brought in the name of the real party in interest—the person or entity legally entitled to pursue the claims. The court had previously denied a similar motion without prejudice and said factual and legal questions remained about whether Edwards or the medical office was the proper party.

Court’s reasoning

The court denied the renewed motion. In a diversity case, the question of who is the real party in interest depends on the state law creating the claims. The court held that Thermigen had not adequately addressed the California law governing Edwards’s claims and therefore had not shown that Edwards was not the real party in interest.

The court also relied on Rule 17(a)(3), which generally prevents dismissal for naming the wrong party until that party has been given a reasonable time to ratify the lawsuit, join it, or be substituted. The court concluded that no ruling had yet determined that Edwards was the wrong party, so he had not received the required notice and the reasonable time to correct the issue had not begun to run.

Thermigen also argued that Edwards’s conduct in an earlier state-court case showed that any Rule 17 violation was willful. The court rejected that argument. The state court had ruled that Edwards could not represent the medical office because a corporation must be represented by a licensed attorney, but that ruling did not establish that Edwards was not the real party in interest for the claims in this federal case.

Disposition

Judge Jacquelyn Scott Corley denied Thermigen’s motion to dismiss and granted Edwards’s motion for leave to amend. The court directed Edwards to file the proposed first amended complaint with a redlined or marked version. Thermigen’s response was due December 21, 2022, and the court scheduled an initial case-management conference for January 26, 2023. The order disposed of Docket No. 45.