I Got A Rock

Happy Halloween to all our faithful readers.  Your humble blogger's kids are grown and mostly away to college, but we have fond memories of watching "It's the Great Pumpkin, Charlie Brown," with our gang.

This annual tradition began with the 1966 American prime time animated television special based on the comic strip Peanuts by Charles M. Schulz.  It was the third Peanuts special (and second holiday special, following "A Charlie Brown Christmas") to be produced by Mr. Bill Melendez.  Some interesting trivia on the show here

This year, as well, our thoughts and prayers go out to all suffering from the impacts of Hurricane Sandy.

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Successor Liability Rejected in Aircraft Case

One of the interesting types of projects your humble blogger gets to work on from time to time concerns product liability and mass tort issues that arise from the M&A context, including due diligence going into a deal and successor liability issues coming out of a deal.  Recently a federal court held that the successor to the assets of an aircraft manufacturer was not liable for injuries arsing from the crash of an airplane built before the acquisition. See Thornton v. M7 Aerospace LP, No. 12 C 329, (N.D. Ill., 10/23/12).

The aircraft was a Fairchild Aircraft SA227-DC Metro 23, with tail number VH-TFU.  On approach to Lockhart River Airport, Australia, the aircraft crashed, resulting in the deaths of the passengers and crew. The incident was one of the worst civil aviation accidents in Australian history.  The plane was designed, manufactured, assembled, tested, and sold by Fairchild Aircraft, Inc. Fairchild went bankrupt in 2002 and as a result, Fairchild and defendant executed an Asset Purchase Agreement.  The agreement stated that the buyer/defendant assumed no ”liability for personal injury or property damage arising at any time out of or in connection with goods manufactured, produced, distributed or sold by the Sellers prior to the Closing Date, including but not limited to any Product Liability claims." 

In 2007, plaintiffs commenced this negligence and strict products liability action against numerous defendants including defendant M7. In the Second Amended Complaint, plaintiffs asserted claims against M7 in two categories: direct claims and indirect claims. First, plaintiffs’ indirect claims sought to impose vicarious liability on defendant as successor-in-interest to Fairchild. Plaintiffs alleged that defendant “is indirectly liable in strict product liability and negligence for the actions of its predecessor, Fairchild, in its defective and negligent design of the [Subject Aircraft], its failure to warn of the defects and its failure to advise operators to fit the aircraft with an "Enhanced Ground Proximity Warning System.” Second, plaintiffs’ direct claims sought to impose liability on defendant for its independent conduct in allegedly breaching of its own duty to so warn and advise.

The EGPWS claims argued M7 was negligent in failing to advise the owner and operator of the aircraft to install a new system that system was an improvement on the conventional ground proximity warning system because, among other reasons, it allegedly was capable of providing increased warning time to pilots about potential terrain conflicts by incorporating additional functions into the conventional ground proximity warning system.

Defendant moved for summary judgment.  On plaintiff’s claims of successor liability, it argued that
M& had as a matter of law “no liability as the successor corporation to Fairchild.” The Court agreed.
Under applicable Illinois law, a corporation which purchases the assets of another corporation is not generally liable for the debts and liabilities of the transferor in the absence of an agreement providing otherwise. The court explained that this traditional rule of successor corporate non-liability developed as a response to the need to protect bona fide purchasers from unassumed liability and was designed to maximize the fluidity of corporate assets. See Diguilio v. Goss Int’l Corp., 389 Ill. App. 3d 1052, 1059-60, 329 Ill. Dec. 657, 906 N.E.3d 1268 (Ill. App. Ct. 2009).

 A successor corporation can face liability, if one of the following four exceptions applies: (1) if there is an express or implied agreement of assumption; (2) if the transaction between the purchaser and the seller corporation is a consolidation or merger; (3) if the purchaser is a continuation of the seller; or (4) if the transaction is an attempt to escape liability for the seller’s obligations.  Illinois does not recognize the so-called product line exception.

Here, the undisputed evidence showed that the Bankruptcy Court approved the transfer of
Fairchild’s assets “free and clear of any and all liens, claims and encumbrances”, and to a purchaser that was not an insider, affiliate or owner of Fairchild. Plaintiffs argued that defendant ought to have successor liability because it “impliedly assumed Fairchild’s continuing duty to warn.”  But, the court noted, the question is not whether M7 impliedly assumed a duty to warn, but rather whether M7 had an implied agreement with Fairchild whereby M7 agreed to assume Fairchild’s liabilities.  And it did not.

On the direct claim, plaintiffs alleged that defendant owed – and breached – an independent duty to advise owners and operators of the accident aircraft to fit that aircraft with an Enhanced Ground Proximity Warning System. To prevail on their claims of direct (i.e. non-successor) liability, plaintiffs needed to establish that defendant owed an independent duty to warn of the alleged defects in the plane.  Illinois courts have recognized a limited cause of action against the purchaser of a
product line for failing to warn of defects in its predecessor’s products. See Kaleta v. Whittaker Corp., 221 Ill. App. 3d 705, 715, 164 Ill. Dec. 651, 583 N.E.2d 567 (1991).  The critical element required for the imposition of this duty is a continuing relationship between the successor and the
predecessor’s customers benefitting the successor. To determine the presence of a nexus or
relationship effective to create a duty to warn, the following factors are considered: (1) succession to a predecessor’s service contracts; (2) coverage of the particular machine under a service contract; (3) service of that machine by the purchaser corporation; and (4) a purchaser corporation’s knowledge of defects and of the location or owner of that machine.

Here, viewing the evidence in the light most favorable to plaintiffs, there was an insufficient nexus or relationship between defendant and the operator of the aircraft to impose an independent duty to warn upon defendant. Plaintiffs focused their argument on the relationship between defendant and the product line generally, but that is not the legal standard: Illinois law focuses on the relationship between the successor (here, defendant) and the operator of the allegedly defective unit (here, Transair).  It was undisputed that M7 did not assume any of Fairchild’s serve contracts relating
to the plane, and that M7 never serviced, maintained, or repaired the plane. There was no evidence that it worked on or had any contact with the subject aircraft.

Finally, under a voluntary undertaking theory of liability, the duty of care to be imposed upon a defendant is limited to the extent of the undertaking.” Bell v. Hutsell, 2011 IL 110724, 353 Ill. Dec. 288, 293-95, 955 N.E.2d 1099 (2011) (stating that Illinois courts look to the Restatement (Second) of Torts to define the theory). Here, defendant argued that plaintiffs’ voluntarily undertaking theory fails because even if it undertook a duty (which it disputed) regarding warnings and advice to owners and operators, plaintiffs failed to proffer sufficient evidence of reliance. Again, the Court agreed. Illinois law requires proof of reliance; that is, proof that the operator (here, Transair) relied on the defendant’s voluntary undertaking of a duty to warn. See, e.g., Chisolm v. Stephens, 47 Ill. App. 3d 999, 7 Ill. Dec. 795, 365 N.E.2d 80, 86 (Ill. App. Ct. 1977). Plaintiffs offered no such proof.

Summary judgment granted.

"Doe" Wins Challenge to CPSC Database

Readers may recall we have posted before about an unnamed company that had filed a suit, under seal, to challenge aspects of the Consumer Product Safety Commission's new public database. The federal district court found for the company earlier this week, ruling that the agency's attempt to publish an incident report on the database about the company's product was arbitrary and capricious, and an abuse of discretion. See Company Doe v. Tenenbaum, No. 8:11-cv-02958 (D. Md.10/9/12).

The Consumer Product Safety Improvement Act of 2008 mandated the creation of a consumer product safety information database, and from the beginning, there was controversy about the absence of an adequate process for addressing false and inaccurate reports that will scare consumers, harm business, and generate no additional safety gains; the need to employ means to prevent the submission of fraudulent reports of harm while not discouraging the submission of valid reports; the importance of not putting the governmental imprimatur on voluntary data that has not been verified; and the absence of a sufficient time period allocated for manufacturers to evaluate and respond to any proposed report.

Much of the opinion is redacted, but the suit related to material inaccuracies with respect to a report of alleged injury that found its way into the database. The company protested inclusion of the report, and presented evidence regarding the alleged injury and alleged risk of harm. The CPSC apparently redacted the report twice in an attempt to make it not materially inaccurate. Plaintiff then sued, saying the issues had not been fixed, and later used results of the CPSC's ongoing investigation of the product to renew its objections.  Eventually, the CPSC rejected the company's final objection to the many-times redacted report.

The court cannot substitute its judgment for the agency's but can overturn arbitrary and capricious agency actions.  The court found that the publication decision was an abuse of discretion, because it violated the requirement that the harm "relate to" the use of the product, and would violate the prohibition of publication of materially inaccurate information.  Related to was correlated with associated with or connected with, and the CPSC initial agreements to redact much of the report as inaccurate undercut the later argument that a sufficient "relation to" had been demonstrated to let the final version be published. And mere speculation about a causal link was not sufficient evidence of an actual connection. Similarly a theoretical possibility or mere mathematical possibility was not proof of a sufficient relationship.

On the second prong, the court attempted to put itself in the shoes of the average consumer, and to use inferential reasoning to conclude the report was materially inaccurate and misleading. Interestingly, the court found that the CPSC standard disclaimer that it does not guarantee the accuracy of outside submitted reports, this was "boilerplate" that would not be of interest to the average consumer.

Finally, the court rejected the CPSC's "doomsday" arguments about the impact of the case on the database. The regulations expressly permit a challenge to materially misleading reports, and the court referenced a 2011 GAO report on the evealuation of reports, so a finding that a report is indeed inaccurate would not bring the "apocalypse."  Nonetheless, the ruling appears to represent a clear victory for consumer product manufacturers who are worried about inaccurate consumer complaints.  The decision does not strike at the idea of the database itself as much as it may encourage the CPSC to take a closer look at any reports that a manufacturer challenges as materially inaccurate or misleading.

Court of Appeals Applies CAFA Mass Action Provision

The Seventh Circuit has resolved a conflict between district court decisions about whether a motion to consolidate and transfer related state court cases to one circuit court constitutes a proposal to try the cases jointly triggers the “mass action” provision of the Class Action Fairness Act (“CAFA”).  The court held that plaintiffs’ motion to consolidate did propose a joint trial, and thus removal was proper. See In re Abbott Laboratories Inc., No. 12-8020 (7th Cir. 10/16/12).
 

Between August 2010 and November 2011, several hundred plaintiffs filed ten lawsuits in three different Illinois state courts for personal injuries they alleged were caused by Depakote, a prescription medication.  Later, plaintiffs moved the Supreme Court of Illinois to consolidate and
transfer their cases to one venue, St. Clair County. In the memorandum in support of their motion, plaintiffs indicated they were requesting consolidation of the cases through trial and not solely for pretrial proceedings. Defendant removed each of the cases to federal court (in two districts) asserting that the motion to consolidate brought the cases under CAFA’s “mass action” provision, which allows the removal of any case where 100 or more people propose to try their claims jointly. Plaintiffs moved to remand in both courts.

The Southern District granted the motion to remand, concluding that the language in the motion to consolidate did not propose a joint trial. The Northern District court denied plaintiffs’ motion to
remand, noting that the motion to consolidate clearly sought to consolidate the 10 complaints for all purposes, including for purposes of conducting a trial.  Plaintiffs argued on appeal that they did not specifically propose a joint trial because their motion to consolidate did not address how the trials of the various claims in the cases would be conducted, other than proposing that they all take
place in St. Clair County. In plaintiffs’ view, for the mass action provision to apply, they would have needed to take the further step of requesting a joint trial or an exemplar trial that would affect the remaining cases.

The court of appeals noted that plaintiffs argued that they never specifically asked for a joint trial, but a proposal for a joint trial can be implicit. See Bullard v. Burlington Northern Santa Fe Railway
Co., 535 F.3d 759 (7th Cir. 2008).  A joint trial does not have to encompass joint relief. For example, a trial on liability could be limited to a few plaintiffs, after which a separate trial on damages could be held. Similarly, a trial that involved exemplary plaintiffs, followed by application of issue or claim preclusion to more plaintiffs without another trial, would be one in which the claims of 100 or more persons are being tried jointly. In short, said the court of appeals, a joint trial can take different forms as long as the plaintiffs’ claims are being determined jointly.

Here, plaintiffs may not have explicitly asked that their claims be tried jointly, but the language in their motion came close. Plaintiffs requested consolidation of their cases “through trial” and “not solely for pretrial proceedings.” They further asserted that consolidation through trial “would also facilitate the efficient disposition of a number of universal and fundamental substantive questions applicable to all or most Plaintiffs’ cases without the risk of inconsistent adjudication
in those issues between various courts...”  It is difficult to see how a trial court could consolidate the cases as requested by plaintiffs and plaintiffs’ claims would somehow not be tried jointly. Although the transferee court will decide how their cases proceed to trial, it does not matter whether a trial covering 100 or more plaintiffs actually ensues; the statutory question is whether one has been proposed.

The court thus reversed the Southern District's grant of the plaintiff's motion to remand and affirmed the Northern District's ruling. 

Remembering Senator Specter

Our thoughts and prayers go out to law school classmate Shanin Specter and his entire family on the passing of his dad, Senator Arlen Specter,  the longest-serving United States Senator in Pennsylvania’s history and recently a Visiting Professor at our alma mater, the University of Pennsylvania Law School.

The Senator had been a partner at Dechert, but had gone to Washington before I joined them, my prior firm. But he graciously returned periodically to talk to the partners, and even once agreed to speak at a seminar I organized on product liability issues.

A man of keen intelligence and determination, Senator Specter dedicated his life to public service, and also brought a lawyer's training and a practicing lawyer's instincts to Washington. He left an indelible mark on the makeup of the federal courts, including the U.S. Supreme Court, as he participated in14 or so high court confirmation hearings during a Senate career that spanned five presidencies. He also played a sizable role in recommending judicial appointees for the U.S. District Court for the Eastern District of Pennsylvania and the Third Circuit.  Earlier in his career, Arlen Specter had served as Philadelphia’s district attorney and also participated in the Warren Commission’s investigation into the assassination of President John F. Kennedy.
 

 

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Defense Verdict Upheld on Post-trial Motion in Levaquin MDL

About 1700 federal cases sit in the MDL for the product Levaquin makers.  Levaquin is an antibiotic used to treat a variety of bacterial infections, including upper respiratory infections. Plaintiffs in the MDL allege they have been prescribed Levaquin, and allege that it causes tendons to rupture. They claim that defendants' warnings about this alleged side effect were inadequate.  Defendants deny these allegations.

In this mass tort, the MDL court has begun to try bellwether cases. Recently the MDL court rejected a plaintiff's post-trial motion after he lost the third such trial. See Straka v. Johnson & Johnson, No. 08-5742 (D. Minn., 9/28/12).  A jury found that the alleged failure to warn Straka's prescribing physician about the risk of tendon rupture did not cause the plaintiff's injuries. After trial, one issue was the ubiquitous and almost never prevailing "verdict against the weight of the evidence" argument.  The court disposed of this by noting the sufficient evidence at trial supporting the jury's finding in that Straka's injuries were caused by something other than Levaquin, and that a different warning would not have changed his physician's decision to prescribe Levaquin. Defendants presented evidence about Straka’s steroid use and testimony that steroid use can contribute to tendon injury without the use of Levaquin.  And defendants did a good job presenting evidence that the prescriber could not remember reading the Levaquin label and did not learn of the tendon-associated risks of Levaquin until well after the black box warning was added and a Dear Doctor letter was distributed.

Perhaps more interesting for the trial lawyers among our readers is the argument for a new trial because one juror worked for a company that had a business connection to one of the defendants. Specifically the juror disclosed after trial began that her employer provided services to one of the defendants' (J&J) disability insurance carrier. Straka contended the doctrine of “implied bias” required the court to strike this juror. But the juror could not recall having ever worked on a Johnson & Johnson issue, and she indicated that she was unaware what proportion of her work came indirectly from Johnson & Johnson. When asked if her company’s connection with Johnson & Johnson would affect her ability to be fair and impartial, she said no. 

The doctrine of implied bias (also referred to in some cases as “implicit bias”) requires a court to strike a juror in extreme situations where the relationship between a prospective juror and some aspect of the litigation is such that it is highly unlikely that the average person could remain impartial in his deliberations under the circumstances. See Sanders v. Norris, 529 F.3d 787, 792 (8th Cir. 2008).  The juror here did not have the type of financial relationship that would require the Court to presume implied bias: she was not employed by defendants, or even employed by a company that worked directly for Johnson & Johnson.  Nor was it unlikely that the average person could remain impartial in deliberations in this situation. She was sufficiently removed from Johnson & Johnson that she did not realize that her company did any work relating to the defendants until a co-worker recognized it. So no error in proceeding.

[FYI, according to the court, some MDL parties discussed have discussed a tentative settlement agreement reached on September 25, 2012, in a conference held in front of Chief Magistrate Judge Boylan. This tentative settlement agreement is being drafted, and involves the case inventories of 6 law firms. The effect of this settlement would reduce the MDL case count by 845 cases and plaintiffs. At the time of the status conference several other plaintiffs' firms have expressed an interest in exploring settlement, but there remain firms that are interested in going forward with the litigation, according to the court.]


 

Another Federal Court Applies Mensing

A federal court in Ohio recently ruled that a plaintiff who used only the generic form of the drug  metoclopramide has no cause of action under the Ohio Product Liability Act against makers of the brand-name drug. Hogue v. Pfizer Inc., No. 10-805 (S.D. Ohio, 9/27/12).

In late 2000, Ms. Hogue's physician prescribed Reglan® to treat plaintiff''s abdominal pain and digestive problems. Ms. Hogue then began to take generic metoclopramide and continued to do so until about August 2009. The parties stipulate she ingested only the generic version of metoclopramide, which the Brand Defendants did not manufacture. She later allegedly suffered side effects and sued both the branded and the generic manufacturers for an alleged failure to warn. And so  we have two rulings to reflect the status of each kind of defendant.

The generic defendants filed a motion to dismiss, arguing that the United States Supreme Court held in PLIVA, Inc. v. Mensing that such state law tort claims against generic drug manufacturers are preempted by federal law. Generic defendants pointed out that the Mensing case involved the same generic medication at issue in this case, the same alleged injuries, some of the same generic drug manufacturer defendants, the same claims, etc.  Plaintiff argued that nonetheless the Mensing holding was somehow more limited.  The court agreed with the defendants: First, the Supreme Court rejected the theories that generic drug manufacturers could use the "changes-being-effected" ("CBE") process to change their labels to satisfy the state law. The FDA interprets the CBE process to allow generic manufacturers to change generic drug labels only to match an updated brand-name label or to follow the FDA's instructions. Any unilateral change to labels by generic drug manufacturers would violate the federal requirement that generic drugs be identical to brand name drugs in both substance and labeling.

Second, the court noted that  the Supreme Court has considered and rejected the plaintiff's argument that the generic drug manufacturers could have sent "Dear Doctor" letters as additional
warnings. Dear Doctor letters qualify as "labeling" and therefore must be consistent with, and not
contrary to, the rest of the drug's approved labeling.  Any Dear Doctor letter containing substantially new warnings would not conform to the approved labeling. Moreover, if generic drug
manufacturers, but not the brand-name manufacturer, sent such letters, that would inaccurately imply a therapeutic difference between the branded and generic drugs and thus could be impermissibly misleading.

Third, the Supreme Court already considered whether the generic drug  manufacturers could have complied with the state laws by proposing stronger warning labels to the FDA. Even assuming such a duty exists on the part of generics, which is not clear, fulfillment of that duty would not have satisfied the state law requirements. Because it was impossible to comply with both federal law and state law, the plaintiff's state law claims were preempted.

Plaintiff further argued that Mensing didn't apply when the FDA has designated a defendant's drug as a reference listed drug ("RLD"). But the designation of a drug as an RLD does not change the manufacturer's status as an Amended New Drug Application ("ANDA'') holder,  the RLD designation does nothing to alter an ANDA holder's duties concerning labeling changes.

On the legal side, even if a failure to warn was preempted, plaintiff argued that several of her legal claims were not based on a theory of failure to warn. For example, plaintiff stated her breach of warranty claims did not conflict with any federal requirement regarding labeling and thus were not preempted. But the required analysis here is to focus not on the label or caption of the count, but the substance of the claim; and the other claims such as breach of warranty were in fact predicated on the failure to provide adequate warnings and were preempted. See also Smith v. Wyeth, 657 F.3d 420, 423 (6th Cir. 2011 ), cert. denied 132 S. Ct. 2103.

Brand defendants moved for summary judgment, arguing that Ohio law requires a plaintiff to prove the defendant manufactured the product that caused her injuries. Because they did not manufacture the metoclopramide Ms. Hogue ingested, her claims against them should fail as a matter of law.

The court noted that under Ohio law the defendant must have sold the actual product that was the cause of harm for which the claimant seeks to recover compensatory damages, and proof that a manufacturer designed or sold the type of product in question is not proof that the manufacturer did so for the actual defective product in the product liability claim. The Ohio Product Liability Act displaced plaintiff's common law claims, and required plaintiff to prove the defendant manufactured the product that caused her injuries.  They did not, so summary judgment was warranted.

(Note SHB works for the defense in part of this litigation.)
 

 

 

Panel Rejects MDL Status for Brass Plumbing Claims

We have posted before about the MDL process and the importance of the initial decision by the Panel on ordering coordination. Last week the Judicial Panel on Multidistrict Litigation declined to consolidate the suits by plaintiffs alleging injuries over brass plumbing fittings.See In re Uponor Inc., F1960 Plumbing Fittings Products Liability Litigation, MDL No. 2393 (JPML 9/27/12).

We like to flag for readers, for any insights they may offer, the less common decisions rejecting MDL status, see also here and here.

The plaintiffs alleged in this litigation that high-zinc-content brass components on the plumbing fittings failed, due to corrosion that caused the loss of zinc. This resulted, they said, in various forms of property damage, including the loss of integrity of the components, leaks, loss of water pressure, and other problems.This litigation currently consists of nineteen actions pending in
seven districts, but the Panel was notified of four additional, potentially related actions.

All involved homeowners supported plaintiff’s motion. The Uponor/Wirsbo defendants also supported the motion but  other responding defendants, which are various plumbing and supply defendants,  builders, or installers, opposed the motion and, alternatively, suggested a different transferee forum.

The Panel rejected the motion, noting that "several practical considerations" make the request to centralize unworkable. Most fundamentally, this request rested on a factual assumption – that F1960 fittings are involved in every action – that required the Panel to make a determination not apparent on the face of most complaints. Very few complaints actually mentioned the F1960
standard. Instead, plaintiffs typically framed their complaints as broadly involving high zinc yellow brass fittings and other attendant components. The exceedingly general language that the homeowners employed in most actions to describe the defective components at issue
made it impossible in most cases to transfer “F1960 claims” and then separate and remand, other product claims.

But even assuming that the court could separate and remand the non-F1960 claims, the proposed transfer would still double the forums in which numerous local defendants would have to litigate, or [in an important practical observation]  at a minimum, monitor. Centralization might thus force many local defendants – builders, plumbers, suppliers – to prosecute their indemnity claims against the manufacturer in the MDL, while still having to defend claims that they supplied, built homes with, or installed defective plumbing components elsewhere.

Fragmentation of this litigation, said the Panel, also would increase the risk that the involved
courts will rule inconsistently on identical issues of state law, such as issues of compliance with Nevada’s unique state pre-litigation statute regarding construction defects. The potential inefficiencies and inconvenience associated with centralizing this litigation, separating out F1960 claims etc.,  outweigh any possible benefits of, or added efficiencies to, resolving common claims regarding the F1960 fittings.

"Centralization is not a cure-all for every group of complicated cases."  The actions here were in
distinct procedural postures, and most of the advanced actions seem to be progressing well in the District of Nevada.

Thus, moving parties failed to convince the Panel that Section 1407 transfer of F1960 claims will benefit the parties and witnesses, or that centralization will produce sufficient clarity or efficiency in this already complicated litigation to outweigh the added inconvenience, confusion and cost that would be imposed on numerous parties.
 

 

Supreme Court Declines to Review Medical Device Case

Earlier this week, the Supreme Court declined to hear plaintiff's challenge to the Fourth Circuit's decision on an important aspect of medical device law in Walker v. Medtronic Inc., No. 11-1418 (U.S. 10/1/12). 

The Court denied the petition for a writ of certiorari from plaintiff Walker, who appealed a Fourth Circuit decision that held that the 1976 Medical Device Amendments to the Federal Food, Drug and Cosmetic Act preempted her suit alleging that defendant's medical device caused her husband's death.  The denial may help to clarify the standard set forth in Riegel v. Medtronic, which held that state law requirements are generally preempted by the MDA.  More specifically, the case relates to the so-called “parallel violation claim” exception to the general rule of medical device preemption.  Readers may recall that some dicta in Riegel noted a theoretical possible exception for when a claim of a violation was "parallel" to and not different than the FDA's actual requirements.

The court of appeals, 2012 WL 206036, slip op. (4th Cir. Jan. 25, 2012), offered a very narrow view of this exception, a good thing for manufacturers.  Walker alleged he had used a Class III device designed to infuse a preset amount of  medicine into the fluid that surrounded his spinal cord.  Plaintiff passed away, and a claim was filed alleging that the device was defective, leading to a fatal overdose.  Plaintiff's attempt to evade the reach of preemption turned on language in the product literature that the device would give the specified dosages ±15%, language plaintiff said was a “guarantee of performance,” creating an un-preempted “parallel” violation claim. 

The court held the parallel exception is quite narrow. The FDA has performance standards, under which a manufacturer must guarantee a particular level functioning or performance.  The FDA may condition its grant of premarket approval upon such performance standards if it determines that a performance standard is necessary to provide reasonable assurance of the safety and effectiveness of the device. See 21 U.S.C. §360d(a)(1).  But the establishment of a performance standard is a highly formal process, requiring notice, findings of fact on risks, and comments from interested stakeholders.  

So, when a plaintiff asserts that a statement or representation or feature that hasn’t gone through the formal FDA procedure is a “performance standard,”  that is in fact asserting something different from or in addition to the FDA standards for the product within the meaning of the Act’s preemption clause. Thus, it is preempted.  The court of appeals concluded that the only mechanism for creating a binding, ongoing performance requirement is the creation of a performance standard. And the plus or minus 15 percent specification was not a performance standard.

That makes complete sense because the device in question was manufactured in full compliance with what the FDA required.   Expectations that may have been generated by literature surrounding the product are not the same thing as FDA standards. The device was not required to always dispense medication within the range of the plus or minus 15 percent.  And for plaintiff to try to sue over this feature would be to seek to impose a more demanding standard than that of the FDA, rather than just a parallel one.

Walker appears to be one of the first appellate court decisions to reject this type of claim on the basis that a mere device malfunction that does not relate to a formal performance standard is not going to be enough to establish a “parallel” violation claim. And the Supreme Court leaves it in place.