Health Law Daily Non-manufacturing seller of medical device exercises reasonable care
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Wednesday, April 14, 2021

Non-manufacturing seller of medical device exercises reasonable care

By Elena Eyber, J.D.

Claims against a non-manufacturing seller of a medical device warranted dismissal as the patient failed to plausibly allege that the seller failed to exercise reasonable care.

The federal district court in Michigan dismissed the patient’s negligence, breach of implied and express warranty, and negligent misrepresentation claims against the non-manufacturing seller of the Option Inferior Vena Cava Filter (Option Filter) medical device. However, the court did not dismiss the patient’s negligence and breach of implied warranty claims against the manufacturer of the medical device while dismissing all other claims. The court found that the patient stated plausible claims to proceed with her negligence and breach of implied warranty actions against the manufacturer (Teal v. Argon Medical Devices, Inc., April 12, 2021, Drain, G.).

Procedural history. The patient brought this action against Argon Medical Devices, Inc. (seller) and Rex Medical, L.P. (manufacturer) after the Option Filter, a surgically implanted medical device, failed and allegedly caused multiple struts to perforate her inferior vena cava. The patient claimed that she suffered serious, life threatening injuries as a result of the Option Filter. The patient asserted that the manufacturers concealed the known risks and failed to warn of known or scientifically knowable dangers and risks associated with the Option Filter. The patient alleged the following claims against the seller and the manufacturer: (1) negligence; (2) breach of implied warranty of merchantability and fitness for a particular purpose; (3) breach of express warranty; and (4) negligent misrepresentation. The seller and the manufacturer moved to dismiss the claims.

Argon’s motion to dismiss. Argon moved to dismiss all claims. Argon claimed that it’s a "non-manufacturing seller." As a non-manufacturing seller of the Option Filter, Argon asserted that its liability is limited to product liability theories pursuant to Michigan state law. In that section, any claims against a non-manufacturing seller are limited to (a) those alleging the failure to exercise reasonable care, including breach of an implied warranty, and (b) those alleging the breach of an express warranty.

Regarding negligence, the patient asserted that Argon, as the exclusive sales agent for the Option Filter, knew or should have known that the Option Filter was, among other purported risks, designed and manufactured in a way as to present an unreasonable risk of tilt and or embedment and an unreasonable risk of perforation. Regarding breach of implied warranty, the patient alleged that the Option Filter was not in a merchantable condition and that Argon impliedly represented and warranted that the Option Filter was safe and of merchantable quality. Argon argued that the patient failed to plead the requisite independent negligence as Michigan law limits a non-manufacturing seller’s liability to instances where the seller failed to exercise reasonable care, including breach of any implied warranty, and where there is a breach of an express warranty.

The court found that the patient did not plausibly allege that Argon, as a non-manufacturing seller, failed to exercise reasonable care with respect to the Option Filter. The court was unable to locate any allegations of independent negligence on Argon’s part to establish a failure to exercise reasonable care claim. The patient’s conclusory allegations that Argon knew and should have known that the device was defective and unreasonably dangerous did not transform otherwise insufficient factual pleadings into allegations that plausibly supported an inference of independent negligence on Argon’s part as required for a non-manufacturing seller.

The patient alleged that Argon breached the express warranties by expressly representing and warranting that the Option Filter was safe and used sales aids comparing the lack of complaints in the FDA’s MAUDE database for its filter as compared to that of other IVC filter manufacturers, while knowing that the lack of data in the MAUDE database was inherently flawed and an unreliable source of information to demonstrate the safety of the Option Filter.

The court agreed with Argon that the patient’s express warranty claim was devoid of any facts as to "when, how, and by whom an express warranty that the product was ‘safe’ was made." Moreover, the claim did not specify the terms of the alleged express warranty. Rather, the patient asserted that at the time and place of advertising, marketing, sale, distribution, and supply of the Option Filter, Argon expressly represented and warranted that the Option Filter was safe and effective. The court found that while the patient was correct to denote that she only needed to plead factual allegations sufficient to reasonably inform the adverse party of the nature of the claim, her express warranty claim was devoid of the requisite factual allegations.

The patient claimed that Argon, at the specific instruction of Rex, knowingly made false and negligent misrepresentations and omissions about the Option Filter’s safety, efficacy, rate of failure, and its approved uses. Argon asserted that the patient’s negligent misrepresentation claim was not sufficiently pleaded as required by Rule 9(b) and was devoid of any identification or description of a representation that it actually made.

The court agreed with Argon and held that the patient’s general allegations failed to put Argon on notice of any specific statements that were fraudulent, nor did they explain why these statements were fraudulent. Moreover, the court found that the patient failed to indicate where and when any alleged misrepresentations were made. Additionally, the court found that the patient’s negligent misrepresentation claim also failed in light of Argon’s status as a non-manufacturing seller. The patient’s claim did not include the requisite factual allegations to establish how Argon, as a non-manufacturing seller, failed to exercise reasonable care in disseminating the alleged misrepresentations. Accordingly, the court dismissed the patient’s negligent misrepresentation claim.

Rex’s motion to dismiss. Rex moved for dismissal of the patient’s complaint for insufficient specificity and for failure to state a claim upon which relief can be granted.

The patient brought a general negligence claim against Rex, who designed, manufactured, marketed, advertised, inspected, labeled, promoted, distributed and sold the Option Filter. According to the patient, Rex breached its duty of reasonable care and was negligent in unreasonably and carelessly failing to properly warn of the dangers and risks of harm associated with the Option Filter and representing that the Option Filter was safe for its intended use. Upon review of the patient’s factual allegations, the court found that the patient stated a plausible claim to proceed with her negligence action. Accordingly, the court denied Rex’s motion to dismiss related to negligence.

The patient asserted a claim for breach of the implied warranty of merchantability and fitness for a particular purpose against Rex. She alleged that Rex breached implied warranties because the Option Filter was not fit for its intended use and purpose. In light of the court’s finding as to the patient’s negligence claim against Rex, the court also found that the patient stated a plausible claim to proceed with her breach of implied warranty claim. Therefore, the court denied Rex’s motion to dismiss related to breach of implied warranty claim.

The patient alleged that Rex breached express warranties by directing Argon to expressly represent and warrant that the Option Filter was safe and effective. Rex contended that, insofar as the patient’s breach of express warranty claim can be construed as one brought pursuant to the UCC, it should be dismissed because there was no contract between the patient and Rex.

The court agreed with Rex and found that the patient failed to allege the requisite contractual privity for her claim to survive. There was no allegation that the patient and Rex were parties to an agreement with one another. The patient did not contend that she purchased the Option Filter directly from Rex. Rather, the patient alleged that through her medical providers she purchased the Option Filter and that through her attending physicians she relied on the purported representations. The court held that these allegations were insufficient to establish privity between the patient and Rex specifically. Accordingly, the court dismissed the patient’s breach of express warranty claim to the extent that it was based on the UCC.

Additionally, Rex argued that the patient’s complaint did not specify the terms of any alleged expressed warranty, nor did she include any factual support for allegations as to when, how, and by whom an express warranty was made. The court found that similar to the claim as to Argon, the patient did not specify the terms of an alleged express warranty. The patient’s express warranty claim as to Rex was devoid of any facts to when, how, and by whom an express warranty was made. Accordingly, the court dismissed the patient’s breach of express warranty claim against Rex.

The patient alleged that Rex instructed Argon to negligently provide her and her physicians with misrepresentations regarding the safety, efficacy, rate of failure, and approved uses of the Option Filter. As the court explained above in relation to Argon’s motion, a negligent misrepresentation claim must meet a heightened pleading standard set forth in Rule 9(b). The patient’s general allegations failed to put Rex on notice of any specific statements that were fraudulent, nor did they explain why the statements were fraudulent. Similar to its findings as to Argon, the court denoted that the patient also failed to indicate where and when any alleged misrepresentations were made. Accordingly, the court held that the patient failed to meet her burden under the heightened scrutiny pursuant to Rule 9(b). Thus, the court dismissed the patient’s negligent misrepresentation claim against Rex.

The case is No. 20-cv-11018.

Attorneys: Alyson L. Oliver (Oliver Law Group PC) for Jessica L. Teal. John R. Christie (Lewis Brisbois Bisgaard And Smith LLP) for Rex Medical, Inc., d/b/a Rex Medical, L.P. and Rex Medical, L.P.

Companies: Rex Medical, Inc., d/b/a Rex Medical, L.P.; Rex Medical, L.P.

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