Talc Case Remanded To State Court When Fraudulent Joinder Theory Fails

NEW YORK – The plaintiff, Marilyn LaFlair, sued Port Jervis, New York resident Kolmar Laboratories, Inc. (Kolmar) and Johnson & Johnson (J&J) in state court in St. Lawrence County, New York. She alleged that asbestos-contaminated cosmetic talcum powder products manufactured and supplied by these defendants caused her mesothelioma. J&J removed the action to federal court and argued that non-diverse defendant Kolmar was fraudulently joined to the action. J&J contended that the “boilerplate allegations” of the plaintiff’s pleadings at most only suggested that Kolmar manufactured, sampled and tested J&J talc products according to the specifications of J&J, and that New York’s contract-specifications defense should apply. That doctrine holds that a manufacturer cannot be held liable for an injury caused by an alleged design defect in its product when it is “manufactured in accordance with the plans and specifications provided by the purchaser.” J&J argued that Kolmar was at best an upstream contract manufacturer of its talc products and was thus immune from liability under New York state law.  In response, the plaintiff argued that J&J had only delineated an affirmative defense for Kolmar, and had not foreclosed any possibility that the plaintiff could recover against them.

The court noted that the contract-specification defense was not available where specifications for a product were so defective that a manufacturer of ordinary prudence would be placed on notice that the product was dangerous, a determination that implicated unresolved questions of fact at this stage in the litigation. The court acknowledged that the general allegations of the plaintiff’s pleadings regarding Kolmar were arguably insufficient under federal pleading standards, but the court’s inquiry for purposes of the motion to remand was focused on whether there was a possibility of success against Kolmar in New York state court. The court remanded the case to state court and concluded that J&J had not met its burden of showing that the contract-specification defense would have foreclosed the plaintiff’s claims against Kolmar in New York state court and that Kolmar’s citizenship in New York could not be ignored for purposes of diversity jurisdiction.

Read the case decision here.