United States District Court, D. Minnesota
E. RAU UNITED STATES MAGISTRATE JUDGE.
above-captioned cases (the “Mentor cases”) come
before the undersigned pursuant to the Administrative Order
[Doc. No. 9] directing the undersigned to coordinate pretrial
matters and pursuant to 28 U.S.C. § 636(b)(1)(A) and
District of Minnesota Local Rule 72.1. Pursuant to the
Administrative Order and subsequent agreement by the parties
and the Court-as explained in further detail below-Plaintiffs
filed a Motion for Leave to File an Amended Complaint to Add
a Claim for Punitive Damages [Doc. No. 29]. The parties chose
two cases in which Plaintiffs' motion would be heard with
the understanding that the order ruling on the motion would
be issued in all Mentor cases. For the reasons stated below, the
Court denies the motion in Jackson and grants the
motion in Urbieta.
are women who were implanted with ObTape, the brand name of a
transobturator vaginal sling device that was “designed,
manufactured, packaged, labeled and sold by
Mentor” to treat Plaintiffs for stress urinary
incontinence. See, e.g., (Compl.) [Doc. No. 1-1
¶¶ 1, 16]. Plaintiffs allege that they
“suffered serious and permanent bodily injuries,
including erosion of the ObTape medical device through
[their] internal bodily tissues, chronic infections, pain,
exacerbation of . . . urinary incontinence, and the need for
multiple additional surgical procedures and medical treatment
as well as the need for extensive future medical care.”
(Id. ¶ 19). Mentor marketed ObTape and
introduced it to the United States market in 2003.
(Id. ¶¶ 7- 8). Plaintiffs allege that
Mentor conducted only limited, inadequate testing prior to
introducing ObTape to the U.S. market, and that it
“knowingly and deliberately made material
misrepresentations to the Food & Drug Administration
[‘FDA'] concerning the safety, efficacy, design,
and manufacture of ObTape.” (Id. ¶¶
8-10). Plaintiffs allege that Mentor did not perform any
“safety or efficacy testing in human vaginal tissues to
confirm that the medical device was safe and effective for
use in women” and “continued to manufacture,
market, distribute, and sell [ObTape] to thousands of women .
. .” until 2006. (Id. ¶¶ 11-14).
Plaintiffs allege claims of strict liability, negligence,
breach of express warranty, breach of implied warranty,
common law fraud, constructive fraud, and negligent and
intentional misrepresentation against Mentor. (Id.
filed their cases in Minnesota state courts, and Mentor
removed them to federal court. (Notice of Removal) [Doc. No.
1]. The cases were then transferred to the United States
District Court for the Middle District of Georgia for
pretrial proceedings in 2013, and were remanded to this
District in 2017. (Conditional Transfer Order) [Doc. No. 3];
(Conditional Remand Order) [Doc. No. 4]. The Honorable John
R. Tunheim, Chief District Judge, ordered that the
undersigned coordinate all Mentor cases for settlement
conferences and a pretrial scheduling order. (Admin. Order).
The undersigned a held a settlement conference in all Mentor
cases on December 4-6, 2017, during which six cases settled.
(Minute Entries) [Doc. Nos. 15- 17]. The undersigned entered
a Pretrial Scheduling Order in the remaining cases,
instructing Plaintiffs and Mentor to each select one case in
which Plaintiffs would seek Court approval to amend the
complaint to add a claim for punitive damages. [Doc. No. 26
at 4]. The parties chose Jackson v. Mentor Corp.,
No. 13-cv-768 (SRN/KMM) (D. Minn.), and Urbieta v. Mentor
Corp., No. 13-cv-1927 (ADM/LIB) (D. Minn.), as so-called
“bellwether” punitive damages cases, with the
understanding that any order issued by the undersigned would
be issued in all Mentor cases. See (Order Dated Jan.
29, 2018) [Doc. No. 73].
Court held oral argument and sua sponte raised the
issue of the appropriate standard for adding punitive damages
claims. See (Order Dated Mar. 16, 2018) [Doc. No.
104]. Specifically-and as described more fully below-a split
among United States Magistrate Judges in this District
regarding whether a court should follow Minnesota Statute
section 549.191 or Rule 15 of the Federal Rules of Civil
Procedure when considering this type of motion
developed recently. See (id.); In re
Bair Hugger Forced Air Warming Devices Prods. Liab.
Litig., No. 15-md-2666 (JNE/FLN), 2017 WL 5187832 (D.
Minn. July 27, 2017) (Noel, Mag. J.) (determining Rule 15
governs); Order Dated Mar. 8, 2018, Inline
Packaging, LLC v. Graphic Packaging Int'l, LLC, No.
15-cv-3183 (ADM/LIB) (D. Minn.) [Doc. No. 534] (Brisbois,
Mag. J.) [hereinafter Inline Packaging Order]
(determining the punitive damages pleading statute
governs). The parties submitted supplemental
briefing addressing the issue, and the matter is now ripe for
adjudication. See (Order Dated Mar. 16,
2018); (Mentor's Suppl. Opp'n to Pls.' Mot.,
“Mentor's Suppl. Mem.”) [Doc. No. 111];
(Pls.' Suppl. Mem. in Supp. of Pls.' Mot.,
“Pls.' Suppl. Mem.”) [Doc. No. 113].
this Court must determine the appropriate standard to apply.
Minnesota law prohibits seeking punitive damages in an
initial complaint. Minn. Stat. § 549.191. Instead, a
party may amend its pleading to claim punitive damages if it
shows prima facie evidence of the factual basis for the
claim. Id. In contrast, Rule 15 of the Federal Rules
of Civil Procedure states that a party may amend its
pleadings-regardless of the purpose of the amendment-if
“justice so requires.” Unsurprisingly, Plaintiffs
argue Rule 15 applies; in contrast, Mentor argues the
punitive damages pleading statute applies. (Pls.' Suppl.
Mem.); (Mentor's Suppl. Mem.). For the reasons described
below, the Court concludes Rule 15 applies.
District has a long and consistent history of evaluating
amendments to add claims of punitive damages under the
punitive damages pleading statute in diversity cases where
state law governs the rule of decision. See Bair
Hugger, 2017 WL 5187832, at *1 n.1 (citing cases). In
1990, the Honorable Bernard P. Becker, United States
Magistrate Judge, concluded that Rule 15 and the punitive
damages pleading statute do not directly conflict. See
Sec. Sav. Bank v. Green Tree Acceptance, Inc., No.
3-89-28, 1990 WL 36142, at *2 (D. Minn. Mar. 22, 1990).
Specifically, he stated that Rule 15 addresses whether a
party may amend its pleadings generally, while the punitive
damages pleading statute addresses “whether or not a
party should be permitted to assert a claim for punitive
damages.” Id. Judge Becker stated that Rule 15
“does not even attempt to address the issue
posed” in the statute. Id. Thus, Judge Becker
held that the punitive damages pleading statute must be
applied. Id. at *3. Since then, courts
in this District-including the undersigned-continued to apply
the punitive damages pleading statute when considering
whether a party may amend its pleading to claim punitive
damages. See, e.g., In re Levaquin Prods. Liab.
Litig., No. 08-cv-5743 (JRT), 2010 WL 7852346, at *5-6
(D. Minn. Nov. 9, 2010) (Tunheim, J.); Healey v. I-Flow,
LLC, 853 F.Supp.2d 868, 872 (D. Minn. 2012) (Keyes, Mag.
J.); Streambend Props. III, LLC v. Sexton Lofts,
LLC, 297 F.R.D. 349, 360-61 (D. Minn. 2014) (Rau, Mag.
J., as adopted by Davis, C.J.). But in 2010, the United
States Supreme Court issued its decision in Shady Grove
Orthopedic Assocs., P.A. v. Allstate Insurance Co., 559
U.S. 393 (2010), which in turn caused the Honorable Franklin
L. Noel, United States Magistrate Judge, to re-evaluate the
District's position. See generally Bair Hugger,
2017 WL 5187832. Judge Noel found that Rule 15 applies.
Id. at *4. Eight months later, the Honorable Leo I.
Brisbois, United States Magistrate Judge also examined this
issue and came to the opposite conclusion-that the punitive
damages pleading statute applies. Inline Packaging
Order at 10.
Shady Grove and Bair Hugger
Shady Grove, the Supreme Court considered whether a
New York state statute precluded the use of Rule 23 of the
Federal Rules of Civil Procedure to maintain a class action.
559 U.S. at 396. The Court clarified some of its past
holdings regarding the analysis required when a state
law-which typically applies in a diversity action-conflicts
with the Federal Rules of Civil Procedure. See 559
U.S. at 398. Five justices stated that a court
considering this issue “must first determine whether
[the Federal Rule] answers the question in dispute.”
Id. Finding that Rule 23 answers the question of
“whether Shady Grove's suit may proceed as a class
action, ” the Court next considered whether Rule 23 was
valid under the Rules Enabling Act. Id. at 399, 406.
Both the plurality and the concurrence found Rule 23 was
authorized under the Rules Enabling Act, 28 U.S.C. §
2072(b), but they applied different analyses. Compare
Id. at 407 (plurality opinion) (analyzing whether the
Rule is procedural-and therefore valid-in the sense that
“it governs only the manner and means by which the
litigants' rights are enforced” (internal quotation
marks omitted)), with Id. at 431 (Stevens, J.,
concurring in part and concurring in the judgment) (analyzing
whether application of Rule 23 “would abridge, enlarge,
or modify New York's rights or remedies, and thereby
violate the Enabling Act”); see also 28 U.S.C.
§ 2072(b) (stating that the Federal Rules “shall
not abridge, enlarge or modify any substantive right”).
Bair Hugger, Judge Noel observed that prior
decisions considering amendments to add punitive damages
claims did not consider Shady Grove. 2017 WL
5187832, at *1. Judge Noel then evaluated whether Rule 15 or
the punitive damages pleading statute should apply to
plaintiffs' motion to amend. See Id. at *2-4.
Judge Noel found that Rule 15 and the statute conflict
because Rule 15 “answers the question in
dispute.” Id. at *4 (internal quotation marks
omitted); see also Shady Grove, 559 U.S. at 398
(Scalia, J.). Specifically, Judge Noel perceived a conflict
because the punitive damages pleading statute required
“prima facie evidence of deliberate disregard for the
rights and safety of others, ” whereas Rule 15 had no
such requirement. Id. Judge Noel then determined
that Rule 15 was valid under the Rules Enabling Act under
both the plurality's test and the concurrence's test.
Id. at *4. Specifically, Judge Noel found that
“the procedural pleading statute for punitive damages
is . . . not a ‘judgment about the scope of
state-created rights and remedies, ' 559 U.S. at 432
(Stevens, J., concurring), but a judgment about how Minnesota
courts should operate.” Id. Thus, Judge Noel
concluded that Rule 15 governed the plaintiffs' motion to
amend their pleadings. Id.
Inline Packaging, Judge Brisbois found that there
was no conflict between Rule 15 and the punitive damages
pleading statute. Id. at 8. More specifically, Judge
Brisbois concluded that the “state statute . . . does
not preclude the application of the Federal Rule[, ]”
and “at least one Minnesota United States District
Court has already concluded that ‘[t]here is no direct
conflict between Federal Rule 15(a) and section
549.191.'” Id. (alteration in original)
(quoting Sec. Sav. Bank, 1990 WL 36142, at *2).
Because a federal court has discretion to allow the amendment
under Rule 15, Judge Brisbois reasoned, that discretion
“does not preclude or even conflict with the
consideration of whether a party has also complied
with” the punitive damages pleading statute.
described above, Judge Noel's and Judge Brisbois's
opinions created a split in this District in the last eight
months regarding whether the punitive damages pleading
statute or Rule 15 governs an amendment to add a punitive
damages claim. See, e.g., Ramirez v. AMPS
Staffing, Inc., No. 17-cv-5107 (DWF/BRT), 2018
WL 1990031, at *6 (D. Minn. Apr. 27, 2018) (Thorson, Mag. J.)
(acknowledging the split in the District but determining that
“the outcome of the motion would be same regardless of
which standard is applied”). Judge Brisbois's order
was issued after Plaintiffs filed their motion, but before
oral argument; the Court then raised this issue and requested
the undersigned considered a similar issue with respect to
Minnesota Statute section 604.18-which governs amendments to
add bad faith insurance claims-and determined that Rule 15
governed the amendment to the pleadings. See Selective
Ins. Co. of S. Carolina v. Sela, No. 16-cv-4077
(PJS/SER), 2018 WL 1960450 (D. Minn. Apr. 26,
2018). For reasons similar to the reasoning
articulated in Selective, the Court concludes Rule
15 governs amendments to add punitive damages claims.
Rule 15 and Related Federal Rules
the opinion of five justices in Shady Grove and the
Supreme Court's predecessor cases, the first question is
whether Rule 15 “answers the question in
dispute.” See 559 U.S. at 398 (citing
Burlington N. R.R. Co. v. Woods, 480 U.S. 1, 4-5
(1987)). Here, the question is whether Plaintiffs may amend
their complaints to add a punitive damages claim. Rule 15
applies to amended pleadings, regardless of the nature of the
amendment, and answers this question by allowing an amendment
“when justice so requires.”
the punitive damages pleading statute and Rule 15 purport to
govern the requirements a party that seeks to amend its
pleading to add a punitive damages claim must meet. But the
standard each requires is different. Section 549.191 requires
“affidavits showing the factual basis for the
claim.” If the court “finds prima facie evidence
in support of the motion, ” the motion
“shall” be granted. § 549.191. Thus, the
punitive damages pleading statute requires that the moving
party submit prima facie evidence to the court.
has no such evidentiary standard. Its liberal standard for
granting the motion- when justice so requires-demonstrates
“that amendments should be allowed, unless certain
limited exceptions are present” and is not limited to
the type of amendment the moving party seeks. See
Selective, 2018 WL 1960450, at *5; see also Foman v.
Davis, 371 U.S. 178, 182 (1962) (stating that an amended
pleading should be allowed unless there is a reason such as
“undue delay, bad faith or dilatory motive on the part
of the movant, repeated failure to cure deficiencies by
amendments previously allowed, undue prejudice to the
opposing party by virtue of allowance of the amendment,
futility of amendment, etc.”). As noted in
Selective, Rule 15 is better understood in the
context of Rules 8, 9, and 12. 2018 WL 1960450, at *4;
see also Karnatcheva v. JPMorgan Chase Bank, N.A.,
704 F.3d 545, 548 (8th Cir. 2013) (“We apply federal
pleading standards-Rules 8 and 12(b)(6)-to state the
substantive law to determine if a complaint makes out a claim
under state law.”).
Rule 8, “a short and plain statement of the claim
showing that the pleader is entitled to relief” is
required “to give the defendant fair notice of what the
claim is and the grounds upon which is rests.” Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (cleaned
up). This “liberal notice pleading” requirement
is restricted in two ways. See Swierkiewicz v. Sorema
N.A., 534 U.S. 506, 514 (2002) (“The liberal
notice pleading of Rule 8(a) is the starting point of a
simplified pleading system, which was adopted to focus
litigation on the merits of a claim.”).
Rule 9 requires that certain matters be pleaded with more
specificity. The most common example is its requirement that
a party “alleging fraud or mistake . . . state with
particularity the circumstances constituting fraud or
mistake.” Fed.R.Civ.P. 9(b). Rather than alter notice
pleading, however, Rule 9(b) “simply necessitates a
higher degree of notice” and a court “must
interpret the requirements of Rule 9(b) in harmony with the
principles of notice pleading.” Abels v. Farmers
Commodities Corp., 259 F.3d 910, 920 (8th Cir. 2001)
(internal quotation marks omitted).
the Supreme Court has provided guidance regarding what is
required in a pleading through its analysis of motions to
dismiss for failure to state a claim under Rule 12(b)(6) in
two seminal decisions: Twombly, cited above, and
Ashcroft v. Iqbal, 556 U.S. 662 (2009).
[T]hese cases stand for the general proposition that Rule 8
“does not require ‘detailed factual allegations,
'” but claims “must [nevertheless] contain
sufficient factual matter, accepted as true, to ‘state
a claim to relief that is plausible on its face.'”
Iqbal, 556 U.S. at 678 (quoting Twombly,
550 U.S. at 555, 570). That is, “[a] pleading that
offers labels and conclusions or a formulaic recitation of
the elements of a cause of action will not do. Nor does a
complaint suffice if it tenders naked assertion[s] devoid of
further factual enhancement.” Id. (internal
quotation marks omitted) (citations omitted) (second
alteration in original).
Selective, 2018 WL 1960450, at *5.
pleading standards described in Iqbal and
Twombly apply to an amended pleading considered
under Rule 15. An amended pleading should be permitted when
justice so requires, which excludes an amended pleading that
is futile. See Foman, 371 U.S. at 182. Futility, in
turn, is measured by determining whether the amended pleading
could “withstand a motion to dismiss under Rule
12(b)(6) of the Federal Rules of Civil Procedure.”
Zutz v. Nelson, 601 F.3d 842, 850 (8th Cir. 2010)
(internal quotation marks omitted). “[A]nalysis under
Rules 15 and 12(b)(6) generally requires a court not consider
matters outside the pleadings to determine whether leave to
amend should be given.” Selective, 2018 WL
1960450, at *6.
contrast, the punitive damages pleading statute requires a
court to perform what is often referred to as a gatekeeping
function by examining submissions outside the pleadings to
determine whether the submissions amount to prima facie
evidence of punitive damages. See generally Sorin Grp.
USA, Inc. v. St. Jude Med., S.C., Inc., No. 14-cv-4023
(RHK/JJK), 2015 WL 12803583 (D. Minn. Sept. 28, 2015) (Keyes,
Mag. J.). This requirement “presents a stark contrast
to the usual analysis where a federal court need only
consider whether the pleading ‘contain[s] sufficient
factual matter, accepted as true, to state a claim to relief
that is plausible on its face.'”
Selective, 2018 WL 1960450, at *7 (alteration in
original) (quoting Iqbal, 556 U.S. at 678).
the Court concludes that Rule 15 answers the question of
whether Plaintiffs may amend their complaints. See Shady
Grove, 559 U.S. at 398 (stating that if a Federal Rule
answers the question in dispute, it governs unless the Rule
is invalid); Bair Hugger, 2017 WL 5187832, at *4
(concluding Rule 15 governs whether a plaintiff may amend a
complaint to add a punitive damages claim).
Validity of ...