Federal Court Dismisses Device "Consumer" Claims
A federal court last month dimissed claims by plaintiffs concerning hip implants, with an analysis important for other consumer protection-type class action claims. Watkins v. Omni Life Science, Inc., 2010 WL 809820 (D.Mass. 2010).
Plaintiffs were recipients of the Apex Model Replacement Hip. Although neither plaintiff alleged an Apex Hip malfunction, they claimed that the allegedly relatively high rate of failure of the Apex Hip placed them and members of the proposed class at serious risk of future harm. The failure rate was also alleged to have diminished the market value of their hip implants and those of the putative class members. Plaintiffs claimed that they would not have selected the model Hip over other alternative devices but for the representations made by the defendant manufacturer. Plaintiffs asserted claims for breach of implied warranty, breach of contract, unjust enrichment and constructive trust, violations of the Massachusetts consumer protection statute, and violations of the consumer protection laws of all other states (for the class).
Omni filed a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6), arguing that no legally cognizable injury was pled in any of plaintiffs' claims. Plaintiffs' reply argument, as is typical, was a benefit of the bargain theory. Plaintiffs claimed that an accident-related injury or a manifested defect need not be shown as a predicate of recovery on their consumer claims. They claimed that their sufficient injuries consisted of: (1) the apprehension caused by the prospect of an increased risk of hip failure and (2) the extra money that they paid for an overvalued Apex Hip.
First, the court said, although plaintiffs' claims were styled as contract and breach of warranty claims, they actually were tort allegations. A plaintiff cannot disguise a tort claim with mere contract langauge. In Massachusetts, the economic loss doctrine applies, and purely economic losses cannot be recovered in tort or product liability actions in the absence of personal injury or property damage. The court added that the economic loss rule applied to the plaintiffs' consumer protection act claims as well.
As tort claims, plaintiffs failed to allege sufficient injury. Apprehension of a heightened risk stemming from an allegedly defective product that has not failed or caused harm to this plaintiff is insufficient as a matter of law to support a claim. See Anderson v. W.R. Grace & Co., 628 F.Supp. 1219, 1231 n. 6 (D.Mass.1986) (“The weight of authority would deny plaintiffs a cause of action solely for increased risk because no ‘injury’ has occurred.”). Plaintiffs' overpayment argument was also based on a theory of economic loss that has no place in a tort context. See Iannacchino v. Ford Motor Co., 451 Mass. 623, 633, 888 N.E.2d 879 (2008).
To the extent an allegation sounding in fraud was underlying some of the claims, read in the aggregate, the court found that Omni's alleged misrepresentations, as pled, lacked the capacity to mislead consumers, acting reasonably under the circumstances, to act differently from the way they otherwise would have acted. Under Rule 9b, in alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. This was not done.
