George v. 3M Company

Background

The Georges brought the case in the Montana First Judicial District Court against 3M Company and Logan Health. They alleged that James George developed an infection after a Bair Hugger warming system was used during his knee-replacement surgery in May 2016. They asserted that defects in the system caused contaminants to enter his surgical wound and that Logan Health was strictly liable as a seller of the disposable warming blanket under Montana law. Jomarie George also asserted a loss-of-consortium claim.

3M removed the case to federal court based on diversity jurisdiction, which generally permits federal jurisdiction when opposing parties are citizens of different states and more than $75,000 is at stake. 3M stated that it was a Delaware corporation with its principal place of business in Minnesota and that the Georges were citizens of Montana. 3M argued that Logan Health’s citizenship should be disregarded because the Georges had fraudulently joined it—that is, added it without a reasonable legal or factual basis in order to defeat federal jurisdiction. Logan Health stated that it was organized under Montana law.

The Judicial Panel on Multidistrict Litigation later transferred the case to the District of Minnesota for inclusion in the Bair Hugger products-liability litigation. After the transfer, the Georges renewed their request to remand the case to state court. They also requested attorney’s fees and costs. 3M and Logan Health opposed remand; Logan Health also asked to be dismissed as a fraudulently joined defendant.

Fraudulent Joinder Analysis

The court applied Eighth Circuit law. The party seeking removal bears the burden of establishing federal subject-matter jurisdiction, and doubts about federal jurisdiction are resolved in favor of remand. Fraudulent joinder exists when there is no reasonable basis in fact or law supporting a claim against the nondiverse defendant.

The court concluded that Montana law might impose liability on Logan Health under Montana’s products-liability statute. The court noted the allegations that Logan Health sold the warming blanket for use during surgery and that the product was defective and caused James George’s injuries. Although 3M and Logan Health relied on Montana decisions suggesting that healthcare providers are not product sellers when providing medical services, the court found the issue sufficiently uncertain that the Georges had an arguably reasonable basis for their claim. The court left the question whether Logan Health qualified as a statutory seller for Montana state courts to decide.

The court reached the same conclusion regarding the Montana Medical Legal Panel Act. 3M and Logan Health argued that the Georges’ claims were barred because they had not first applied to the Montana Medical Legal Panel. The court found an arguable reasonable basis for the claims and left the question whether the Act applied to the Montana courts.

The parties also disputed whether the claims were timely under Montana’s two-year or three-year limitation periods. The court concluded that there was an arguable reasonable basis for predicting that Montana law might impose liability and left the timeliness issue for the state courts.

Finally, 3M argued that the Georges had no real intention of pursuing their claims against Logan Health. The court assumed, without deciding, that a lack of intent to pursue a claim could support a finding of fraudulent joinder. It nevertheless concluded that 3M had not shown that the Georges lacked any real intention to pursue their claims.

Ruling

The court held that the Georges had not fraudulently joined Logan Health. Because Logan Health remained a nondiverse defendant, the federal court lacked subject-matter jurisdiction. The court therefore granted the Georges’ motion for remand and ordered Case No. 23-cv-3071 returned to the Montana First Judicial District Court in Lewis and Clark County.

The court did not decide whether Logan Health was a seller under Montana law, whether the Montana Medical Legal Panel Act applied, or whether the claims were timely. It denied the Georges’ request for attorney’s fees and costs.