Brett Strong Lauri Strong v. Telectronics Pacing Systems, Inc. Thomas S. Martin

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Brett STRONG; Lauri Strong, Plaintiffs-Appellants, v. TELECTRONICS PACING SYSTEMS, INC.; Thomas S. Martin, Defendants-Appellees.

No. 94-2213

United States Court of Appeals, Sixth Circuit.

Argued Feb. 5, 1996. Decided March 15, 1996.

Rehearing and Suggestion for Rehearing En Banc Denied April 18, 1996.

make prudential distinctions between what was revealed and what remains privileged. See, e.g.,

In re Sealed Case, 877 F.2d 976, 981 (D.C.Cir.1989) (remanding district court decision finding company waived privilege on six documents by inadvertently disclosing one of the documents, because lower court “did not fully explain why the communications were related“);

United States v. (Under Seal), 748 F.2d 871, 875 n. 7 (4th Cir.1984) (“If any of the non-privileged documents contain client communications not directly related to the published data, those communications, if otherwise privileged, must be removed by the reviewing court before the document may be produced.“);

United States v. Cote, 456 F.2d 142, 145 n. 4 (8th Cir.1972) (requiring in camera review of documents to protect information not already published, for “[t]oo broad an application of the rule of waiver requiring unlimited disclosure might tend to destroy the salutary purpose of the privilege“);

Weil v. Investment/Indicators, Research & Management, Inc., 647 F.2d 18, 25 (9th Cir.1981) (finding waiver “only as to communications about the matter actually disclosed“);

Schenet v. Anderson, 678 F.Supp. 1280, 1284 (E.D.Mich.1988) (“The privilege is waived only as to those portions of the preliminary drafts ultimately revealed to third parties.“).

Accordingly, we reverse the District Court‘s order to the extent it allows the government to ask the attorney unlimited questions about her advice on the entire marketing plan. Instead, the government may ask questions that clearly pertain to the subject matter of the specific points on which a waiver did occur. The District Court will have to decide whether the remaining points in the marketing plan are truly the same subject matter as those in the specific marketing plan points on which there was a waiver and approve or disallow questions on that basis. Ultimately, the District Court may have to determine the scope of waiver on a question-by-question basis. In this regard, the District Court must be guided by fairness concerns. See

In re Dayco Corp. Derivative Securities Litigation, 99 F.R.D. 616, 619 (S.D.Ohio 1983) (“Generally, waiver of a privilege occurs when actions by the holder would make it unfair to insist that the privilege still exists.“) (emphasis added);

In re Von Bulow, 828 F.2d 94, 102 (2nd Cir. 1987) (“Applying the fairness doctrine, we hold therefore that the extrajudicial disclosure of an attorney-client communication—one not subsequently used by the client in a judicial proceeding to his adversary‘s prejudice—does not waive the privilege as to the undisclosed portions of the communications.“) (emphasis added).

III

We therefore AFFIRM the District Court‘s order granting the government‘s motion to compel the laboratory‘s attorney to answer questions about her advice on providing nursing homes free supplies such as glucose strips, lancets, Sharps disposal containers, and glucometers and on billing Medicare for tests performed by nursing home personnel. However, we REVERSE the District Court‘s order allowing the government to compel the attorney to answer questions about her advice on the remainder of the marketing plan except to the extent the District Court finds that the questions involve the same subject matter as those specific points of the plan on which we held the privilege was actually waived or that the fairness doctrine requires further disclosure.

We REMAND the matter to the District Court for further proceedings consistent with this opinion.

Daniel C. Brown (argued), Chambers & Steiner, Kalamazoo, MI, Angela J. Nicita (briefed), Chambers, Steiner, Mazur, Ornstein & Amlin, Detroit, MI, for plaintiffs-appellants.

Robert D. VanderLaan, Schenk & Boncher, Grand Rapids, MI, Gary E. Mitchell, Miller, Canfield, Paddock & Stone, Grand Rapids, MI, Michael J. Weber, James A. Gale (argued and briefed), Feldman, Gale & Weber, Miami, FL, for defendants-appellees.

Before: KENNEDY and SUHRHEINRICH, Circuit Judges, and GILMORE, District Judge.**

KENNEDY, J., delivered the opinion of the court, in which GILMORE, District Judge, joined. SUHRHEINRICH, J. (p. 261), delivered a separate dissenting opinion.

KENNEDY, Circuit Judge.

Plaintiffs appeal a decision of the District Court denying their motion to remand a claim of negligent manufacture of a heart pacemaker to state court and dismissing the claim as preempted by federal law. For the following reasons we REVERSE.

I.

On December 10, 1993, plaintiffs Brett and Lauri Strong, filed a four count complaint in Kent County Circuit Court (Michigan) seeking damages resulting from the malfunctioning of a pacemaker, manufactured by defendant, that had been implanted in the chest of Brett Strong. The complaint alleged that: (1) defendant Telectronics Pacing negligently manufactured the pacemaker; (2) defendant Thomas Martin negligently misevaluated the pacemaker and failed to determine that it was malfunctioning; (3) defendant Martin negligently misrepresented that the pacemaker was functioning properly; and (4) plaintiff Lauri Strong suffered a loss of consortium because of the defendants’ actions.

On January 5, 1994, defendants removed this action to the United States District Court for the Western District of Michigan on the alternative grounds that (1) there was federal question jurisdiction under 28 U.S.C. § 1331 because the Medical Device Amendments to the Food, Drug and Cosmetics Act (“MDA“), 21 U.S.C. § 360, preempted plaintiffs’ action; and (2) there was diversity jurisdiction under 28 U.S.C. § 1332 (based on a theory of fraudulent joinder of defendant Martin). The District Court assumed jurisdiction over the case.

Soon thereafter, defendants filed a motion to dismiss or for summary judgment. Plaintiffs opposed this motion and also filed a timely motion to remand the case to state court. On April 25, 1994, the District Court heard oral argument on both motions.

On September 22, 1994, the District Court issued its opinion and order deciding the two motions. It denied plaintiffs’ motion to remand on the basis that the MDA preempted count I of the complaint and, therefore, the complaint presented a question of federal law over which the District Court had jurisdiction under 28 U.S.C. § 1331. With respect to count I only, the District Court granted defendant Telectronics’ motion to dismiss on the basis that the MDA, 21 U.S.C. § 360k(a), expressly preempts the negligent manufacture claim. The District Court then denied

defendant Martin‘s motion for summary judgment, finding that it was premature given the lack of discovery. Finally, noting that the dismissal of count I extinguished federal jurisdiction, the District Court declined to exercise supplemental jurisdiction over the remaining state law counts and ordered that they be remanded to the Kent County Circuit Court.

II.

On appeal, plaintiffs argue that the District Court erred in denying their motion to remand because the preemptive scope of the MDA is insufficient to create federal question jurisdiction under the “complete preemption” exception to the “well-pleaded complaint rule.” Further, plaintiffs claim that the District Court erred in dismissing their negligent manufacture claim because it is not preempted by the MDA.

Defendants argue that there is federal question jurisdiction under the complete preemption exception to the well-pleaded complaint rule because the MDA both preempts state law and provides exclusive federal remedies for violations of the Act. Defendants also claim that the District Court correctly held that the MDA preempted plaintiffs’ state law negligent manufacture claim.

We conclude that removal was improper and reverse the District Court‘s denial of plaintiffs’ motion to remand.

III.

We review the denial of a motion to remand de novo,

Her Majesty the Queen in Right of the Province of Ontario v. City of Detroit, 874 F.2d 332, 338 (6th Cir.1989), and examine the case solely to determine “whether the case was properly removed to federal court in the first place.”

Fakouri v. Pizza Hut of America, Inc., 824 F.2d 470, 472 (6th Cir.1987).

Ordinarily, a defendant may remove a state court case to federal court only if it could have been brought there in the first place; that is, if the federal court would have original jurisdiction over the case. 28 U.S.C. § 1441(a). Here, because the District Court did not decide whether there was diversity jurisdiction under defendants’ fraudulent joinder theory, the only question is whether there is federal question jurisdiction under 28 U.S.C. § 1331.

This inquiry is guided by the well-pleaded complaint rule, which states that “federal jurisdiction exists only when a federal question is presented on the plaintiff‘s properly pleaded complaint.”

Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 2429, 96 L.Ed.2d 318 (1987). Further, “[f]ederal pre-emption is ordinarily a federal defense to the plaintiff‘s suit. As a defense, it does not appear on the face of a well pleaded complaint, and, therefore, does not authorize removal to federal court.”

Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63, 107 S.Ct. 1542, 1546, 95 L.Ed.2d 55 (1987) (citation omitted).

A corollary of the well-pleaded complaint rule, the “complete preemption” doctrine, holds that when Congress intends the preemptive force of a statute to be so extraordinary that it completely preempts an area of state law, “any claim purportedly based on that pre-empted state law is considered, from its inception, a federal claim, and therefore arises under federal law.”

Caterpillar Inc., 482 U.S. at 393, 107 S.Ct. at 2430. Currently, the Supreme Court has found only two federal statutes to have this broad preemptive scope: § 301 of the Labor Management Relations Act,

Avco v. Aero Lodge No. 735, 390 U.S. 557, 88 S.Ct. 1235, 20 L.Ed.2d 126 (1968), and § 502(a)(1)(B) of the Employee Retirement Income and Security Act,

Metropolitan Life, 481 U.S. 58, 107 S.Ct. 1542, 95 L.Ed.2d 55.

We decline defendants’ invitation to add MDA § 360k(a) to this list and instead hold that count I of the complaint does not present a federal question under 28 U.S.C. § 1331 and was therefore not removable under 28 U.S.C. § 1441.¹

This court‘s recent en banc decision in

Warner v. Ford Motor Co., 46 F.3d 531 (6th Cir.1995), guides our decision. In Warner we considered whether a state age discrimination claim was properly removed to federal court on the grounds that plaintiff‘s claim was preempted by the Employee Retirement Income and Security Act of 1974 (“ERISA“), 29 U.S.C. § 1001.

Id. at 533. The alleged basis of federal jurisdiction was the express preemption provision of ERISA, § 1144, which states that ERISA shall, with certain exceptions, “supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan.” Id. Defendant argued that removal based on the complete preemption corollary of the well-pleaded complaint rule was appropriate because plaintiff‘s claim necessarily called into question the validity of his retirement agreement, which was governed exclusively by ERISA.² Id.

We disagreed. Differentiating ERISA preemption under § 1144 from ERISA preemption under § 1132(a)(1)(B), which creates a federal cause of action for participants and beneficiaries in ERISA plans, we held that while the latter completely preempts state law, the former does not:

Section 1144... allows ERISA to preempt state laws when they “relate to” matters governed by ERISA but does not create a federal cause of action for matters which only “relate to” ERISA‘s field of concern. Thus, § 1144 preemption does not create a federal cause of action itself, and cannot convert a state cause of action into a federal cause of action under the well-pleaded complaint rule. As a consequence, no removal jurisdiction exists under § 1144.

Id. at 534. Thus, Warner reasoned that the congressional intent necessary to confer removal jurisdiction upon the federal district courts through complete preemption is expressed through the creation of a parallel federal cause of action that would “convert” a state cause of action into the federal action for purposes of the well-pleaded complaint rule.

Id. at 534-35.

This analysis controls the case sub judice. Defendants argue that § 360k(a) of the MDA preempts plaintiffs’ negligent manufacture claim.³ However, like its ERISA counterpart § 1144, § 360k(a) expressly preempts certain state requirements, but does not create a parallel federal cause of action. Accordingly, § 360k(a) preemption cannot convert a state cause of action into a federal question under the well-pleaded complaint

rule, and removal was thus improper. See

Warner, 46 F.3d at 534.

We are also unpersuaded by defendants’ argument that because the MDA both preempts state law and provides federal remedies, albeit not to plaintiffs, there is complete preemption. The federal administrative remedies under the MDA are insufficient to evince the clear manifestation of congressional intent necessary to create removal jurisdiction. See

id. at 534-35;

Robinson v. Michigan Consol. Gas Co., 918 F.2d 579, 585-86 (6th Cir.1990).

Finally, as we stated in Warner, “[r]emoval and preemption are two distinct concepts,” and the fact that plaintiffs’ claim might ultimately prove to be preempted does not establish that it is removable to federal court.

Warner, 46 F.3d at 535. Thus, in a nonremovable case such as this, “[t]he federal preemption defense... would be decided in state court and would be subject to review on certiorari in the U.S. Supreme Court.” Id.

IV.

For the foregoing reasons, the decision of the District Court is hereby REVERSED and the case is REMANDED for further proceedings not inconsistent with this opinion.

SUHRHEINRICH, Circuit Judge, dissenting.

Because I believe that the “complete preemption” doctrine should be applied to allow removal jurisdiction in this case, I respectfully dissent.

In concluding that the “complete preemption” corollary to the well-pleaded complaint rule should not be invoked when a defendant seeks to remove on the basis of the Medical Device Amendments to the Food, Drug and Cosmetics Act (“MDA“), 21 U.S.C. § 360, the majority relies on our en banc decision in

Warner v. Ford Motor Co., 46 F.3d 531 (6th Cir.1995). In Warner, we held that no removal jurisdiction exists under Section 514 of the Employee Retirement Income and Security Act of 1974 (“ERISA“), 29 U.S.C. § 1144, because “§ 1144 preemption does not create a federal cause of action itself, and cannot convert a state cause of action into a federal cause of action under the well-pleaded complaint rule.”

Id. at 534. The majority analogizes to this reasoning of Warner to conclude that, because § 360k(a) of the MDA also does not create a parallel federal cause of action, § 360k(a) preemption cannot convert a state cause of action into a federal question under the well-pleaded complaint rule.

In my view, the majority errs in suggesting that mere preemption, absent the simultaneous creation of a federal cause of action, means that removal jurisdiction is never possible. See

Caterpillar Inc. v. Williams, 482 U.S. 386, 391 n. 4, 107 S.Ct. 2425, 2429, n. 4, 96 L.Ed.2d 318 (1987) (expressly disagreeing with lower court‘s reasoning that actions may not be removed to federal court on grounds of complete preemption unless federal law both displaces and supplements state law with a federal cause of action). Rather, the operative inquiry in determining whether the complete preemption doctrine authorizes removal is “the intent of Congress,” which may be either express or implied from the statutory text.

Malone v. White Motor Corp., 435 U.S. 497, 504, 98 S.Ct. 1185, 1189-90, 55 L.Ed.2d 443 (1978);

Stamps v. Collagen Corp., 984 F.2d 1416, 1420 (5th Cir.), cert. denied,

510 U.S. 824, 114 S.Ct. 86, 126 L.Ed.2d 54 (1993).

In my view, Congress made explicit in § 360k(a) and related provisions its comprehensive preemptive intent, for the reasons expressed by the district court in

Richardson v. Advanced Cardiovascular Sys., Inc., 865 F.Supp. 1210 (E.D.La.1994). I would therefore affirm the district court‘s denial of the motion to remand, and also its dismissal of plaintiff‘s claims on the basis of complete preemption for the reasons expressed in its opinion dated September 22, 1994.

Notes

1

Courts of appeals differ in their willingness to extend the scope of the complete preemption doctrine. Compare

Rosciszewski v. Arete Assocs., 1 F.3d 225 (4th Cir.1993) (holding complete preemption applies to § 301 of the Copyright Act) and

M. Nahas & Co. v. First Nat‘l Bank, 930 F.2d 608 (8th Cir.1991) (holding complete preemption applies to § 86 of the National Bank Act) and

Trans World Airlines v. Mattox, 897 F.2d 773 (5th Cir.) (holding complete preemption applies to § 105(a)(1) of the Airline Deregulation Act), cert. denied,

498 U.S. 926, 111 S.Ct. 307, 112 L.Ed.2d 261 (1990) with

Spellman v. Meridian Bank, 1995 WL 764548 (3rd Cir. Dec. 29, 1995) (refusing to extend complete preemption to § 85 and § 86 of the National Bank Act, or to § 521 of the Depository Institutions Deregulation and Monetary Control Act) and

Hurt v. Dow Chem. Co., 963 F.2d 1142 (8th Cir.1992) (refusing to extend complete preemption to the Federal Insecticide, Fungicide, and Rodenticide Act) and

Robinson v. Michigan Consol. Gas Co., 918 F.2d 579 (6th Cir.1990) (refusing to extend complete preemption to suits against trustees in bankruptcy) and

Aaron v. National Union Fire Ins. Co., 876 F.2d 1157 (5th Cir.1989) (refusing to extend complete preemption to § 5 of the Longshore and Harbor Workers’ Compensation Act), cert. denied,

493 U.S. 1074, 110 S.Ct. 1121, 107 L.Ed.2d 1028 (1990). The specific question of whether complete preemption applies to § 360k(a) of the MDA is one of first impression in the courts of appeals. District courts are divided on the issue. Compare

Richardson v. Advanced Cardiovascular Sys., Inc., 865 F.Supp. 1210 (E.D.La.1994) (holding complete preemption applies) with

Goldstein v. W.L. Gore & Assocs., Inc., 887 F.Supp. 168 (N.D.Ill. 1995) (refusing to extend complete preemption).

2

The defense to plaintiff‘s claim was based on the fact that plaintiff had taken early retirement in lieu of discharge, was receiving benefits under an agreement governed by federal ERISA law, and had signed a release of claims form in exchange for the retirement benefits.

Warner, 46 F.3d at 533.

3

This section states, in relevant part: [N]o State or political subdivision of a State may establish or continue in effect with respect to a device intended for human use any requirement— (1) which is different from, or in addition to, any requirement applicable under this chapter to the device, and (2) which relates to the safety or effectiveness of the device or to any other matter included in a requirement applicable to the device under this chapter. 21 U.S.C. § 360k(a).

*

Judge Suhrheinrich would grant rehearing for the reasons stated in his dissent.

**

The Honorable Horace W. Gilmore, United States District Judge for the Eastern District of Michigan, sitting by designation.

Case Details

Case Name: Brett Strong Lauri Strong v. Telectronics Pacing Systems, Inc. Thomas S. Martin

Court Name: Court of Appeals for the Sixth Circuit

Date Published: Apr 18, 1996

Citation: 78 F.3d 256

Docket Number: 94-2213

Court Abbreviation: 6th Cir.