Barry v. 3M Company

Background

Rickey Barry filed the action in the Montana First Judicial District Court against 3M Company and CMC Missoula, Inc. In an amended complaint, he named 3M and RCHP Billings-Missoula, LLC. Barry alleged that he developed a periprosthetic joint infection after undergoing total hip replacement surgery in February 2018 during which a Bair Hugger warming system was used. He alleged that contaminants entered his open surgical wound because of defects in the warming system and that RCHP sold him the Bair Hugger blanket used during the surgery.

3M removed the case to federal court based on diversity jurisdiction, which generally requires the parties to be citizens of different states and the amount in controversy to exceed $75,000. 3M stated that it was a Delaware corporation with its principal place of business in Minnesota, that Barry was a citizen of Montana, and that the complaint did not plead RCHP’s citizenship. 3M argued that RCHP’s citizenship should be disregarded because Barry had fraudulently joined RCHP to defeat federal jurisdiction.

After removal, RCHP filed a motion for summary judgment, and 3M sought to stay the proceedings pending transfer to the District of Minnesota for inclusion in the multidistrict litigation. The Judicial Panel on Multidistrict Litigation transferred the case to the District of Minnesota. Barry then renewed his motion to remand. RCHP filed an opposition after the deadline without permission; the Court disregarded that response and denied as moot Barry’s motion to strike it.

Fraudulent Joinder

Under Eighth Circuit law, a party is fraudulently joined when there is no reasonable basis in fact and law for a claim against that party. If state law might impose liability on the nondiverse defendant under the alleged facts, the claim is “colorable,” and fraudulent joinder has not been shown. The court must resolve factual and legal ambiguities in the plaintiff’s favor and generally should leave doubtful state-law questions to the state courts.

Barry alleged that RCHP was a “seller” of the Bair Hugger blanket under Montana Code section 27-1-719 and was strictly liable for injuries caused by the allegedly defective product. 3M argued that RCHP, as a healthcare provider, was not a statutory seller. The Court found an arguable reasonable basis for predicting that Montana law might impose liability on RCHP and left the question of whether RCHP was a statutory seller to the Montana state courts.

3M also argued that Barry’s claim was barred because he had not complied with the Montana Medical Legal Panel Act. The Court again found an arguable reasonable basis for liability and left the question of whether that Act applied to Barry’s claim against RCHP to the Montana state courts.

The parties also disputed whether Barry’s claim against RCHP was timely under Montana’s statutes of limitations. The Court found an arguable reasonable basis for predicting that state law might impose liability and left the timeliness issue to the Montana state courts.

Finally, 3M argued that Barry did not genuinely intend to pursue his claim against RCHP. The Court assumed, without deciding, that a lack of genuine intent to pursue a claim could support fraudulent joinder. But it concluded that 3M had not shown that Barry lacked such an intent.

Ruling

The Court concluded that Barry did not fraudulently join RCHP. Because RCHP’s presence defeated the asserted diversity jurisdiction, the Court held that it lacked subject-matter jurisdiction and remanded Case No. 23-cv-3072 to the Montana First Judicial District Court, Lewis and Clark County.

The Court granted Barry’s Motion for Remand, denied as moot Barry’s motion to strike RCHP’s late response, and denied Barry’s request for attorney’s fees and costs. The Court did not decide whether Montana law ultimately permits Barry’s product-liability claim against RCHP, whether the Medical Legal Panel Act applies, or whether the claim is timely; it left those issues to the Montana state courts.