Recent Alabama Rulings on Removal

In Freeman’s 66 v. Scottsdale Ins. Co., 2012 WL 1747973 (N.D. Ala. May 15, 2012)(Coogler), after Freeman’s 66’s gasoline station sustained some structural damages in a vehicle accident, its insurer failed to pay a claim.  Freeman’s 66 sued Scottsdale for breach of contract and bad faith, and sought $12,400 to replace a metal awning, $12,600 for replacing three gas pumps and unspecified punitive damages.  After the removal, Freeman’s 66 moved for remand contending a failure to satisfy the amount-in-controversy requirement.  Obviously, Freeman’s 66 specifically demanded just $25,000 in compensatory damages.  Referencing three earlier opinions, Scottsdale unsuccessfully argued that the request for punitive damages was for at least $50,000.  Correctly, Coogler differentiated the three opinions and noted that the range of possible punitive-damages awards was far less than $50,000 to some figure in excess of $50,000.

In Lambeth v. Peterbilt Motors Co., 2012 WL 1712692 (N.D. Ala. May 15, 2012)(Steele), as he was attempting to enter the cab of his Peterbilt truck, a step collapsed, causing Lambeth to fall to the ground and hurt his back.  He brought a products-liability lawsuit in which he alleged that he suffered a “serious injury to his back” and included the typical “boilerplate” language in his complaint. 

In removing the matter, the defendants relied solely on the complaint and, more particularly, on the allegation of a “serious injury” and asked the federal court to find that Lambeth must be seeking more than $75,000.  Judge Steele found that using the word “serious” does not make it “facially apparent” from the complaint that Lambeth was seeking more than $75,000 – “While the back injury is characterized as ‘serious,’ nothing in the Complaint elaborates on the nature or severity of that injury, or otherwise lends substance or meaning to it.  We simply do not know – or have any basis for inferring from the pleadings – anything about how severe, permanent, debilitating or painful the injury might be; how extensive, costly, or traumatic the course of treatment was, is or might be; or whether and to what extent the injury did, does or will constrain Lambeth’s work or life activities.” 

Judge Steele essentially chastised the defendants for relying merely on the complaint and not proffering evidence as to the true nature of Lambeth’s injury, that is, he truly suffered a severe injury that resulted in high medical costs, a lot of pain, significant disability, etc., as opposed to Lambeth’s attorney merely overhyping the injury. 

When the defendants argued that Lambeth’s attorney was “playing a game” by not being more specific in the complaint, Judge Steele wrote:  “These sentiments are an oft-heard refrain voiced by members of the defense bar who feel aggrieved by the manner in which Eleventh Circuit amount-in-controversy jurisprudence has developed in recent years.  Their lament is understandable.  It is true enough that defendants who wish to remove an action to federal court on diversity grounds may face daunting proof obstacles and difficult strategic choices, particularly as to whether to remove the case right away or to develop additional evidence on damages via discovery before pulling the removal trigger.  Contrary to defendants’ insinuation, however, Lambeth neither created this state of affairs nor engaged in impropriety, trickery or skullduggery in proceeding as he has.  For better or worse, the harrowing Scylla-and-Charybdis scenario described by PACCAR is a natural, inevitable consequence of the interaction among liberal pleading rules that do not require a plaintiff to plead injuries and damages with specificity, strict removal statutes that place both the burden of proof and temporal constraints on removing defendants, and appellate evolution of a substantial, subjective gray area in which defense counsel cannot discern for sure whether the “facially apparent” criterion will be deemed to be satisfied in a particular case.  …  A perception of unfairness or hardship is not a valid reason to excuse removing defendants from their strict jurisdictional burden of proving by a preponderance of the evidence that the amount in controversy exceeds $75,000.”

The Freeman’s 66 opinion will be useful in situations where there was just property damage to a business and/or where the insurance claim was for significantly less than $75,000.

The Lambeth opinion is a good counter to those opinions where a federal judge uses the “facial apparent” approach and holds that alleging a “serious injury” equates to seeking more than $75,000.  Chief Judge Steele correctly notes that more should be required when the complaint is so general in his description of the injury and its consequences.

Alabama Ruling on Deceased Party

In Mitchell v. Thornley, No. 2101127 (Ala. Civ. App. June 1, 2012), a three-automobile accident occurred on September 27, 2005, involving Mitchell, Webb and Day.  On September 21, 2007, Mitchell sued Webb and Day.  When Mitchell attempted to have Webb served, the summons and complaint were returned with a notification that Webb was deceased; he died in May 2007.  On April 13, 2009, more than a year and a half after filing the complaint, Mitchell filed a motion to appoint an administrator ad litem for Webb’s estate “to serve as the personal representative” of Webb’s estate “for purposes of this lawsuit.”  On October 19, 2009, Thornley was appointed as the administrator ad litem of Webb’s estate.  Thornley moved for a summary judgment, asserting that the action as to Webb’s representative was time-barred.

Once Webb died, the proper party-defendant was not Webb but was Webb’s personal representative.  By operation of Sec. 6-2-14 and because no letters testamentary or administration were ever granted after Webb’s death, as to Webb’s representative, the statute of limitations was tolled for six months, giving Mitchell until March 27, 2008, to commence a lawsuit against Webb’s representative.  Yet, nothing was done until April 13, 2009, too late.  The Court of Civil Appeals held that Alabama’s fictitious-practice rule did not apply in this factual situation.  The administrator ad litem, the proper party-defendant, was not sued within the extended limitations period; thus, there was time bar.

Lesson:  Once Mitchell learned that Webb had died, Mitchell should have immediately determined whether an estate had been opened and, if so, quickly moved to add or substitute the appointed personal representative as a party-defendant and , if not, quickly sought the appointment of an administrator ad litem.  Mitchell could not do nothing for a long time, here a year and a half.

The opinion did declare that, when an administrator ad litem is appointed for a deceased defendant, the administrator is “automatically” substituted for the deceased defendant and there is no need to amend the complaint to substitute the administrator for the deceased named defendant.   

Smith & Nephew Voluntary Withdrawal of Metal Hip Liner

Smith & Nephew PLC said Friday that it is pulling a metal liner used in hip replacements from the market. The London company said the device is the optional metal liner for its R3 Acetabular System hip devices. Smith & Nephew said it is "not satisfied with the clinical results" of the liner because some patients needed an additional surgery to have the liner removed. It described the move as a precaution.

The U.K.-based device and medical technology company disclosed what it termed as a "voluntary market withdrawal" of an "optional metal liner component" for its R3 Acetabular system, which serves as the "socket" portion of a hip implant. The withdrawal encompasses the optional metal liner, or cup, component. Surgeons, however, will still be able to use the system using alternative non-metal liners and the company said it did not anticipate any delays to surgery.

A small number of patients experienced problems including infections, fractures and dislocations - but there was no evidence of "metallosis", or the build-up of metallic debris in the body, a corporate spokesman said. The veracity of this statement is yet to be determined.

Smith & Nephew said about 7,700 metal liners have been implanted since the piece first became available in 2007, mostly for stemmed total hip replacements. The component launched globally in 2009. Patients who have the liner as part of their implant are being urged to talk to their surgeons if they are dealing with any unusual symptoms.

A Smith & Nephew spokesman said that U.S. and European regulators have been notified of the company's voluntary action, which was based on clinical data from multiple sources. Among them: The U.K. National Joint Registry shows a revision rate of 6.3% after four years for the part, and the Australian National Joint Replacement Registry shows a revision rate of 4.96% after two years.

The company cautioned in its statement that other R3 system liners, made of polyethylene (and ceramic outside the U.S.) aren't affected by the market withdrawal. Smith & Nephew also downplayed the impact it would face taking the component off the market, noting that the company reported $4.27 billion in revenue in 2011 and claims less than 1 percent of that revenue came from procedures involving the recalled component.

The R3 system itself has been an issue for the company in the past. In December of 2010, the FDA issued Smith & Nephew a warning letter regarding the company's Tuttlingen, Germany facility that produces the implant. The FDA said that the company had not performed adequate tests and that it failed to establish and maintain a process that would correct manufacturing problems. At the time, Smith & Nephew said it took initial action to resolve any FDA issues. (Other sites in the U.K. and U.S. also manufacture the device.)

The voluntary recall will only add to concerns about the safety of metal-on-metal hips. Metal-on-metal hips were developed to be more durable than traditional implants, which combine a ceramic or metal ball with a plastic socket. Smith & Nephew, through a company spokesman said the issues with its system were different to those seen with some other all-metal implants, such as the high-profile recall of the DePuy metal-on-metal ASR system.

If you or a loved one have had hip replacement surgery and have been implanted with a defective Smith & Nephew R3 Acetabular system, you may be entitled to compensation for medical bills, pain and suffering, lost wages and other injuries. Our firm is currently investigating claims for those people who have been implanted with the Smith & Nephew R3 metal liner. If you would like a free case evaluation, please contact Booth Samuels toll free at 1-866-515-8880 or at booths@pittmandutton.com.