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William F. Horsley
William F. Horsley, P.A.
Greensboro, NC
www.horsleylawfirm.com
[NOTE: Portions of this paper were also presented at an
earlier Academy Product Liability Seminar April 20, 2001.]
Medical technology is a key component of modern patient
care. Entrepreneurial device manufacturers now make everything
from tongue depressors to Jarvik-7 artificial hearts. Medical
devices are a multi-billion dollar industry, with even more
growth forecast in the coming years. However, accompanying
this growth, and in part because of it, are significant
product liability risks. For the patient, there is usually a
very small margin for error. The pacemaker either hums along
perfectly, or a serious medical crisis may result. If a
life-support ventilator does not function flawlessly, the
patient may die or become brain-damaged. When things go wrong,
the stakes can be high.
I. RELEVANT REGULATORY BACKGROUND
Medical devices are regulated by the Federal government.
The Medical Devices Amendments to the Food, Drug and Cosmetic
Act (MDA), enacted in 1976, were expressly intended to protect
consumers from “increasingly complex devices with pose
serious risk if inadequately tested or improperly designed or
used.” S. Rep. No. 33, 94th Cong., 2d Sess. 5, reprinted in
1976 U.S. Code Cong. & Admin. News., 1070, 1075.\
Under this law, the Food and Drug Administration (FDA) is
required to promulgate regulations classifying devices into
one of three discrete categories. See 21 U.S.C. §360c. Class
devices are defined as those which generally pose little or no
threat to public health or safety. See 21 U.S.C. §366c(a)(1)(A).
This class includes devices such as tongue depressors,
bedpans, crutches and elastic bandages. See 21 C.F.R. §§880.5075,
880.6230, 880.6730, 890.3150. Class II devices are those which
are more complex than Class I devices, and which pose a
somewhat greater risk to health. See 21 U.S.C. §360c(a)(1)(B).
Examples include such items as oxygen masks, tampons and
syringes. See 21 C.F.R. §§868.5580, 884.5470, 880.5570.
Finally, Class III devices are those which “present a
potential unreasonable risk of illness or injury.” See 21
U.S.C. §360c(a)(1)(C).
Each type of device is subject to a different degree of
regulation. Class I devices are subject only to “general
controls,” which apply to all medical devices, such as the
Device Labeling and Good Manufacturing Practice Regulations.
See 21 U.S.C. §360c(a)(1)(A) & 21 C.F.R. §801.109c &
(d) & §820.1 et seq. Class II devices may be subjected to
“special controls” including the promulgation of
performance standards, postmarket surveillance, patient
registries, and guidelines if the FDA determines, through
regulatory action, that such controls are necessary to provide
a reasonable assurance of safety and effectiveness for a
specific device. See 21 U.S.C. §360c(a)(1)(B). Class III
devices must receive premarket approval (PMA) from the FDA.
See 21 U.S.C. §360c(a)(1)(C) & 360e. By statute, the FDA
cannot grant PMA without first determining that there is a
“reasonable assurance that such device is safe under the
conditions of use prescribed, recommended or suggested in the
proposed labeling thereof.” 21 U.S.C. §360e(d)(2). For the
FDA to make such a finding, an applicant for PMA must furnish
the agency with safety and efficacy data from non-clinical
laboratory studies and controlled prospective studies
conducted in accordance with protocols approved by the FDA.
See 21 U.S.C. §360e c & 21 C.F.R. §814.20.
If a manufacturer wants to generate the scientific data
required to obtain PMA, which it must do in order to market a
Class III device, it may do so under the Investigational
Device Exemption (IDE) provisions of the Food, Drug and
Cosmetic Act (the Act). 21 U.S.C. §360j(g) and 21 C.F.R. §813,
et seq. These provisions authorize the FDA to grant an
exemption permitting experimental devices to be used without
PMA under stringent conditions established and actively
supervised by the agency. 21 U.S.C. §360j(g) and 21 C.F.R. §813,
et seq. Among the requirements the FDA imposes on IDE clinical
trials are:
- the requirement that the investigation receive approval
from the Institutional Review Board (IRB) at any hospital
in which study patients will be treated;
- the requirement that investigators participating in the
study at these institutions will be approved and will be
qualified by training and experience to conduct the
investigation;
- the requirement that the study sponsor will limit
training in the use of the investigational device to such
approved and qualified investigators;
- the requirement that each participating investigator
sign an agreement committing the investigator to conduct
the study in accordance with the study protocol and in
compliance with all conditions stated in the IDE approval;
- the requirement that the sponsor will ship the device
under study, properly labeled, only to approved
investigators;
- the requirement that the sponsor will select a study
monitor to assure compliance by the IRB and approved
investigators and to promptly resolve any reports of
adverse device effects;
- the requirement that the reports concerning the progress
of the IDE trials be supplied to the FDA in a timely
manner; and
- the requirement that patients consent to participation
in the study after being informed of the experimental
nature of the therapy proposed.
21 C.F.R. §§812.1 and 812.110. When the FDA grants an
IDE, the device in question is considered an
“investigational device.” 21 C.F.R.§812.7. Under FDA
regulations, an IDE sponsor, investigator or any person acting
for or on behalf of a sponsor or investigator may not
“promote or test market an investigational device, until the
FDA has approved the device for commercial distribution” or
“represent that an investigational device is safe or
effective for the purpose for which it is being
investigated.” 21 C.F.R. §812.7(a) & (d).
The MDA makes a distinction between devices “in
commerce” prior to the effective date of the legislation,
May 28, 1976, and new devices. All devices which were in
commerce prior to that date may remain in commerce without
further regulatory action by the FDA. 21 U.S.C. §§360c(2)(C),
360c(f)(1), 360(k) and 21 C.F.R. §807.100.
As to new devices, not in commerce prior to the effective
date of the MDA, the MDA provides that they may not be
introduced into commerce without PMA in the absence of one of
the following two circumstances:
First, a post-enactment device may be introduced into
commerce without PMA if it is reclassified into a Class I or
Class II device by the FDA in response to a reclassification
petition pursuant to 21 C.F.R. §860.1 et seq., 21 U.S.C. §360c.
The second way in which a post-enactment device may be
introduced into commerce without PMA is by an FDA
determination that it is “substantially equivalent” to a
“predicate device.” 21 U.S.C. §§360c(2)(C), 360c(f)(1),
360(k) & 21 C.F.R. §807.100. A predicate device is one
which was in commerce prior to the effective date of MDA or
which was introduced thereafter and which as reclassified as a
Class I or Class II device. Id. Under the law, a device is not
“substantially equivalent” to a predicate device unless:
- The device has the same intended use as the predicate
device; and
- The device:
(a) Has the same technological characteristics as the
predicate device, or:
(b) (A) Has different technological characteristics, such
as a significant change in the materials, design, energy
source, or other features of the device from those of the
predicate device;
(B) The data submitted establishes that the device is
substantially equivalent to the predicate device and
contains information, including clinical data if deemed
necessary by the Commissioner, that demonstrates that the
device is as safe and as effective as a legally marketed
device; and
© Does not raise different questions of safety and
effectiveness than the predicate device.
21 C.F.R. §807.100. See, also 21 U.S.C. §360c(I).
Substantial equivalence is claimed and either accepted or
rejected by the FDA via a notification submitted under Section
510(k) of the Act, 21 U.S.C. §360(k), which requires a
first-time marketer to submit a premarket notification to the
FDA advising the agency of its intent to market a new medical
device. 21 U.S.C. §510(k) and 21 C.F.R. §807.81 et seq.
It is important to understand that a device is defined in
terms of its “intended use.” 21 U.S.C. §321(h)(2)-(3).
The FDA regulations define “intended use” as:
[T]he objective intent of the persons legally responsible
for the labeling of devices. The intent is determined by
such persons’ expressions or may be shown by the
circumstances surrounding the distribution of the article.
This objective intent may, for example, by shown by labeling
claims, advertising matter, or oral or written statements by
such persons or their representatives.
21 C.F.R. §801.4. Since the intended use of an article
defines its character as a device, the intended use specified
by the person submitting a premarket notification delineates
the scope of the FDA’s review of such notifications. 21
C.F.R.§814.20(b)(3)(ii); 21 C.F.R. §807.87(e). Moreover,
because the intended use of a given article determines its
existence as a device, different intended uses for the same
physical article give rise to different devices, each of which
must receive premarket approval or clearance pursuant to a
510(k) notification. Id.
The Medical Device Amendments make it unlawful for any
person to sell a new medical device which has not received PMA
or which has not been reclassified as a Class I or Class II
device or which has not been cleared as substantially
equivalent to an existing predicate device under the Section
510(k) premarket notification process. 21 U.S.C. §351(f)(1)(B);
21 C.F.R. §352 (o); §§360c(a)(1)(c), 360c, 360c(f)(1) &
360e; United States v. Various Articles of Device, 814 F.
Supp. 32 (E.D. Tenn. 1992); United States v. An Article of
Device, 687 F. Supp. 990 (W.D. Mich. 1985). Such conduct is
considered unlawful adulteration and/or misbranding of the
device in violation of the provisions of the Act. Id.
Moreover, is a supplier is promoting an intended use which has
not been approved or cleared, he is in effect selling a new
device without appropriate regulatory approval or clearance
and is guilty of adulteration and misbranding in violation of
the Act. 21 U.S.C. §351(f)(1)(B); 21 U.S.C. §352(o).
Similarly, where the agency grants an IDE to conduct clinical
trials concerning an “investigational use” of a device,
the commercial promotion of the device for that
investigational use is unlawful and also constitutes
adulteration and misbranding of the device. 21 C.F.R. §812.7.
This is a crime. 21 U.S.C. §333; 18 U.S.C. §2.
II. OFF-LABEL USE
The use of a device for a purpose other than its
“intended use” is “off-label.” Heretofore, the FDA has
been fairly active in policing the promotion of devices for
off-label uses. The FDA cannot prevent or regulate an
off-label use, only the promotion of the device for an
off-label use.
In Washington Legal Foundation v. Shalala, 13 F. Supp 2d 51
(D. D.C. 1998), the District Court for the District of
Columbia limited the FDA’s ability to control what
manufacturers or sellers of medical devices may say regarding
unapproved or off-label uses of approved pharmaceuticals and
medical devices. The FDA has long been concerned that allowing
manufacturers to, in effect, promote or advertise off-label
uses for products would lead doctors to prescribe or use the
products based on incomplete information, and would discourage
manufacturers from seeking FDA approval of new uses.
The Washington Legal Foundation sought to enjoin the FDA
from enforcing policies expressed in two guidance documents
that restricted certain activities relating to the
dissemination of off-label information. The activities
included:
- pharmaceutical manufacturers’ sponsorship of
continuing medical education seminars (the CME Guidance);
and
- the free distribution of journal articles or textbook
excerpts describing the off-label uses (the Enduring
Materials Guidances).
The CME Guidance was an effort by the FDA to stop the
growing practice of manufacturers’ sponsoring seminars for
physicians in which the sole, or a major, purpose was to take
advantage of the “learned intermediary doctrine” by
inducing physicians to use or prescribe for one purpose a
device which had been approved by the FDA for another purpose.
The Enduring Materials Guideline was intended to prevent
corruption of medical literature.
An example of how this works involved the so-called
“pedicle screw” spinal fixation devices heavily promoted
and used in the late 1980s and early to mid-1990's. Initially,
the manufacturers never conducted any animal, clinical or
pre-clinical studies of these devices, which were to be used
in lumbar fusion surgery. The devices were aggressively
marketed, beginning in about 1984, without any filing the
required Section 510(k) notification. The FDA ordered a
cessation of this marketing effort, after which the Section
510(k) notification was filed by Acromed, the first
manufacturer. This notification represented that the device
was intended for use in spinal surgery. The FDA quickly
determined that the device was not substantially equivalent to
any device in commerce prior to May 28, 1976, and notified
Acromed that its device was a Class III device which required
PMA. In making its decision, the FDA declined to consider the
data Acromed submitted with the notification, since it
consisted entirely of information from Dr. Arthur Steffee,
who, as a principal shareholder in Acromed had a direct
financial interest in the commercial exploitation of the
device.
Not to be deterred, Acromed filed another Section 510(k)
notification, again claiming substantial equivalence to
predicate devices, again without success. A third notification
was then filed, claiming substantial equivalence to bone
screws used for fixation of the long bones of the body, even
though the expressed intended use of the device was in spinal
fusion surgery. The name of the product was then changed and
in its premarket notifications Acromed made no mention of
spinal surgery. In fact, Acromed’s representative stated in
the notification that “[m]ore specifically . . . the Acromed
plates are intended for use in appropriate fractures of long
bones of both the upper and lower extremity . . . .” Based
upon this representation, the FDA concluded that the “bone
screws” were substantially equivalent to predicate devices.
Acromed then applied for an IDE in order to conduct clinical
trials of the device in the human spine. In the IDE
application, Acromed represented that the trials would be
limited to 10 hospitals and 250 patients. Meanwhile, it
aggressively marketed the device for spinal fusion surgery.
The marketing and promotional effort extended well beyond
expanded sponsorship of CME seminars. Once it had obtained
marketing clearance from the FDA, Acromed established a
“Medical Advisory Panel” of selected spine surgeons. The
members of this panel received attractive stock options
through which they could participate in the expected growth of
the company and profits derived from the anticipated public
offering of its stock. The company paid for panel members to
attend meetings at choice vacation spots. In exchange for
these potentially lucrative arrangements, the members of
Acromed’s Advisory Panel contractually obligated themselves
to:
[P]articipate in the education, including participation
in seminars and conferences, and training of other surgeons
in the use of the Corporation’s products.
Additionally, spine surgeons who were members of
Acromed’s Medical Advisory Panel, and who took money and
benefits from the company, actively undertook to publish a
substantial portion of the medical literature bearing on the
subject of pedical screw fixation. Acromed funded the research
in some of these papers (without being identified), and
company employees often participated in drafting or rewriting
portions of the papers. In none of these papers, which
appeared in several “peer-reviewed” journals, was the
economic interest of the authors divulged.
Often, the “peer review” panels were also Advisory
Panel members.
The sum result of this effort, which also included many
other strategies employed by the industry, was that pedical
screw devices won wide acceptance among spine surgeons and,
ultimately, were given limited approval by the FDA.
The Acromed experience provides insight as to the raison
d’etre of the two Guidances attacked in Washington Legal
Foundation v. Shalala. The court held that these two Guidances
were an unconstitutional violation of the pharmaceutical and
medical device industries’ First Amendment right to
disseminate truthful and non-misleading information. The court
held that information concerning off-label uses was not
inherently misleading, though it had the potential to be
misleading. The court also noted that prescribing an approved
product for unapproved use is not unlawful and, therefore,
speech that promoted such activity was not inherently
unlawful. Although the court recognized the FDA’s interest
in protecting the health and safety of the public, the court
rejected as overly paternalistic the Agency’s asserted
interest in insuring that physicians are not misled.
The FDA, in 1998, issued a final rule pursuant to Section
401 of the Food and Drug Administration Modernization Act of
1997 (DAMA). Manufacturers may now disseminate information
concerning off-label use so long as they make the following
disclosure: “This information concerns a use that not been
approved or cleared by the Food and Drug Administration.” 63
C.F.R. §****. Then, in a supplemental ruling to its original
W.L.F. case, the court held that its original ruling (on the
two Guidances) was not limited to the specific guidance
documents at issue, but rather extended to the policies
underlying the Guidances. Thus, there is serious doubt as to
the constitutionality of Section 401 of DAMA and its
implementing regulations.
III. PREEMPTION
The MDA contains language that prevents the states from
having different requirements for safety and labeling of
medical devices. Section 360k of the MDA provides:
[N]o State or political subdivision of a State may
establish or continue in effect with respect to a device
intended for human use any requirement
(1) which is different from, or in addition to, any
requirement applicable under this chapte to the device, and
(2) which relates to the safety or effectiveness of the
device or to any other matter included in a requirement
applicable to the device under this chapter.
21 U.S.C. §360k(a) (1994). As seen above, there is little
review by the FDA of §510k (equivalent) devices already on
the market prior to 1976. This lack of review and few FDA
requirements for these devices, they do not raise preemption
issues. The anticipated closer scrutiny of a device by the FDA
under the PMA process may result in preemption of suits
involving these devices.
Medtronics, Inc. v. Lohr, 518 U.S. 470 (1996) was a claim
against the manufacturer of a cardiac pacemaker which failed.
Medtronic argued that the MDA preempted state common law
actions for negligent manufacturing and failure to warn, but
conceded that claims based on negligent design were allowed.
The Court held that the MDA did not deny a state the right to
provide traditional remedies for violations of common law
duties when those duties paralleled federal requirements.
Preemption would have the effect of granting complete immunity
from design defect liability to an entire industry that needed
stringent regulation because there was no explicit private
cause of action against manufacturers in the MDA.
In Haidak v. Collagen Corp., 67 F. Supp.2d 21 (D. Mass.
1999), plaintiff sued the manufacturer of a cosmetic collagen
injection for selling a defective product. A prior, 1st
Circuit, case had determined that the PMA review of the
product by the FDA preempted the claim. However, in the
meantime, the Supreme Court had decided Medtronic v. Lohr,
which the Haidak court ruled did not carve out an exception
for PMA devices and, therefore, public policy mitigates
against extending preemption without specific Supreme Court
approval. Collagen’s motion for summary judgment was denied.
A state court holding disapproving preemption is Weiland v.
Teletronics Pacing Systems, Inc., 721 N.E.2d 1149 (Ill. 1999),
which involved cardiac pacemakers which received PMA review as
Class III devices. The court found that PMA for pacemakers
only approves or rejects the manufacturer’s design - the FDA
does not propose a design and thus imposes no requirements on
the final design of the device. Thus, in the court’s view,
there is no preemption under the MDA unless the FDA specifies
and approves the final device design.
IV. AVAILABLE CLAIMS
Product liability claims arising out of the use of a
medical device have the same basis in law as any other product
claim. Claims sound in negligence and breach of warranty
(express and implied). Cases in the area of pharmaceutical and
medical device liability are a fairly diverse group. A
potential drug liability claim can arise from having been
prescribed or given the wrong medication from the physician or
pharmacist, or from having been injured by a dangerous or
defective prescription or over-the-counter drugs. Cases
involving medical device liability can arise from the improper
implantatin of a prosthesis, total or partial hip or knee
replacement, pacemakers and heart valves, IUDs, and breast or
penile implants. Common failures include loosening, imadequate
bonding to bone or tissue, leaking, or chipping or breakage.
Medical device claims can also be predicated on defective
medical tools, such as syringes or surgical instruments.
One or more of the following legal theories may apply:
- Defective or inadequate warnings, or a failure to warn.
This can be to a drug’s danger or side effects,
including reactions with other medications, and as to
dangers from medical devices
- Inadequate testing on a medication prior to its use,
which can include issues of testing on animals or humans
- Overpromotion. The increase in aggressive marketing and
advertising efforts by manufacturers of prescription drugs
has led to a corresponding increase in liability for
injuries attributed to the drugs being marketed
- Defectively designed drug or device, one that is
arguably unfit for its intended purpose or is not
merchantable
- Tainted or contaminated drugs.
General product liability concepts of negligence and breach
of warranty apply in medical device or product cases and are
discussed below. All, or nearly all, of the above possible
claims arose in the context of litigation over the food
supplement, L-tryptophan, in the 1980s and 90s.
L-tryptophan is an essential amino acid, usually found in
dairy products or meat. L-tryptophan and products containing
it, were sold in the U.S. as “nutritional supplements.” As
such, they were not regulated by the FDA. The products were
promoted by distributors as effective in treating disorders
such as insomnia, depression, and premenstrual syndrome. One
of the largest manufacturers, a Japanese company called Showa
Denko, began manufacturing raw L-tryptophan using
genetically-engineered bacteria in an unusual fermentation
process. Because its manufacturing process allowed it to
undercut its competitor’s prices, Showa Denko was able to
capture the lion’s share of the U.S. market for bulk L-tryptophan.
In the mid-1980s, people began developing an illness
identified as Eosinophilia-myalgia syndrome, characterized by
intense eosinophilia, a blood condition, and severe muscle
pain, weakness, joint pain, swelling, fever, and skin rash.
Some people died. The link to L-tryptophan was established and
the FDA requested a voluntary recall of the products using L-tryptophan.
Investigation focused on the Showa Denko product as the most
likely culprit, and it was discovered that Showa Denko was
aware, early on, that its product contained unknown
impurities. The presence of these impurities was first noted
by a German customer, which rejected a shipment of food-grade
product. Showa Denko’s own testing confirmed the presence of
the impurities and it attempted to modify its manufacturing
process to address the problem. Unfortunately, the
manufacturing modifications only led to an increase in one
impurity, which is the one associated with the EMS outbreak.
Knowing of the contamination, Showa Denko continued to
manufacture and sell its product.
L-tryptophan was ultimately banned in the U.S. Showa Denko
was shown to have altered its manufacturing by eliminated
several quality control measures, which led to the development
of the impure product. When the contamination was discovered,
the company not only failed to warn customers and the using
public of the presence of the contaminant, it actively
attempted to cover up the problem. The product, while used as
if it was a drug, was marketed as a nutritional supplement,
for the sole purpose of avoiding FDA regulation in the U.S. It
was regulated in Europe. The defective product was not tested
until the German customer rejected a batch due to the
contaminant. That batch was tested, the rejected batch was
then relabeled, and sold for use in animal feed.
The FDA still cannot regulate nutritional supplements.
A. Negligence
The essential elements for a product liability claim based
on negligence include (1) evidence of a standard of care owed
by the reasonably prudent person under the same or similar
circumstances, (2) breach of that duty, (3) injury proximately
caused by breach of the duty, and (4) loss or damage due to
the injury. McCollum v. Grove Mfg. Co., 58 N.C. App. 283, 293
S.E.2d 632, aff'd, 307 N.C. 695, 300 S.E.2d 374 (1983). To
determine what constitutes “reasonable care,” look to the
intended use of the product, foreseeable uses (and misuses),
and potential hazards and risk of injury.
The duty placed on a product manufacturer to exercise
reasonable care extends throughout the entire manufacturing
process, including the obligation to make the product free of
any potentially dangerous defect in manufacturing or design.
Red Hill Hosiery v. Magnetek, Inc., 138 N.C. App. 70, 530
S.E.2d 321 (2000).
Remember that the negligence of the manufacturer must be
one of the proximate causes of injury to the plaintiff. Also,
there is no inference of negligence in design or formulation,
or of a product defect, from the mere fact of a product
malfunction. DeWitt v. Eveready Battery Co., 144 N.C. App.
143, 550 S.E.2d 511 (2001), 355 N.C. 672, 565 S.E.2d 140
(2002).
Proximate cause is that cause which, in a natural and
continuous sequence, unbroken by any new and independent
cause, produces the plaintiff's injuries, and without which
those injuries would not have occurred. Shumaker v. United
States, 714 F. Supp. 154, 162 (MDNC 1988); MCI Telecomm.
Corp., at *13.
The test of proximate cause is whether the risk of
injury, not necessarily in the precise form in which it
actually occurs, is within the reasonable foresight of the
defendant. Proximate cause is ordinarily a question of fact
for the jury, to be solved by the exercise of good common
sense in the consideration of the evidence of each
particular case. It is only in exceptional cases, in which
reasonable minds cannot differ as to foresee-ability of
injury, that a court should decide proximate cause as a
matter of law.
Id. (emphasis added). See also, Griggs, 82 N.C. App. at
133, 345 S.E.2d at 431 ("Causation is an inference of
fact to be drawn from other facts and circumstances. However,
it is only when the facts are all admitted and only one
inference may be drawn from them that the court will declare
whether an act was the proximate cause of an injury. But, that
is rarely the case. Therefore, proximate cause of an injury is
ordinarily a jury question.")(citations omitted).
Foreseeability is an inherent part of the standard of care,
and has been since the earliest court decisions in the product
liability field. If it is “reasonably foreseeable” that a
defect may cause injury, the manufacturer may be held liable
if the defect resulted from negligence. Cases involving
pharmaceutical products and medical devices can present
particularly murky issues of foreseeability, especially with
increasing “off label” use of such products. For example,
the drug Tegretol was originally approved and marketed for use
in preventing seizures. After it was on the market, doctors
began to prescribe it for treatment of bipolar disorder as an
alternative to Lithium.
(1) Types of Negligence Claims
Enhanced Injury or Crashworthiness: North
Carolina has recognized that the manufacturer of a motor
vehicle (and by inference any product) is under a duty to
anticipate foreseeable accidents and to design vehicles in a
manner to avoid unreasonable risk of injury. Warren v.
Colombo, 377 N.C. App. 249, 377 S.E.2d 249 (1989). It is not
necessary that the specific defect cause the underlying
accident, so long as the defect either caused the injury
giving rise to the claim, or made the injury worse than it
otherwise would have been.
The question of whether the contributory negligence of the
plaintiff in the underlying accident would bar his or her
claim may still be undecided in North Carolina. However, in
Miller v. Miller, 273 N.C. 228, 160 S.E.2d 65 (1968), the
Court held that plaintiff’s failure to use a seat belt was
not contributory negligence, since that failure was not a
cause of the underlying collision. The Court stated:
It would be a harsh and unsound rule which would deny all
recovery to the plaintiff, whose mere failure to buckle his
seat belt in no way contributed to the accident, and
exonerate the active tortfeasor but for whose negligence the
plaintiff’s omission would have been harmless.
273 N.C. at 237. The General Assembly later enacted N.C.G.S.
§20-135.2A(d) (1989) which provides that a party’s failure
to wear a seat belt as required by statute may not be
introduced into evidence in any suit for damages for personal
injury.
Query, however, whether N.C.G.S. §99B-4(3) would allow the
defense to raise the claimant’s contributory negligence as a
bar in a crashworthiness case.
Negligent Assembling, Processing or Handling:
A “design defect” is an injury-producing hazard occurring
during or as a result of normal (foreseeable) use of the
product. The defect may result from a number of factors,
including negligent selection of materials, failing to make a
reasonable inspection, or in the manner in which the product
is ultimately put together. A “manufacturing defect” is
the result of a miscarriage in the manufacturing process which
produces an unintended result. Boudreau v. Baughman, 332 N.C.
331, 368 S.E.2d 849 (1988).
“Marketing defects” include not only the manner in
which the product is placed in the stream of commerce, but
also the manner in which the product is labeled. A product may
present a risk of harm if used in a certain way and the lack
of an adequate warning may give rise to a claim if injury
results from the use of the product in that manner.
NCGS §99B-6 codified defenses to claims based on negligent
design and formulation. This section, too, adds little, if
anything, to existing common law. Again, the manufacturer’s
conduct must be unreasonable. The statute provides two options
for proving negligent design or formulation: the manufacturer
unreasonably failed to use a safer alternative design or
formulation, that would prevent or substantially reduce the
risk of injury without substantially impairing the usefulness,
practicality or desirability of the product; or, the design
was so unreasonable that a reasonable person, aware of the
relevant facts, would not use the product.
These two options represent versions of the tests typically
used in design defect cases, the risk vs. utility test and the
consumer expectation test.
Subsection (b) lists seven factors to be considered in
determining whether a manufacturer acted unreasonably. These
are the typical risk/utility considerations encountered in
product liability law and have their genesis in the old
Learned Hand formula: liability depends on whether the burden
of adequate precautions is less than the injury, multiplied by
the probability of its occurrence. United States v. Carroll
Towing Co., 159 F.2d 169, 173 (2d Cir. 1947).
The seven factors are:
- The nature and magnitude of the risks of harm associated
with the design or formulation of the product in light of
the intended and reasonably foreseeable uses,
modifications, or alterations of the product.
- The likely awareness of product users, whether based on
warnings, general knowledge, or otherwise, of those risks
of harm.
- The extent to which the design or formulation conformed
to any applicable government standard that was in effect
when the product left the control of the manufacturer.
- The extent to which the labeling for a prescription or
nonprescription drug approved by the FDA conformed to any
applicable government or private standard that was in
effect when the product left the control of the
manufacturer.
- The utility of the product, including the performance,
safety, and other advantages associated with that design
or formulation.
- The technical, economic, and practical feasibility of
using an alternative design or formulation at the time of
manufacture.
- The nature and magnitude of any foreseeable risks
associated with the alternative design or formulation.
The first two factors deal with risks associated with the
design and the consumer’s awareness of the risks. Factor
number 5 is a utility vs. benefit consideration. Factors 6 and
7 balance feasibility of alternative design against risks of
that alternative design. Factors 3 and 4 represent a deviation
from the standard risk/benefit analysis by allowing an
evaluation of the product in the light of government
standards. This may give greater weight to the defense that a
product conformed to a government standard, even though the
standard itself was minimal, at best.
One problem with the language in option (a)(2) is the use
of “so unreasonable”, which might be taken to mean that
plaintiff must actually prove gross negligence. The statute
could be read so that “some” unreasonableness can be
tolerated. If this is so, if a product was “so
unreasonable” that no consumer, aware of the relevant facts,
would use it, then a manufacturer who is aware of the relevant
facts acts recklessly in selling the product in the first
place. But, if the manufacturer is not aware of the facts,
notwithstanding the unreasonableness of the product, then it
would seem plaintiff must prove that the lack of awareness
amounted to more than mere ordinary negligence. If that is the
case, that is that ordinary negligence alone will not suffice,
then plaintiff’s best option, and the most expensive option,
is proof of a viable and reasonable alternative design.
Compare this to the holding in Barker v. Lull Engineering,
573 P.2d 443 (Cal. 1978), where the court said that “a
product may be found defective in design if plaintiff
establishes that the product failed to perform as safely as an
ordinary consumer would expect when used in an intended or
reasonably foreseeable manner.” 573 P.2d 443, 455-56. This
is consistent with the Restatement of Torts (Second). So,
while the Restatement (Second) view, and that of the Barker
court turn on the consumer’s expectations of safety, North
Carolina’s view is now that the product must be so
unreasonably dangerous that an informed consumer wouldn’t
use it. In other words, the prior law (even in North Carolina)
was that the danger to the consumer must be unexpected, while
the present law is that the danger to the consumer must be
intolerable.
Negligent marketing (misrepresentation, fraud,
deceit): Sometimes, the manner in which a product is
advertised or is otherwise marketed may give rise to
liability. Note, however, that in North Carolina merely
imprinting the retailer’s label on a product will not, in
itself, give rise to liability. Morrison v. Sears, Roebuck
& Co., 80 N.C. App. 224, 341 S.E.2d 40, rev’d on other
grounds, 319 N.C. 298, 354 S.E.2d 495 (1987).
Statements in advertising may create express warranties
(see below).
Sometimes, the marketing of a product can involve elements
of fraud, deceit, or unfair or deceptive trade practices.
Again, with reference to the pedical screw devices used in
spinal fusion surgery involved claims that the
defendant-manufacturers obtained FDA approval of the devices
through fraud. The genesis of this theory is found in Silkwood
v. Kerr-McGee Corp., 464 U.S. 238 ( 1984), the famous Karen
Silkwood case. Silkwood was employed at a facility operated by
defendant and died as a result of exposure to escaping
plutonium. There was a large and highly publicized verdict,
including $10 million in punitive damages, which was in part
predicated upon upon defendant’s fraud and
misrepresentations regarding safety and plutonium exposure.
The 10th Circuit reversed, stating that punitive damages could
not be awarded, as such an award was pre-empted by
governmental regulation of a nuclear facility. The U.S.
Supreme Court took the case and, in a typically fractured set
of opinions, reversed, holding that an award of punitive
damages based on state law was not pre-empted.
In the pedical screw cases, it was alleged that the
defendant device manufacturers, along with consultants hired
for that purpose, defrauded the FDA in order to obtain final
market approval for the devices. It was clear from the
evidence that a fraud on the FDA had taken place, as the
scheme concocted by defendants involved renaming the product
in order for it to be “grandfathered” in by virtue of a
supposed substantial equivalent to a device which was on the
market before the Medical Devices Amendments of 1976 to the
Food, Drug and Cosmetic Act. The manufacturers then set about
securing a market for the product by giving stock options to
various well known spinal surgeons, sponsoring fellowships,
and paying doctors to write positive articles to be submitted
to medical journals, including SPINE, the Journal of the North
American Spine Society. The editors allegedly received stock
options as well and accommodated the manufacturers by printing
favorable articles without disclosing the above and without
peer review.
Relying on Silkwood and Lohr, suits were filed. Ultimately,
the cases wound up in the Supreme Court, which recently
(February, 2001) decided the case, holding that state law
fraud-on-the-FDA claims conflicted with and were therefore
preempted by the FDA’s regulatory authority. Buckman Company
v. Plaintiff’s Legal Committee, 121 S.Ct. 1012 (2001).
Following the Buckman decision, Sandoz Pharmaceutical, a
defendant in an Alabama case, sought to amend its answer and
move for summary judgment in a case which also involved
numerous other claims, including fraud on the medical
community and the adequacy of warnings contained on the FDA
approved package insert. The U.S. District Court agreed that
Buckman preempted the fraud on the FDA claims, but was
unpersuaded that remaining claims of misrepresentation,
suppression, negligence and inadequate warnings were
preempted. The court said:
Although Buckman precludes a plaintiff from seeking damages
because the defendant lied to the FDA, it is something
completely different to contend that plaintiff is precluded
from seeking damages for injuries due to lies to her.
Notwithstanding that information may have been misrepresented
to or concealed from the FDA, once defendant undertook to
misrepresent those facts to plaintiff, or to conceal from
plaintiff facts it was bound to disclose, the plaintiff’s
claim no longer rests simply on the assertion that the agency
was defrauded but on the additional fact that she was
defrauded.
Globetti v. Sandoz Pharmaceutical Corporation, 111
F.Supp.2d 1174 (N.D. Ala. 2000).
From the Globetti decision, it would appear that where a
defendant manufacturer engages in fraud and misrepresentation
in marketing a product, which product is defective and
subsequently causes harm, plaintiff can pursue claims based on
fraudulent misrepresentation to plaintiff, or perhaps to
others such as the medical community, but not if the fraud was
directed against the government agency with regulatory
authority over the product.
Failure to Warn and Inadquate Warnings:
N.C.G.S. §99B-4(1) bars a claim if the use of the product was
contrary to any express and adequate instructions or warnings
“delivered with, appearing on, or attached to” the product
or on its original container or wrapping, if the user knew or
should have known of the existence of the warnings.
In the case of many medical devices, the patient/consumer
rarely sees or has access to any warnings or instructions.
Frequently, even an implanting physician does not see
instructions or warnings that come packaged with the device.
In the case of implants, the device is purchased by the
hospital and unpackaged by hospital staff in preparation for
surgery. Sometimes, indeed frequently, a manufacturer’s
representative is present in the operating room to assist the
surgeon by identifying parts or even by instructing the
surgeon in the use of the devices. Other medical devices also
belong to the hospital and are prepped by hospital staff. The
surgeon is sometimes unaware of these instructions or
warnings.
In such a case, who is the “user” contemplated by the
statute? Is it the implanting physician or the patient? If a
sales rep is in the operating room assisting the surgeon, are
instructions given by the sales rep sufficient to override any
instructions or warnings found in the package insert? The
statute clearly requires not only that any warning or
instruction be both express and adequate, but also that the
“user” have actual or implied knowledge.
In order to establish a claim based on an inadequate
warning, N.C.G.S. §99B-5(a) requires plaintiff to show: (1)
“the manufacturer or seller acted unreasonably in failing to
provide such warning or instruction,” (2) “the failure to
provide adequate warning or instruction was a proximate cause
of the harm for which damages are sought,” and (3) either
section 99B-5(a)(1) or 99B-5(a)(2) has been satisfied”
(emphasis added). N.C.G.S. §99b-5(a)(1) applies if the
manufacturer or seller becomes aware of the need to warn while
the product is still in its control and if the product,
without the warning, creates an unreasonably dangerous
condition that the manufacturer or seller knew or should have
known posed a substantial risk of harm to a reasonably
foreseeable claimant. N.C.G.S. §99B-5(a)(2) deals with
situations in which the manufacturer or seller becomes aware
of the need to warn or instruct after the product has left its
control. In such a case, plaintiff must prove that:
. . . after the product left the control of the
manufacturer or seller, the manufacturer or seller became
aware of, or in the exercise of ordinary care should have
known that the product posed a substantial risk of harm to a
reasonably foreseeable user or consumer and failed to take
reasonable steps to give adequate warning or instruction or
to take other reasonable action under the circumstances.
Evans v. Evans, et al., 153 N.C. App. 54, 569 S.E.2d 303,
311 (2002).
When it comes to package inserts with pharmaceutical
products, the prescribing or administering physician will
almost always testify that he/she did not rely on the
manufacturer’s package inserts or promotional material. If
the doctor is an interested witness (i.e., a co-defendant)
Holley v. Burroughs-Wellcome Co., 74 N.C. App. 736, 330 S.E.2d
228 (1985), aff’d 318 N.C. 352, 348 S.E.2d 772 (1986)
provides that the doctor’s testimony, alone, will not
support summary judgment. Health care providers are
foreseeable users of pharmaceuticals and medical devices and
the manufacturer and seller therefore have a duty to warn
them. Id. at 74 N.C. App. 746. Nor is the physician’s
alleged reliance on his/her own expertise, does not necessary
constitute an intervening cause so as to relieve the
defendants’ of liability. Id. at 747. Thus, the “learned
intermediary” rule may not apply to these situations. Too,
the defendant manufacturers admittedly used the medical
literature, sources relied upon by the physician, to keep the
medical community apprised of the information contained in the
package inserts. The physician may rely, indirectly, on the
adequacy of the warnings found in the inserts without actually
reading them.
Information found in instruction or operating manuals may
give rise to a claim. In Driver v. Burlington Aviation, Inc.,
110 N.C. App. 519, 430 S.E.2d 476 (1993), plaintiffs suffered
injury when their aircraft crashed. They alleged that the
manufacturer produced an instructional manual which gave
inadequate instructions regarding carburetor icing. The Court
of Appeals, in reversing the lower court’s summary judgment,
allowed plaintiffs to proceed on a theory that the injuries
resulted from the negligent failure to provide adequate
warnings.
B. Breach of Warranty
(1) Breach of implied warranty. Warranty is
essentially an element of contract law, and thus deals with
consumer expectations. Because it “sounded in assumpsit,”
it was generally felt before the enactment of Chapter 99B that
contributory negligence (negligence being a creature of torts)
could not be a defense. NCGS §99B-1.2 cleared up any
confusion over that by declaring that the defenses allowed in
Chapter 99B apply to breach of warranty claims (unless
specified otherwise).
The Uniform Commercial Code (Chapter 25 of the General
Statutes) establishes two types of implied warranty: the
implied warranty of merchantability(NCGS §25-2-314) and the
implied warranty of fitness for a particular purpose (NCGS §25-2-315).
Be aware that a merchant may disclaim all implied
warranties. See, NCGS §25-2-316(2) and §25-2-719(1)(A). The
disclaimer must be conspicuous. Muther-Ballenger v. Griffin
Electric Consultants, Inc., 100 N.C. App. 505, 397 S.E.2d 247
(1990).
(a) Merchantability. The implied warranty of
merchantability applies only to a seller of the product, who
is also a merchant with respect to the product. NCGS §25-2-314(1).
This implied warranty applies to both a manufacturer and a
retailer of a product. Gillispie v. Thomasville Coca-Cola
Bottling Co., 17 N.C. App. 545, 195 S.E.2d 45, cert. denied,
283 N.C. 393, 196 S.E.2d 275 (1973). The factors used to
determine whether a product is “merchantable” are listed
in NCGS §25-2-314(2), and merchantability is determined as of
the time of the sale. Bryant v. Adams, 116 N.C. App. 448, 448
S.E.2d 832 (1994), cert. denied, 339 N.C. 736, 454 S.E.2d 647
(1995).
In order to prove breach of implied warranty of
merchantability, plaintiff must prove five things: (1) a
merchant sold the product, (2) the product was not
“merchantable,” at the time of the sale (i.e., was
defective and therefore unfit for the ordinary purpose for
which it was used),
(3) plaintiff was injured by the product, (4) the injury was
proximately caused by the defect in the product, and (5) the
plaintiff gave timely notice to the seller. Reid v. Eckerd
Drugs, Inc., 40 N.C. App. 476, 253 S.E.2d 344, cert. denied,
297 N.C. 612, 257 S.E.2d 219 (1979); Maybank v. S. S. Kresge
Co., 46 N.C. App. 687, 266 S.E.2d 409 (1980), aff’d in part,
rev. in part, 302 N.C. 129, 273 S.E.2d 681 (1981).
The Reid case is particularly useful in a claim based on
breach of the implied warranty of merchantability. Plaintiff
used an aerosol deoderant, purchased from Eckerd’s Drugs,
and then lit a cigarette, igniting the alcohol from the
deoderant, which still hung in the air, and was burned. The
court held that the failure to warn of this potential danger
could render the product unmerchantable. See also, Nicholson
v. American Safety Utility Corp., 124 N.C. App. 59, 476 S.E.2d
672 (1996), rev’d on other grounds, *** N.C. ***, 488 S.E.2d
240 (1997), holding that failure to adequately warn renders a
product unmerchantable.
Reid also provided that compliance with minimum government
standards was not a bar to recovery on a breach of warranty
theory. Query whether that remains the law following the 1995
amendments to Chapter 99B, particularly the provisions of NCGS
§99B-6 which makes the extent to which the design or
formulation conformed to any applicable government standard
that was in effect when the product left the control of the
manufacturer one of the considerations to be considered in
determining whether a manufacturer acted unreasonably.
The decision in Reid also noted that the instructions for
use which accompany a product may be an integral part of the
implied warranty of merchantability.
(b) Implied warranty of fitness. Although the
fitness of the product for the ordinary purposes for which
such products are used is part of the implied warranty of
merchantability, there is a separate statute which creates an
implied warranty of fitness for a particular purpose. NCGS §25-2-315.
This statute states:
“Where the seller at the time of contracting has reason
to know any particular purpose for which the goods are
required and that the buyer is relying on the seller’s
skill or judgment to select or furnish suitable goods, there
is unless ex-cluded or modified under the next section [G.S.
25-2-316] an implied warranty that the goods shall be fit
for such purpose.”
The differences in the two statutes are that the implied
warranty of fitness requires proof that the seller had reason
to know of the particular purpose for which the product was to
be used, and that the buyer relied on the seller’s skill or
judgment in purchasing the product.
A ‘particular purpose’ differs from the ‘ordinary’
purpose for which the product is used in that it envisions a
specific use of the product, as opposed to a general use of
the product. In Tyson v. Ciba-Geigy Corp., 82 N.C. App. 626,
347 S.E.2d 473 (1986), plaintiff farmer consulted
defendant’s salesman about no-till cultivation of soybeans.
The salesman recommended a particular herbicide which, when
used, damaged plaintiff’s crop. The court held this amounted
to a breach of the implied warranty of fitness.
(c) Privity. N.C.G.S. §99B-2(b) eliminated the
privity defense for implied warranty actions against
manufacturers for specific classes of plaintiffs, including:
- buyer
- buyer’s guest
- buyer’s family
- buyers’ family guest, or
- buyer’s employee
A question remains concerning whether lack of privity would
be a defense in a claim against the manufacturer arising out
of an injury proximately caused by a defect in a leased
product.
If the plaintiff does not belong to the specific classes
listed above, horizontal privity may remain a problem. For
example, the court has held that the members of a church
lacked privity, and could not pursue a claim against the
manufacturer, where the minor plaintiff suffered frostbite
when she was locked in a walk-in refrigerator. Also, merely
installing or assembling the product does not make the
installer a “manufacturer” and thus the
installer/assembler has no duty to warn absent actual or
constructive notice that the product is unreasonably
dangerous. Crews v. W.A. Brown & Son, Inc., 106 N.C. App.
324, 416 S.E.2d 924 (1992).
(d) Breach of express warranty. NCGS §25-2-313
establishes the basic principles of express warranty. Express
warranties are created by sellers by:
(a) Any affirmation of fact or promise made by the seller
to the buyer which relates to the goods and becomes part of
the basis of the bargain creates an express warranty that the
goods shall conform to the affirmation or promise.
(b) Any description of the goods which is made part of the
basis of the bargain creates an express warranty that the
goods shall conform to the description.
(c) Any sample or model which is made part of the basis of the
bargain creates an express warranty that the whole of the
goods shall conform to the sample or model.
Mere expressions of value do not create express warranties.
A prima facie case for breach of express warranty was
established in W. A. Davis Realty, Inc. v. Wakelon Agri-Products,
Inc., 84 N.C. App. 97, 351 S.E.2d 816 (1987), in which
plaintiff contracted with defendant for a quantity of Number 2
milling wheat, a commodity with few defective kernels, but an
inferior wheat, containing a high percentage of defective
kernels, was actually delivered. This breached both the
implied warranty of merchantability and the seller’s express
warranty that the product delivered was the Number 2 wheat for
which plaintiff contract
Some language clearly establishes express warranty. Where the
president of defendant corporation wrote a letter in which he
stated “We guarantee our programming with full return and
refund privileges for the software and printer should our
programming not perform as warranted,” the statement created
an express warranty, as a matter of law. Sharrard, McGee &
Co. v. Suz’s Software, Inc., 100 N.C. App. 428, 396 S.E.2d
815 (1990). On the other hand, statements merely expressive of
opinion, or which are merely puffing, do not create express
warranties. A statement that defendant’s product is
“reliable,” for example, was held to be puffing in
Warzynski v. Empire Comfort Systems, 102 N.C. App. 222, 401
S.E.2d 801 (1991). In the Tyson case, cited above, in which
the court found a breach of implied warranty of fitness, a
statement that the herbicide in question would “do a good
job” was mere opinion, and not an express warranty.
Although not specifically stated in NCGS §25-2-313, the
phrase “which is made part of the basis of the bargain”
carries an implication of reliance on the part of the buyer in
order to establish a claim for relief. Reliance was clearly a
requirement under the Uniform Sales Act (supplanted by the UCC)
and many older, pre-UCC, cases turn on the question of
reliance.
In North Carolina, most of the litigation has revolved around
whether certain statements amounted to an express warranty,
without much, if any, discussion of reliance. For that reason,
the degree to which plaintiff will have to prove reliance on
the warranty is unclear in North Carolina.
A case typical in states in which proof of reliance is a key
element in the case is Thomas v. Amway Corp., 488 A.2d 716
(R.I. 1985). Plaintiff bought a bottle of liquid soap,
identified as “Nature’s Shower,” from Amway. After using
the soap, plaintiff developed an ugly and painful rash, which
lasted for over a year. The bottle’s label stated that
Nature’s Shower “leaves skin feeling silky clean,” that
the soap is “gentle for all uses,” and that “everyone in
the family will enjoy the convenience of this versatile body
cleanser.” The trial court directed a verdict for defendant
and was affirmed by the Rhode Island Supreme Court. The court
said: “the plaintiff who claims breach of express warranty
has the burden of proving that the statements or
representations made by the seller induced her to purchase
that product and that she relied upon such statements or
representations.”
Reliance may be inferred from the mere fact of purchase if the
natural tendency of the representations in question is to
induce purchase. Bernick v. Jurden, 306 N.C. 435, 293 S.E.2d
405 (1982).
Some courts apply tests other than reliance. Wisconsin’s
approach is typified in Ewers v. Eisenzopf, 276 N.W.2d 802
(Wis. 1979), in which plaintiff bought a saltwater aquarium
and seventeen fish. Defendant owned a “rock shop” where
plaintiff purchased some decorations for the aquarium. A
friend with the plaintiff asked the store clerk if the
decorations were suitable for a saltwater aquarium and was
assured by the clerk that they were. Within a week all
plaintiff’s expensive fish died. The Wisconsin court at
first stated that the buyer’s reliance was “irrelevant”
to the formation of an express warranty:
The true test is not whether the seller actually intended
to be bound by his statement but rather whether he made an
affirmation of fact the natural tendency of which was to
induce the sale and which did in fact induce it.
citing Pritchard v. Liggett & Myers Tobacco Co., 350
F.2d 479, 487 (3rd Cir. 1965), cert. denied, 382 U.S. 987
(1966). Thus, although reliance was deemed “irrelevant,”
the court stated that the linchpin in the determination is
whether the statement had the “natural tendency” to induce
the buyer.
Other courts apply an intermediate knowledge standard, in
which the plaintiff buyer need not prove reliance on
defendant’s representation, but only that plaintiff read,
heard or saw the statement. For example, in Cipollone v.
Liggett Group, Inc., 893 F.2d 541 (3rd Cir. 1990), aff’d in
part and rev’d in part, 112 S.Ct. 2608 (1992), plaintiffs
sued defendant cigarette manufacturers contending that Mrs.
Cipollone contracted lung cancer from smoking. One of
plaintiffs’ contentions was that the defendants breached an
express warranty contained in various print and broadcast
mediums. The Third Circuit said:
We believe that the most reasonable construction of
section 2-313 is neither Liggett’s reliance theory, which
fails to explain how reliance can be relevant to “what a
seller agreed to sell” or the district court’s purely
objective theory, which fails to explain how an
advertisement that the buyer never even saw becomes part of
the “basis of the bargain.” Instead, we believe the New
Jersey Supreme Court would hold that a plaintiff effectuates
the “basis of the bargain” requirement of section 2-313
by proving that she read, heard, saw, or knew of the
advertisement containing the affirmation of fact or promise.
Id. at 548 n.1.
Some courts apply an objective, nonreliance, test. In Daughtry
v. Ashe, 413 S.E.2d 336 (Va. 1992), the Virginia court
commented on UCC § 2-313. In October, 1985, plaintiff
Daughtry consulted Ashe, a jeweler, about purchasing a $15,000
diamond bracelet for his wife as a gift. Ashe “knew” and
“classified” the diamonds in the bracelet with on of the
highest ratings available for diamonds, “v.v.s.” While
plaintiff was in defendant’s presence, defendant merely
stated that the diamonds were “nice.” Later, Daughtry
telephoned Ashe and agreed to buy the bracelet. An appraisal
certificate, prepared by Ashe, stated the diamonds were of
“H color and v.v.s. quality.” In February, 1989, Daughtry
discovered the diamonds were not of “v.v.s.” quality and
demanded defendant replace the diamonds. Defendant refused.
Daughtry sued. The trial court dismissed plaintiff’s claim
based on express warranty. On appeal, the Virginia Supreme
Court disagreed, stating:
. . . in our opinion, the “part of the basis of the
bargain” language of the Code does not establish a
buyer’s reliance requirement. Instead, this language makes
a seller’s description of the goods that is not his mere
opinion a representation that defines his obligation.
* * *
We conclude from the language used in the Code and the
Official Comment thereto that the drafters of the Uniform
Commercial Code intended to modify the traditional
requirement of buyer reliance on express warranties.
Id. at 339. Clearly, Daughtry did not rely on the
certification that the diamonds were “v.v.s.” quality when
he agreed to purchase the bracelet. Would he have bought it if
the certification described a lesser quality? By the same
token, at the time he agreed to the purchase, he had not been
induced to do so by the certification of quality.
Nevertheless, the certification amounted to a representation
of quality and, in Virginia, an express warranty.
C. Proof of Defect
In cases arising out of alleged breach of warranty, there
is no requirement that plaintiff prove the specific defect, if
the product failed when put to its ordinary and intended use.
Red Hill Hosiery, op cit. See also, Maybank v. Kresge Co., op
cit. holding that the explosion of a flash cube under ordinary
use is not merchantable, even without proof of the specific
defect which caused the explosion.
There are some types of product malfunctions which give rise
to a “fair inference” of a product defect. City of
Thomasville v. Lease-Afex, Inc., 300 N.C. 651, 268 S.E.2d 190
(1980).
Conversely, if the claim arises out of negligence in design or
formulation, there is no inference of product defect from the
mere failure or malfunction of the product. DeWitt v. Eveready
Battery Co., Inc., op cit.
In the context of medical devices, defects fall into one of
these two categories: design defects and manufacturing
defects. Design defects are, in a manner of speaking,
intended. That is, the defect is inherent in the design of the
device. Manufacturing defects, on the other hand, are not
intended. For example, a syringe might be designed to be safe,
but if it is manufactured incorrectly, the syringe would be
said to have a manufacturing defect. A manufacturing defect is
a mistake in the manufacturing process.
A manufacturing defect case presupposes that if the device had
been flawlessly manufactured according to its design, the
injury would not have occurred. Proof in a manufacturing
defect case usually consists, in part, of the manufacturer’s
own design or marketing standards. A design defect case
attacks those very standards as inadequate. Devices are not
defected merely because they may be dangerous. Many risks
cannot be eliminated without also sacrificing features of the
product that make it useful and desirable.
Occasionally, advancing technology can create a legal dilemma
when a company introduces a safer product. Can the new and old
products co-exist in the marketplace, or does the introduction
of the safer model mean that the old product is de facto
defective?
In Hansen v. Baxter Healthcare Corp., 764 N.E.2d 35 (Ill.
2002), the technology at issue was IV tubing sets with
friction pit couplings, and the new technology was IV tubing
sets with Luer-lock connections. The injury occurred in 1991,
and the Luer-lock IV sets had been available for about 20
years at the time. Plaintiff was admitted to the hospital for
stomach ulcer surgery, and had a central venous line started
to allow infusion of blood and other fluids as necessary.
While recovering from the surgery, the friction fit IV
connector on the central line came apart. Plaintiff suffered
an ultimately fatal air embolism. The estate sued the
hospital, the doctors, and Baxter Healthcare, the manufacturer
of the tubing. There was no evidence of a manufacturing
defect, i.e., the connector was made correctly, it just came
apart due to patient movement or from some other external
movement. Plaintiff settled with the hospital and doctor and
went to trial against Baxter Healthcare, claiming:
- the tubing was unreasonably dangerous because it was
designed, manufactured, and sold without a Luer-lock
connection;
- the friction-fit connection failed when the product was
used in a reasonably foreseeable manner; and
- Baxter failed to warn of the likelihood of unintentional
disconnection and the need to use tubing equipped with the
Luer-locking device.
The jury found for plaintiff. The intermediate appellate
court found that the evidence was sufficient to justify the
verdict based on the defective design theory, but that the
verdict could not be sustained on the claim of failure to
warn. Since the verdict was a “general” verdict, the court
refused to disturb it and allowed it to stand. Baxter appealed
to the Illinois Supreme Court, arguing that the Court of
Appeals erred in finding that the verdict could be supported
by the defective design theory. Plaintiff cross-appealed,
arguing that the court should reverse the lower court’s
holding that Baxter had no duty to warn the medical profession
of dangers inherent in the product.
While plaintiff had experts to support its theory, the most
effective testimony came from defendant’s own personnel,
called as adverse witnesses. These witnesses confirmed that
Baxter was aware at the time of the injury that friction-fit
connectors sometimes failed due to patient movement, causing
air embolisms in central line applications. They conceded that
friction-fit connectors were inadequate for central line use
and that, in such instances, medical professionals should use
Luer-locks. Further, Baxter salesmen were not encouraged to
recommend the Luer-locks for central line applications. Baxter
simply made both products available to its customers.
Baxter’s chief engineer in charge of the IV product line
testified that friction-fit connectors could accidentally
disconnect, resulting in air embolisms. He actually
recommended using the Luer-locks in central line applications.
He added, however, that Baxter did not advise hospitals to use
one product over the other, and that Baxter had not developed
Luer-locks to prevent accidental disconnections or to increase
patient safety. Rather, the Luer-lock mechanism was a
competitive response to industry demands. He admitted that
adding Luer-locks to all connectors was technically feasible
and would add between 3¢ and 5¢ to the cost of each unit.
Plaintiff used Baxter’s patent application to rebut the
testimony that Luer-locks were not developed for safety
reasons. In the patent application, Baxter stated that the
Luer-lock was designed to “overcome the problem of
inadvertent disconnection that occurs with friction-fit
connectors.”
This evidence that the Luer-locks were safer, and this safety
was critical for central lines, was the heart of plaintiff’s
case. Plaintiff argued that Baxter had a duty to warn about
the dangers of using the friction-fit connectors and, more
fundamentally, since the incremental cost of the safer product
was so low, and since it posed no additional risks to offset
its benefits, they rendered the friction-fit connectors
defective and therefore such connectors should no longer be
marketed. Baxter raised the learned intermediary defense, in
that the medical community was aware of the risks of friction
fittings disconnecting since there were ample medical
literature and studies on these risks. It was the hospital’s
negligence, said Baxter, and not Baxter’s failure to warn,
that resulted in the tragedy.
The appeals court found that plaintiff’s claim was
essentially that the friction fitting was defective because it
could and did come apart due to patient movement. Reviewing
the standards fro design defect claims in Illinois, the court
focused on the traditional key to design defect cases - the
alternative design. Here, there was no need to hypothesize
about alternative designs, since the same manufacturer sold an
alternative inexpensive design. Based on this, the court
concluded that using either the consumer expectations or
risk/benefit, the jury could properly find that friction fit
connectors were rendered defective by the Luer-lock
connectors.
The Supreme Court disagreed with the appellate court on the
duty to warn claim. It found that there was sufficient
conflicting testimony on what the defendant medical care
providers, and the medical care providers in general knew,
about the risks of disconnection that the issue could properly
go to the jury. In considering the design defect claim, the
court analyzed Baxter’s claim that it was improper to use a
consumer expectations test for a medical device. It found that
such connectors were purchased and used by nurses, without
physician supervision. This non-physician use of this medical
device was properly judged a consumer expectations test,
rather than a physician’s expectations test. The court also
disagreed with Baxter’s contention that the risk/benefit
test should not apply because the product was simple and the
risks easily appreciated and avoided. The Court referred to
the patent application claims that the Luer-locks were needed
for patient safety and thus the product was intended as a
safety device. If such a device were in fact needed, and if
the device was cheap and posed no additional risk, if it was
not in universal use it could be assumed that the dangers were
not obvious and thus the risk/benefit calculation was merited.
Is it legally justifiable to continue selling a less safe
product when it has been superseded by a safer product with no
significant disadvantages? More generally, is is legally
justifiable to sell products with important safety devices as
options?
D. Potential Defendants
Potential defendants may include:
- Pharmaceutical company who manufactured and marketed a
medication
- Medical device manufacturer
- Physician prescribing medication or use of medical
device
- Physician performing medical/surgical procedure
involving the device
- Distributor of medication
- Nurse or other health care professional administering
the medication
- Hospital employing the physician or other health care
professional
- Hospital which allows the use of an experimental device
without compliance with applicable regulations
If a product fails, causing injury, the manufacturer is
usually the first suspect. However, discovering the identity
of the actual manufacturer may be difficult. Many large
retailers contract with several manufacturers to produce a
product which is sold as the retailer’s own brand. If a
seller holds itself out to the public as the manufacturer of
the product, it cannot use N.C.G.S. §99B-2(a) as a defense,
but will be treated as a manufacturer. Warzinsky v. Empire
Comfort System, op cit. However, in Morrison v. Sears, Roebuck
& Co., 80 N.C. App. 224, 341 S.E.2d 40, rev’d on other
grounds, 319 N.C. 298, 354 S.E.2d 495 (1987) the Court held
that imprinting the retailer’s trademark in a shoe was
insufficient to bring the retailer within the §99-B
definition of manufacturer.
The seller may also be a suspect, but §99-B makes it
difficult to pursue the seller on most grounds. In Jones v.
GMRI, Inc., et al., 144 N.C. App. 558, 551 S.E.2d 867 (2001),
plaintiff was injured when she bit into a meatball at an Olive
Garden restaurant. Suit was filed against the owner or
fanchisee of the restaurant and the company which allegedly
supplied or manufactured the meatball. The restaurant could
not (or would not) produce an incident report which allegedly
identified the supplier of the meatball so the suspected
manufacturer was dismissed due to lack of evidence. The
defendant’s uncontradicted evidence showed that the
meatballs came to it in sealed plastic bags and it did not
slice or cut into the meatballs or otherwise inspect them
before dumping them into tomato sauce, heating and serving.
The jury found that defendant, while having breached the
implied warranty of merchantability, nevertheless did not have
a reasonable opportunity to inspect the food in a way which
would have revealed the defect and, therefore, awarded no
damages. The Court noted that plaintiff produced no evidence
tending to show that the Olive Garden was the “apparent
manufacturer.”
Even had the restaurant inspected the meatballs, absent proof
that the inspection was negligently conducted, such inspection
does not convert the seller to a manufacturer. Nicholson v.
American Safety Utility, Corp., op cit.
V. CONCLUSION
Any situation involving injuries caused by drugs or
defective medical devices should be evaluated thoroughly and
critically for a potential legal claim. These claims often
involve other theories of recovery, such as medical
negligence. The frequently devastating nature of the damages
inflicted justify the kind of investigation necessary to
evaluate the claim. The obstacles are many and sometimes
harsh, but success can be very gratifying.
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