Missouri Supreme Court case highlights the need for venue and joinder reform

justin arnold bylineOn Sept. 12 the Missouri Supreme Court, in a decision written by Judge Brent Powell, ruled against Abbott Laboratories and upheld nearly $40 million in damages to a Minnesota plaintiff in a case tried in the City of St. Louis.

Very brief background: The case, involving Minnesota plaintiff Maddison Schmidt, alleged product liability injuries from the drug Depakote, manufactured and marketed by Abbott Laboratories. All of the plaintiff’s claims occurred in Minnesota. Schmidt filed the case in St. Louis along with (among other out-of-state plaintiffs) four St. Louis City plaintiffs who claimed similar injuries from Depakote. One important note: Personal jurisdiction was waived by Abbott Laboratories, and therefore the recent Bristol-Myers Squibb decision by the U.S. Supreme Court was not discussed and was not applicable.

The Missouri Supreme Court upheld a verdict of $15 million in compensatory damages and $23 million in punitive damages (the punitive damages and failure-to-warn claims were decided under Minnesota law).

The decision: While the case has some nuances, the big takeaway is that it turns on the current state of venue/joinder in the State of Missouri. The Minnesota plaintiff was joined with St. Louis residents in order to satisfy the current venue requirements set forth in section 508.010 of the Missouri Revised Statutes. Had the case with the Minnesota plaintiff been filed by itself in St. Louis City, venue would not have been proper, as Abbott Labs has its registered agent in St. Louis County. Under the current venue/joinder regime in the state of Missouri, an out-of-state plaintiff need not independently show venue is proper as for each individual plaintiff. The plaintiffs established venue by joining the Minnesota plaintiff with plaintiffs alleging injuries that occurred in St. Louis City. Under Supreme Court Rule 84.13(b), failing to transfer venue or sever claims requires a showing of prejudice that materially affects the outcome of the action. While the case was separated for trial and tried separately from the St. Louis City claims, the Supreme Court found that leaving the case in St. Louis City did not rise to that level of prejudice required under 84.13.

Here is why it matters: First, the finding is troubling and highlights the almost-insurmountable burden a business faces in trying to overcome the requirement to show it was prejudiced by the failure to transfer or sever the claims. Second, if the current venue and joinder statutes are not fixed in the 2018 legislative session, awards such as the one in this case could continue. While the recent personal jurisdiction jurisprudence will further limit cases brought and adjudicated in St. Louis City, the venue and joinder statutes still leave a wide-open hole for trial attorneys to funnel out-of-state cases into the City of St. Louis. One solution is to amend sections 507.040 and 507.050 of the Missouri Revised Statutes to require that each individual plaintiff joined in a single action show that personal jurisdiction is proper for each defendant and that proper venue is established for each defendant independent of claims against any other defendant. In addition, the venue statute in 508.010 must be amended to include language that the venue for each plaintiff and each defendant cannot be established simply by joinder or intervention. Similar legislation was proposed in the 2017 legislation session, and misjoinder/venue legislation is expected to be filed in the 2018 session. Venue and joinder reform would fix this problem and should be a top priority.

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