It is not often that we report on the creation of something new in the removal/remand area (ten years ago as to removal before service was one such moment), but today that is what we're doing.
The decision is Markham v. Ethicon, Inc., C.A. No. 19-5464, ___ F. Supp.3d ___, 2020 WL ______, slip op. (E.D. Pa. Jan. 22, 2020), and it involves removal of a pelvic mesh case where the only non-diverse defendant is statutorily immune from suit. A mesh litigation tourist from Washington State filed a Philadelphia mesh suit naming as a defendant a Pennsylvania company that the Philadelphia (and other) court had already held to be immune under the Biomaterials Access Assurance Act ("BAAA"). So far, this is like a number of other cases, such as the Monroe case we recently discussed here.
Analogizing the plaintiff's forum shopping to the Shakespearean character Falstaff from The Merry Wives of Windsor, Markham declares:
[I]n Falstaff and in this case, the concept of fraud is fraught with complexity. Fraud requires some showing of deception. Does analysis of removal require a finding of "fraud?" I conclude there was no "fraud" but removal was appropriate because the joinder was not "proper" for other reasons.
Markham, slip op. at 2 (footnote omitted).
Markham goes through the history of the "fraudulent joinder" concept from its inception in 1906. Id. at 5-7. The conclusion is stated up front:
[W]e must use caution in applying the concept of "fraudulent joinder." Although the phrase has been used by many district courts, it is not necessary to find "fraud" to justify removal. Indeed, . . . the text of the statute does not use the term "fraudulent joinder," but rather simply states that a case may not be removed if any of the parties in interest "properly joined and served" is a citizen of a state in which such action is brought.
Fraudulent joinder, as anyone who has ever asserted it knows, is weighed down with bad precedents that create an extremely high bar to removal. But all §1441(b) requires is that a defendant not be "properly joined." A defendant that is statutorily immune from suit – as the BAAA-protected defendant here – may not be "fraudulently" joined, but sure as hell is "improperly" joined (or not "properly joined") under §1442(b) – without the need to address the hoary criteria for "fraudulent joinder." The "more rational ground" is that "the state court defendant was absolutely immune from being a defendant." Markham, slip op. at 7. The decision analogized to another instance of immunity:
It is just the same as if a plaintiff had sued a judge in Pennsylvania, whether a state or federal judge. As is well known, judges have absolute immunity from liability. Is that a "proper joinder?" Of course not.
Id. at 8.
Given the statutory language of §1441(b), Markham found improper joinder and denied remand on that basis, in preference to the misused and unnecessary fraudulent joinder standard. "The Court does not reach any concept of 'fraudulent joinder' simply because the naming of [the immune defendant] was a nullity and must be ignored. [It] was not "properly joined." Id. Fraudulent joinder was the "wrong test." Id. at 9. Fraudulent joinder "masks otherwise improper joinders by casting them in terms of fraud." Id.
The textual phrase "properly joined" is exclusively a legal phrase and when there is a statute of Congress prohibiting the joinder . . ., th[at] joinder . . . is not fraud but it is truly improper. . . . [T]he "use of 'fraudulent' to describe the issue is a misnomer. There is no need for fraud. No one claims deceptive conduct. The better description used by several courts is 'improper' joinder."
Id. at 9-10 (quoting Monroe v. Ethicon, Inc., 2019 WL 7050130, at *9 n.55 (E.D. Pa. Dec. 23, 2019)). Markman also relies on Smallwood v. Illinois Central Railroad Co., 385 F.3d 568, 571 n.1 (5th Cir. 2004), where the Court of Appeals held, "[w]e adopt the term 'improper joinder' as being more consistent with the statutory language than the term 'fraudulent joinder,' which has been used in the past."
Thus, Markham holds that the "properly joined" language of §1441(b) means goodbye to fraudulent joinder (which was created under earlier, differently-worded predecessor statutes), and hello to "improper joinder" of statutorily immune defendants.
Let's see. . . . Other forms of statutory immunity include workers' compensation employers, Vaccine Act vaccine manufacturers, statutes of repose, "sealed package" statutes protecting "innocent" target="_Blank" distributors, and doctors protected by pre-suit malpractice panel requirements. There are undoubtedly other examples. Remember that removability is judged as of the moment of removal:
In exercising that appellate jurisdiction, the circuits have unanimously and repeatedly held that whether remand is proper must be ascertained on the basis of the pleadings at the time of removal. The rule goes back to Pullman Co. v. Jenkins, 305 U.S. 534, 537- 38 (1939).
Broadway Grill, Inc. v. Visa, Inc., 856 F.3d 1274, 1277 (9th Cir. 2017). Thus, a complaint that fails to plead some statutory exception to immunity for a forum defendant would – for purposes of removal − plead an "improperly joined" defendant.
As we started out, it's not every day that brings something new to the world of removal and remand. As with removal before service, defendants should consider the "improper joinder" concept – in preference to fraudulent joinder – when considering removability of a complaint joining an immune forum defendant.
This article is presented for informational purposes only and is not intended to constitute legal advice.