'Absurd' loophole can't keep Abbott formula lawsuits in federal court -judge

(Reuters) - Abbott Laboratories Inc cannot use a controversial legal loophole known as "snap removal" to keep lawsuits claiming that its Similac baby formula caused a deadly illness in premature infants in federal, rather than state, court, a federal judge has ruled.

The tactic takes advantage of language in federal law stating that a lawsuit cannot be removed from state to federal court if any "properly joined and served" defendant resides in the state. In a snap removal, a defendant removes a case as soon as it is filed on the state court docket, before the plaintiff has a chance to serve it.

Large companies often prefer to litigate in federal courts, which are perceived as less plaintiff-friendly than state courts.

Though the 2nd, 3rd and 5th U.S. Circuit Courts of Appeals have blessed snap removal, Chief Judge Rebecca Pallmeyer of the Northern District of Illinois on Wednesday rejected it as "absurd," sending four lawsuits back to Illinois state court where they were filed.

Pallmeyer is presiding over multidistrict litigation, including dozens of lawsuits claiming that Similac caused premature infants to become sick or die from a condition called necrotizing enterocolitis, in which intestinal tissue dies. Illinois-based Abbott denies the allegations and says that its products increase the babies' chance of survival.

Lawyers for Abbott and the plaintiffs did not immediately respond to requests for comment.

The federal MDL, created in April, included 89 lawsuits as of June 15. Abbott is also facing similar lawsuits in state court.

The company removed four of those lawsuits, all filed in the Circuit Court of Cook County, Illinois, to federal court shortly after they were filed, before being served. The plaintiffs all moved to remand their cases, arguing that snap removal frustrated the intent of the statute.

Pallmeyer agreed. She wrote that the "properly joined and served" language was intended to stop gamesmanship by plaintiffs, who might otherwise name a defendant in a lawsuit with no intention of serving it in order to bring it in a particular state court.

She also said the result of allowing snap removal was "absurd," particularly in Cook County, where service must be effected by the county sheriff.

"Abbott's interpretation...would create a race between the Cook County Sheriff and forum-state defendants, totally divorced from plaintiffs' intent to properly serve and join those defendants," she wrote.

"A few hours or even a few minutes' difference in timing of service - a matter wholly outside plaintiffs' control - cannot be a basis for federal court action," the judge added.

The case is In re Abbott Laboratories Inc et al Preterm Infant Nutrition Products Liability Litigation, U.S. District Court, Northern District of Illinois, No. 1:22-cv-00071.

For plaintiffs: Gerard Stranch of Branstetter, Stranch & Jennings

For Abbott: Stephen D'Amore of Winston & Strawn

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