Disclaiming Physician Patient Relationship Leads to Fraudulent Joinder in Texas

The plaintiffs’ bar rallies around the cry that they are the only ones fighting for justice. Evil insurance companies further victimize already injured parties, blah, blah, blah. It’s unfortunate that so many plaintiffs’ lawyers seem unwilling or incapable of acknowledging that their lawsuits are involuntary transactions and legal strategies are, for the most part, economic choices.

Take for example, McCall v. Genentech, No. 3:10-CV-1747-B, 2011 WL 111440 (N.D. Tex. Jan. 12, 2011). In that suit, the Plaintiff claimed she was injured by the prescription drug Raptiva. In attempting to treat her psoriasis, she purportedly took the drug and then spent 25 days in a hospital and experienced continuing injuries. She filed a lawsuit in Texas state court naming Genentech (not Initech) and XOMA, who aided in the manufacture of Raptiva, as well as her physician, who prescribed the drug (who happened to be a clinical researcher of Raptiva), and two entities for which her physician worked. The latter three defendants were non-manufacturing defendants who just happened to be nondiverse from the Plaintiff. Accordingly, the defendants removed the suit to federal court, alleging improper joinder, and the Plaintiff predictably responded with her own motion to remand the case back to state court.

Perhaps the suit was originally filed in state court, rather than federal, because there is no mandatory scheduling order, no early disclosure of experts (meaning less upfront costs in expert reports), and all those things that can make litigation expensive. However, the Plaintiff has a problem because Texas has a limitation on damages as well as some mandatory expert disclosures in medical malpractice actions that make litigating in state court a lot like litigating in federal court. Since the plaintiff’s attorney’s job is (apparently) to maximize the return on an investment, the Plaintiff’s lawyer decided to disclaim any causes of action based on the physician-patient relationship in the original state court petition. Thus, the Plaintiff could still hope to squeeze some settlement value out of the case without costly expert discovery.

The strategy failed. By disclaiming the physician-patient relationship, the Plaintiff had no relationship on which to base a cause of action against the non-manufacturing defendants because a clinical researcher owes no duty to the public. Without viable causes of action against those defendants, the Plaintiff lost on the motion to remand and remained in federal court.

We’re glad that the federal rules monetize “justice” in the way that they do. Plaintiffs and their lawyers should bear some meaningful cost of the litigation up front as a means of speeding the litigation towards its end. There’s nothing wrong with trying to level the playing field as far as fees and costs go, as there should be economic pressures on both sides to resolve cases. Shouldn’t all sides be able to say that the Plaintiff’s case should be resolved quickly so that she can move forward with her life? Too many times, cases languish because there is no pressure to move the case forward. Whatever the case, it’s always nice for defense counsel to prevail because an opponent cannot or did not properly strategize.

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