In a recent case, the Eighth Circuit illustrated the power that plaintiffs wield in a putative class action through Rule 20 of the Federal Rules of Civil Procedure. In , No. 09-1205, 2010 WL 21090 (8th Cir. Jan. 6, 2010) [PDF], the Eighth Circuit reversed the district court’s denial of the plaintiffs’ motion to remand. The central issue in the case was a thorny issue of misjoinder, i.e., whether plaintiffs’ filing of omnibus-type cases can defeat a removal based on diversity jurisdiction.
Without getting into the intricacies of the procedural history, the crux of the problem is as follows: Unrelated plaintiffs in a group of hormone replacement therapy cases banded together to defeat diversity jurisdiction by combining their claims against multiple defendants in one case, ensuring that at least one plaintiff asserted a claim against a defendant with the same state citizenship. This approach differs from the “traditional” method of diversity destruction, fraudulent joinder, where a plaintiff joins a non-diverse defendant on a meritless claim.
Although the Eighth Circuit did not adopt a position on “fraudulent misjoinder,” its ultimate disposition was not sympathetic towards the defendants. It did not dispute the district court’s findings that the plaintiffs had taken different HRT drugs, made by different manufacturers, prescribed by different doctors in different states, for varying amounts of time causing various injuries. Instead, the Eighth Circuit noted that “[p]laintiffs‘ claims arise from a series of transactions between HRT pharmaceutical manufacturers and individuals that have used HRT drugs.” Id. “Furthermore, given the nature of the plaintiffs’ claims, this litigation is likely to contain common questions of law and fact.” Id. Note that even if there was a misjoinder, there is apparently some level of misjoinder that would still defeat diversity but would not approach the type of “egregious misjoinder” necessary to sustain federal subject matter jurisdiction.
Plaintiffs are structuring suits in the products liability realm to defeat complete diversity but are stopping short of reaching removal jurisdiction under the Class Action Fairness Act of 2005 (“CAFA“). Perhaps the defense bar should remain satisfied with CAFA for the time being. Cases go both ways, but a straight-forward reading of 28 U.S.C. 1446(b) seems to suggest that a court’s analysis of removal should be more akin to a Rule 12(b) motion as opposed to a summary judgment motion. The defense bar may need to balance the need to move its cases forward with the possibility of asking a federal court to gaze into the future, review discovery, define what a transaction or “series of transactions” is in the context of the particular matter, and determine whether any misjoinder is so egregious that federal jurisdiction is proper.