Egregiousness Is Not Required in a Fraudulent Misjoinder Analysis
(September 2011) By Colleen K. O’Brien
For more information, contact Paul
Farquharson.
Stephens v. Kaiser Foundation Health Plan of the Mid-Atlantic States,
No. RDB-11-1603 (U.S. District Court for the District of Maryland, Aug. 18, 2011) | View pdf
This case arose when Stephens filed suit against various
healthcare providers and manufacturers of products, alleging medical malpractice
and products liability claims, in a suit to recover damages for injuries he
sustained after a total hip replacement.
Two of the products manufacturers removed the case to the
federal district court, pursuant to 28 U.S.C. § 1332. This action was in spite
of the fact that complete diversity did not exist, insofar as three of the
defendants were Maryland citizens. The removing Defendants—those involved in the
products liability claim—argued that diversity jurisdiction existed because
Stephens’ fraudulently misjoined two of the healthcare provider Defendants.
The Court concluded that it need not consider whether
the misjoinder was egregious in its fraudulent misjoinder analysis, which
comported with the majority of other district courts considering the issue.
Therefore, the inquiry focused on whether the Plaintiff satisfied the
requirements of Federal Rule of Civil Procedure 20(a), which governs the
permissive joinder of claims.
Rule 20(a), joinder, requires that: 1) the claim must
arise out of the same transaction or occurrence, and 2) there must be a
common question of law or fact to all parties. As to the same transaction or
occurrence test, the Court rejected the removing defendants’ argument that
Mr. Stephen’s medical malpractice and products liability claims were legally
and factually distinct. Rather, it concluded that the medical malpractice
and products liability claims were completely intertwined. In addition, the
Court concluded that there was at least one common question of law or fact;
and moreover, if the Court were to sever the causes of action against the
medical malpractice Defendants and the removing Defendants, each could
utilize the “empty chair” defense.
The Court concluded that there was no fraudulent
misjoinder, and that complete diversity did not exist, in that three of the
Defendants were citizens of Maryland. Therefore, the Court did not have
jurisdiction over the case, and it granted Plaintiff’s Motion to Remand, and
remanded the case to Baltimore City Circuit Court.