Opinion
Case No. 21-cv-00406
2021-05-11
Frank MAKOSKI, et al., Plaintiffs, v. ZIMMER HOLDINGS, INC., et al., Defendants.
Justin D. Gould, Richard L. Demsey, Law Office of Richard L. Demsey, Cleveland, OH, for Plaintiffs. Charles A. Bowers, Ryan C. Edwards, Taft Stettinius & Hollister, Cleveland, OH, Clark A. Belanger, Faegre Drinker Biddle & Reath, Fort Wayne, IN, James A. Frederick, Faegre Drinker Biddle & Reath, Washington, DC, for Defendants Zimmer Holdings, Inc. also known as Zimmer Biomet Holdings, Inc., Zimmer, Inc., Zimmer US, Inc. also known as Zimmer Biomet US, Zimmer Ohio, S.L. Klabunde Corporation, Scott L. Klabunde, Ray Hinch. Charles A. Bowers, Ryan C. Edwards, Taft Stettinius & Hollister, Cleveland, OH, for Defendant John Doe and/or John Doe, Inc. 1-10.
Justin D. Gould, Richard L. Demsey, Law Office of Richard L. Demsey, Cleveland, OH, for Plaintiffs.
Charles A. Bowers, Ryan C. Edwards, Taft Stettinius & Hollister, Cleveland, OH, Clark A. Belanger, Faegre Drinker Biddle & Reath, Fort Wayne, IN, James A. Frederick, Faegre Drinker Biddle & Reath, Washington, DC, for Defendants Zimmer Holdings, Inc. also known as Zimmer Biomet Holdings, Inc., Zimmer, Inc., Zimmer US, Inc. also known as Zimmer Biomet US, Zimmer Ohio, S.L. Klabunde Corporation, Scott L. Klabunde, Ray Hinch.
Charles A. Bowers, Ryan C. Edwards, Taft Stettinius & Hollister, Cleveland, OH, for Defendant John Doe and/or John Doe, Inc. 1-10.
OPINION AND ORDER
J. Philip Calabrese, United States District Judge
Plaintiffs Frank Makoski and Susan Makoski filed suit in State court against Zimmer Holdings, Inc. a/k/a Zimmer Biomet Holdings, Inc., Zimmer, Inc., and Zimmer US, Inc. a/k/a Zimmer Biomet US (collectively, the "Zimmer Defendants") and S.L. Klabunde Corporation dba Zimmer Ohio, Scott Klabunde, and Ray Hinch (collectively, the "Distributor Defendants"). Plaintiffs’ complaint asserts various claims based on injuries Mr. Makoski allegedly sustained following his left total hip arthroplasty involving medical devices the Zimmer Defendants manufactured. Specifically, Plaintiffs allege the Zimmer Defendants and the Distributor Defendants are liable under theories of defective design (Count I), failure to warn (Count II), the Ohio Consumer Sales Practice Act (Count VI), punitive damages (Count VII), and a derivative loss of consortium claim (Count VIII). Plaintiffs also proceed with claims of manufacturing defect (Count III), breach of express warranty (Count IV), and breach of implied warranty against only the Zimmer Defendants (Count V).
Although S.L. Klabunde Corporation and Mr. Hinch are Ohio residents, The Zimmer Defendants removed the case on the basis of diversity jurisdiction. Plaintiffs move to remand and for attorneys’ fees. For the reasons that follow, the Court finds that the Distributor Defendants were fraudulently joined and, therefore, DENIES Plaintiffs’ motion to remand. Accordingly, the Court dismisses Distributor Defendants from the case.
STATEMENT OF FACTS
Mr. Makoski underwent total left hip replacement surgery on September 20, 2010. (ECF No. 1-2, ¶ 2, PageID #24.) Mr. Makoski's physician implanted the Zimmer Versys Hip System into Mr. Makoski during the surgery. (Id. , ¶ 7, PageID #25.) Following his surgery, Mr. Makoski began experiencing pain and other side effects, which required a second surgery in January 2019. (Id. , ¶ 49, PageID #33.) Plaintiffs allege that before Mr. Makoski's second surgery, laboratory studies showed he had an elevated cobalt level. (Id. , ¶ 49, PageID #33.) Due to the failure of the second surgery, Mr. Makoski underwent a third surgery, also in 2019. (Id. )
STATEMENT OF THE CASE
As alleged in the complaint, Plaintiffs reside in Ohio. (Id. , ¶ 7, PageID #25.) The Zimmer Defendants are organized under the laws of Delaware, with their principal place of business in Indiana. (Id. , ¶¶ 7–9, PageID #25; ECF No. 1, ¶¶ 4–6, PageID #2.) According to the complaint, Defendant S.L. Klabunde Corporation dba Zimmer Ohio ceased operations by November 2017, but was previously incorporated under the laws of Ohio with its principal place of business in Ohio. (ECF No. 1-2, ¶¶ 13, 14, PageID #26.) Defendant Scott Klabunde, at the time the medical device was implanted in Mr. Makoski, was an officer of Defendant S.L. Klabunde Coporation. (Id. , ¶ 16, PageID #26.) Defendant Ray Hinch was an officer of S.L. Klabunde Corporation and is a resident of the State of Ohio. (Id. , ¶¶ 16, 17, PageID #26.)
Plaintiffs allege the Distributor Defendants were "involved extensively in the product's promotion, distribution, supply and sale throughout Ohio and specifically related to the devices ultimately implanted in Plaintiff." (Id. , ¶ 21, PageID #27.) Further, they allege the Distributor Defendants owed various duties to Plaintiffs and breached those duties by, among other things, making "negligent misrepresentations regarding the safety and efficacy of the dangerous medical devices." (Id. , ¶ 22, PageID #28.) Specifically, Plaintiffs claim the Distributor Defendants were responsible for "educating Plaintiff's orthopaedic surgeons regarding the claimed advantages" of the Zimmer Defendants’ products. (Id. , ¶ 51, PageID #33.)
In the notice of removal, the Zimmer Defendants acknowledge that the Distributor Defendants lack complete diversity because S.L. Klabunde Corporation was incorporated under Ohio law with a principal place of business in Ohio and Mr. Hinch resides in Ohio. (ECF No. 1, ¶¶ 8–10, PageID #2.) Nonetheless, Defendants contend removal is appropriate based on Plaintiffs’ fraudulent joinder of the Distributor Defendants. (Id. , PageID #4–10.) To support this argument, Defendants attach declarations of S.L. Klabunde Corporation (ECF No. 1-4), Mr. Klabunde (ECF No. 1-5), and Mr. Hinch (ECF No. 1-6).
ANALYSIS
Federal courts have limited jurisdiction, possessing only that power the Constitution and statutes authorize. Kokkonen v. Guardian Life Ins. Co. of America , 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994). A defendant may remove a case to federal court only if it could have been filed there in the first place. Strong v. Telectronics Pacing Sys., Inc. , 78 F.3d 256, 256 (6th Cir. 1996). Further, the federal court has jurisdiction if the matter in controversy exceeds $75,000 and where the controversy is between "citizens of different states." 28 U.S.C. § 1332. Diversity jurisdiction requires complete diversity of citizenship, meaning that no plaintiff resides in the same state as any defendant. Glancy v. Taubman Ctrs., Inc. , 373 F.3d 656, 664 (6th Cir. 2004) (citing Caterpillar, Inc. v. Lewis , 519 U.S. 61, 68, 117 S.Ct. 467, 136 L.Ed.2d 437 (1996) ).
As the party invoking federal jurisdiction, a defendant seeking to remove the case bears the burden of establishing that the Court would have had original jurisdiction if Plaintiffs filed suit here. See, e.g. , Conrad v. Robinson, 871 F.2d 612, 614 (6th Cir. 1989). Courts strictly construe the removal statute and resolve all doubts in favor of remand. Eastman v. Marine Mech. Corp. , 438 F.3d 544, 549–50 (6th Cir. 2006).
I. Fraudulent Joinder
Under the law of this Circuit, fraudulent joinder of non-diverse defendants will not defeat removal on diversity grounds. See Alexander v. Electronic Data Sys. Corp. , 13 F.3d 940, 949 (6th Cir. 1994). Fraudulent joinder occurs where a complaint names a party against which there is no colorable cause of action. Walker v. Philip Morris USA, Inc. , 443 F. App'x 946, 951 (6th Cir. 2011) (citation omitted). This standard requires the absence of a reasonable basis in law or fact for the claims asserted:
There can be no fraudulent joinder unless it be clear that there can be no recovery under the law of the state on the cause alleged or on the facts in view of the law .... One or the other at least would be required before it could be said that there was no real intention to get a joint judgment, and that there was no colorable ground for so claiming.
Alexander , 13 F.3d at 949 (quoting Bobby Jones Garden Apartments, Inc. v. Suleski , 391 F.2d 172, 176 (5th Cir. 1968) ); see also Walker , 443 F. App'x at 951.
The removing party bears the burden of proving fraudulent joinder. Alexander , 13 F.3d at 949. To do so, a defendant may present evidence and not merely rely on the allegations of the complaint. See Casias v. Wal-Mart Stores, Inc. , 695 F.3d 428, 433 (6th Cir. 2012) ; King v. Centerpulse Orthopedics, Inc. , No. 1:05-CV-1318, 2006 WL 456478, at *1, 2006 U.S. Dist. LEXIS 7028 (N.D. Ohio Feb. 24, 2006). But consistent with resolving doubts in favor of remand, the Court must give Plaintiffs the benefit of the doubt on all disputes of fact and any ambiguities in the law. Coyne ex rel. Ohio v. American Tobacco Co. , 183 F.3d 488, 493 (6th Cir. 1999). For these reasons, the burden to demonstrate fraudulent joinder "is indeed a heavy one." King , 2006 WL 456478, at *2, 2006 U.S. Dist. LEXIS 7028 (quoting Fields v. Reichenberg , 643 F. Supp. 777, 779 (N.D. Ill. 1986) ).
I.A. Defective Design (Count I) and Failure to Warn (Count II)
In Counts I and II, Plaintiffs bring claims under Ohio's Product Liability Act. Count I asserts a claim for defective design under Section 2307.75 of the Ohio Revised Code against all Defendants. With respect to the Distributor Defendants, this count alleges that they were "engaged in the business of marketing, distributing and selling orthopedic hip implants" and "had a duty to place into the stream of commerce, distribute, market, promote and sell the Zimmer Hip System so that it was neither defective nor unreasonably dangerous." (ECF No. 1-2, ¶¶ 65, 66, PageID #35–36; see also id. , ¶ 67, PageID #36.) In Count II, Plaintiffs bring a failure-to-warn claim against all Defendants under Section 2307.76 alleging that "the Zimmer Hip System was defective and unreasonably dangerous when it left the possession of Defendants" and that Defendants "failed to adequately warn" of its risks. (Id. , ¶¶ 88, 95, PageID #40–41.)
I.A.1. Liability as a Manufacturer
Under the Ohio Product Liability Act, a manufacturer may have liability for design defects or failure to warn. Ohio Rev. Code §§ 2307.73(A) & 2307.75(D). On their face, these statutes apply specifically to manufacturers. For example, Section 2307.73(A) begins by stating plainly that a "manufacturer is subject to liability ...." And Section 2307.75(D) provides that a medical device is not defective "if the manufacturer of the ... medical device provides adequate warning and instruction." Also, the statute ties the state-of-the-art defense (whether a feasible alternative design is available) to the time when the product left the control of its manufacturer. Id. § 2307.75(F). Under the statute, a manufacturer "means a person engaged in a business to design, formulate, produce, create, make, construct, assemble, or rebuild a product or a component of a product." Id. § 2307.71(A)(9). In this regard, the record shows that the Distributor Defendants did not design, produce, or make the device used in Mr. Makoski's hip replacement surgery in 2010. (ECF No. 1-4, ¶¶ 6–12, PageID #55–56; ECF No. 1-5, ¶¶ 6–9, PageID #59; ECF No. 1-6, ¶¶ 6–9, PageID #62.) Against the undisputed evidence in the record, Plaintiff maintains that the Court may not contradict the allegations of the complaint at this stage of the proceedings, particularly on the basis of declarations instead of affidavits. (ECF No. 15, PageID #280.) But this position overlooks the procedural posture of the case, which does not limit the Court to the pleadings and permits the consideration of evidence. Further, federal law allows the use of declarations in place of affidavits. See 28 U.S.C. § 1746. Under the Ohio Product Liability Act, the Court finds the Distributor Defendants are not manufacturers.
I.A.2. Supplier Liability
But the Distributor Defendants may still have liability as suppliers. The statute defines a supplier as anyone who participates in placing a product in the stream of commerce, Ohio Rev. Code § 2307.71(A)(15)(a)(i), and the Distributor Defendants concede they are suppliers under this definition, (ECF No. 8-1, PageID #140).
Suppliers may be liable where (a) the supplier was negligent and its negligence proximately caused injury; or (b) the product did not conform to a representation the supplier made when the product left its control and that representation and failure to conform to it proximately caused injury. Ohio Rev. Code § 2307.78(A). Liability under this statute requires independent or express conduct of a supplier. That is, the supplier must make a representation or act negligently. See, e.g. , Thompson v. Sunbeam Prods. , No. 2:10-cv-98, 2011 WL 4502049, at *13–14, 2011 U.S. Dist. LEXIS 110677 (S.D. Ohio Sept. 28, 2011) ; Welch Sand & Gravel v. O&K Trojan , 107 Ohio App.3d 218, 228–29, 668 N.E.2d 529, 536–37 (1995).
Here, the record contains no evidence of an independent representation any of the Distributor Defendants made. Indeed, the complaint fails to distinguish between the Zimmer Defendants and the Distributor Defendants in this regard and at most supports an inference that the Distributor Defendants passed along allegedly defective warnings the manufacturers created. (ECF No. 1-2, ¶¶ 88, 95, PageID #40–41.) In other words, the record provides no evidence the product may not have conformed to a representation of the Distributor Defendants because Plaintiff has failed to point to any representation the Distributor Defendants made.
Similarly, the record fails to show an independent act of any Distributor Defendant that may be negligent. At most, even accepting the allegations in the complaint as true, there are no well pleaded factual allegations supporting even an inference that the Distributor Defendants may have liability as suppliers under the Ohio Product Liability Act. See, e.g. , Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ("Nor does a complaint suffice if it tenders naked assertions devoid of further factual enhancement."); Eidson v. Tennessee Dep't of Children's Servs. , 510 F.3d 631, 634 (6th Cir. 2007) (recognizing that courts do not accept "[c]onclusory allegations or legal conclusions masquerading as factual allegations[.]"). In other words, no alleged facts in the complaint satisfy the requirement of Ohio law that, for a supplier to have liability, it must have undertaken its own separate, independent conduct. Nor is there any factual basis in the record for such claims. (See ECF No. 8-3, ¶¶ 9–14, PageID #180–81; ECF No. 8-5, ¶¶ 9–12, PageID #187–88.) For example, Plaintiffs provide no factual support for the allegation that the Distributor Defendants "failed to convey adequate warnings" to Mr. Makoski's physicians. (ECF No. 1-2, ¶ 22, PageID #27.) Under Ohio law, to establish that a supplier was negligent for failure to warn about the dangers of a product, a plaintiff "must present evidence that the supplier knew or should have known in the exercise of ordinary care, of the risk of the hazard to which it failed to warn." Estate of Blandford v. A.O. Smith Corp. , 8th Dist. Cuyahoga No. 103030, 2016-Ohio-2835, ¶ 24 (citations omitted). Plaintiffs failed to present such evidence. In fact, the Distributor Defendants provided evidence that they did not know or have reason to know of any alleged defects in the products at issue. (ECF No. 1-4, ¶ 13, PageID #56; ECF No. 1-5, ¶ 10, PageID #59; ECF No. 1-6, ¶ 10, PageID #62.) Therefore, the record supports the Distributor Defendants’ position that they have no independent basis of liability.
I.B. Ohio's Consumer Sales Practices Act (Count VI)
In Count VI, Plaintiffs assert a claim under the Ohio Consumer Sales Practices Act against all Defendants. Specifically, Plaintiffs allege that Defendants "represented that the Zimmer Hip System was safe and effective" and that Defendants knew that the Zimmer Hip System "would not conform to Defendants’ representations and promises." (ECF No. 1-2, ¶¶ 138–39, PageID #47.) Plaintiffs claim these actions constitute deceptive trade practices in violation of Ohio law. (Id. , ¶ 141, PageID #48.)
Under Ohio law, however, the Consumer Sales Practices Act specifically excludes claims for personal injury: " Section 1345.01 to 1345.13 of the Revised Code do not apply to ... claims for personal injury or death." Ohio Rev. Code § 1345.12(C). Where, as here, the actionable conduct alleged primarily involves a physical injury allegedly due to a product, the Ohio Product Liability Act preempts claims under the Consumer Sales Practices Act. See, e.g. , Kelley v. Insys Therapeutics, Inc. , No. 3:18CV1774, 2019 WL 329600, 2019 U.S. Dist. LEXIS 12507 at *15 (N.D. Ohio Jan. 25, 2019). Therefore, this claim cannot form the basis for remand either.
I.C. Punitive Damages (Count VII) and Loss of Consortium (Count VIII)
Beyond these substantive claims against the Distributor Defendants, Plaintiffs also assert claims for punitive damages and loss of consortium. Neither forms the basis for remand. First, Ohio law does not recognize a claim for punitive damages as a separate cause of action. Rather, it is a measure of damages. Kwikcolor Sand v. Fairmount Minerals, Ltd. , 8th Dist. No. 96717, 2011-Ohio-6646, ¶ 13. Second, under Ohio law, loss of consortium claims are derivative. Simmons v. Ohio Rehab. Servs. Comm'n , 10th Dist. Franklin No. 09AP-1034, 2010-Ohio-1590, ¶ 9. Therefore, any defense to the underlying claims applies to the consortium claim as well. Id. Because Plaintiffs’ other claims against Distributor Defendants fail as a matter of law, they can have no liability for loss of consortium here.
* * *
For the foregoing reasons, the Court determines that Plaintiffs have fraudulently joined the Distributor Defendants, who have carried their burden of showing that there is no reasonable basis in law or fact for the claims Plaintiffs assert against them.
II. Remedy
Where parties are fraudulently joined, they are dismissed from the lawsuit. See West v. Visteon Corp. , 367 F. Supp. 2d 1160, 1165 (N.D. Ohio 2005). Nor is their citizenship considered for purposes of determining diversity jurisdiction. Coyne , 183 F.3d at 493. Once the Distributor Defendants are dismissed, the Court's removal jurisdiction over the case is evident based on the complete diversity of the parties and the amount in controversy. Finally, because the Court determines removal was proper and that it has jurisdiction over this dispute, there is no predicate for Plaintiffs’ motion for an award of attorneys’ fees and costs under 28 U.S.C. § 1447(c).
CONCLUSION
For the foregoing reasons, the Court determines that the Distributor Defendants were fraudulently joined. Therefore, the Court DISMISSES S.L. Klabunde Corporation dba Zimmer Ohio, Scott Klabunde, and Ray Hinch. Further, the Court GRANTS the Distributor Defendants’ motion to dismiss (ECF No. 8) and DENIES Plaintiffs’ motion for remand and for attorneys’ fees (ECF No. 15).