United States: Turning A Lemon Into Lemonade

Last Updated: November 7 2017
Article by Michelle Yeary

This post is from the non-Reed Smith side of the blog.

Way back at the start of this year, we posted about a great preemption win on express warranty. Well, that case has worked its way through the appellate process and the Fifth Circuit unfortunately has reversed the decision. But, we aren't going to rage against the decision as you might expect us to. We aren't going to laud it either. Rather, we are taking the decision for what it is – the narrowest of preemption escapes based on the unusually detailed nature of what the manufacturer actually said in the alleged warranty. Good luck to plaintiffs trying to use this decision elsewhere. For 99.9% of express warranty cases, this case's rationale actually is a positive result.

The facts of the case are straightforward. Plaintiff alleged that a neurostimulator implanted in his spine stopped working after one and a half years, had to be explanted, and that he suffered complications from the revision surgery. Wildman v. Medtronic, Inc., 2017 U.S. App. LEXIS 21655 at *2-3 (5th Cir. Oct. 31, 2017). Plaintiff's only claim was that the defendant breached its express warranty guaranteeing the device for 9 years. The alleged warranty language is important. The defendant's website said that in addition to battery life, "many other factors and components are involved in determining the overall longevity of an implanted medical device." And that based on extensive testing of many components, not just the battery, defendant had "confidence that [its] device is reliable for 9 years." Id. at *4. Plaintiff alleged these statements were not reviewed or approved by the FDA. The device's reference manual did undergo FDA review and approval as part of the PMA process. The manual contains an approved FDA statement that the device's "battery life" was 9 years. Id. at *5. It is the distinction between "battery life" and "device life" that is at the crux of the court's decision.

Why is that so important? Because that Fifth Circuit stated definitively that "when a claim challenges a representation the FDA blessed in the approval process, it is preempted." Id. at *8. Could not be any clearer. Hence the reason this decision is probably more beneficial to defendants generally than to plaintiffs. Because the manufacturer's website drew a distinction between the battery and the rest of the components, the court found the language was guaranteeing the reliability of the latter but that the FDA had only evaluated the former. Id. at *9. A verdict that the defendant's representation was misleading or untruthful would therefore not run counter to any safety finding by the FDA. Instead, it would parallel federal regulations prohibiting false or misleading statements about medical devices.  Id. at *10-12.

The Fifth Circuit goes on to point out that where an express warranty claim survives preemption, it also still has to meet the TwIqbal pleadings standards. Therefore, an express warranty claim based on "vague allegations about representations . . . made to doctors or consumers" isn't enough. Id. at *13. Another defense-favorable holding emphasizing that Wildman is an aberration.

Even though the case is being remanded, plaintiff hasn't proven anything yet. Far from it. As the court points out, to prove his express warranty claim under Texas law is going to require both reliance and notice. Id. at *8n.3. It's also going to require proof that something other than the battery caused the device to fail. Id. at *13-14. Plaintiff already amended his complaint to change from his more specific allegation that the device failed due to the battery to a more general allegation that the "neurostimulator did not conform to a nine-year device life." Id. at *5. But does that general allegation meet the mark on the TwIqbal yardstick? The only claim that escapes preemption is a narrow one – did defendant breach a warranty about the longevity of some component other than the battery. On remand, the first issue for the district court is to determine whether plaintiff's complaint sufficiently alleges facts to support such a claim. Again we say good luck on that.

The case may be, for the moment, revitalized, but the opinion bringing it back to life had enough juice worth the squeeze for defendants.

This article is presented for informational purposes only and is not intended to constitute legal advice.

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