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Wednesday, October 23, 2019

WLF urges Fifth Circuit to uphold fraudulent-joinder doctrine

By Annie Hunt | Feb 1, 2016

WASHINGTON (Legal Newsline) — The Washington Legal Foundation has called on the U.S. Court of Appeals for the Fifth Circuit to uphold the right of defendants to remove cases to federal court.

The Fifth Circuit sat en banc to hear the WLF’s argument that fraudulently joining extraneous parties for the sake of eliminating federal jurisdiction is a violation of citizens’ right to a fair trial. This increasingly common practice occurs when a plaintiff adds an in-state defendant that, WLF feels, has nothing to do with the case in order to keep the lawsuit in state court.

On Jan. 11, WLF filed an amicus brief in Flagg v. Styrker Corp., contesting that the fraudulent-joinder doctrine ensures that the defendants can have the case heard by a federal court.

The original product liability case alleging violations of Louisiana law was heard by a three-judge panel last September, and the panel knocked the case back to state court. The Fifth Circuit elected to have the case heard by its full roster of judges.

“WLF has litigated this kind of fraudulent-joinder case before. However, this is the most high-profile improper-joinder case currently pending in the federal courts of appeal of which WLF is aware,” said Mark Chenoweth of WLF.

“It is always hard to predict what a court of appeals might do. That said, by taking the case en banc, the Fifth Circuit has already effectively vacated the panel’s opinion. We believe the en banc court is far more likely to render a decision at odds with what the panel decided than one in keeping with what the panel decided originally."

The disputed claim was originally filed in a Louisiana State Court in December 2013 before Stryker had it removed to federal court in April 2014. The plaintiff sued Stryker Corporation, Memometal Corporation, and five other insurances companies over claims that a toe implant had broken, requiring two surgeries.

The case has become an administrative and legal tango, involving the Louisiana Medical Malpractice Act (LMMA) and now the dispute over states' rights and the fraudulent-joinder doctrine.

“If the en banc decision is nonetheless similar to the panel decision in somehow permitting the improper joinder here, then that result would presumably embolden other plaintiffs throughout the Fifth Circuit to improperly join defendants to prevent removal of their cases to federal court,” said Chenoweth.

In WLF’s press release, Chief Counsel Richard Samp appealed to the Constitutional rights of citizens to protect defendants from necessary and unlawful litigation games.

“Courts must not permit the plaintiffs’ bar to frustrate the right of out-of-state defendants to have cases heard in federal court," Samp said.

"The Constitution’s Framers viewed the right to remove cases to federal court as an important safeguard against the bias that state courts sometimes exhibit toward local plaintiffs. Without the fraudulent-joinder doctrine, a plaintiff could always avoid removal by adding random non-diverse defendants to a lawsuit."

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