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 asserted California-law claims for strict product liability, negligence, fraud, negligent misrepresentation, breach of implied warranties, and breach of express warranty against all defendants. The defendants included Johnson & Johnson, related entities, and several distributor defendants, including Thomas P. Schmalzried, M.D. The Johnson & Johnson defendants removed the case to federal court in January 2022. They argued that the distributor defendants had been fraudulently joined and that their California citizenship should therefore be disregarded when determining diversity jurisdiction.

Jurisdiction and Remand

Federal diversity jurisdiction generally requires that every plaintiff be a citizen of a different state from every defendant and that the amount in controversy exceed $75,000. The parties agreed that Bradley and the distributor defendants were California citizens. Their shared citizenship therefore defeated complete diversity unless the distributor defendants had been fraudulently joined.

Fraudulent joinder is an exception under which a federal court may disregard a nondiverse defendant if the removing party shows either actual fraud in the jurisdictional allegations or that the plaintiff cannot establish any cause of action against that defendant under state law. The court emphasized that defendants bear a heavy burden and that remand is required if there is any possibility that a state court could find that the complaint states a claim against a resident defendant.

The Johnson & Johnson defendants argued that federal law preempted Bradley’s claims against the distributor defendants because the Pinnacle Hip System was approved by the Food and Drug Administration and the distributors lacked control over its design and labeling. They relied primarily on Supreme Court decisions involving federal preemption of state-law claims against generic-drug manufacturers.

The court found that those decisions did not explicitly control because the Pinnacle Hip System was a medical device cleared through the Food and Drug Administration’s Section 510(k) process, not an approved drug. The court also noted that the cited regulations did not appear to prohibit distributors from changing labels or packaging for Section 510(k) devices. It further explained that the Section 510(k) process does not impose specific safety or design requirements, but permits marketing when the device is found substantially equivalent to a previously approved device.

The court declined to find fraudulent joinder based on the defendants’ preemption argument. It concluded that the defendants had not met their heavy burden and that complete diversity was absent. The court therefore granted Bradley’s motion to remand.

Attorneys’ Fees and Final Disposition

Bradley requested attorneys’ fees and costs under 28 U.S.C. § 1447(c), arguing that the removal position was frivolous because other courts had rejected the defendants’ preemption argument. The court stated that fees are available only when the removing defendant lacked an objectively reasonable basis for removal. It held that the defendants’ arguments were not frivolous because there was no clearly controlling authority, even though remand was appropriate. The court denied Bradley’s request for attorneys’ fees and costs.

The court granted the motion to remand, set aside its prior remand to San Francisco County Superior Court, and remanded the case to Los Angeles County Superior Court. The clerk was directed to close the federal case, and the court terminated the separate docket matter concerning the requested amendment.