United States: 510k Clearance Equals No Punitive Damages In Arizona

Last Updated: August 9 2019
Article by Steven Boranian

We have always thought that regulatory approval or clearance of a drug or medical device should weigh heavily against punitive damages, or even preclude punitive damages altogether. An Arizona statute says exactly that, and now a trial court in Phoenix has applied that statute to dismiss punitive damages in a case involving a medical device cleared through the 510k Premarket Notification process. This is a significant ruling because the majority of implanted medical devices reach the market under section 510k rather than the more extensive Premarket Approval process.

The case is McMahill v. C.R. Bard, Inc., No. CV 2017-000927 (Ariz. Sup. Ct. July 23, 2019), and while the order is a mixed bag overall, the holding on punitive damages is very helpful. The plaintiff was treated with the defendant manufacturer's inferior vena cava filter and experienced filter fracture, which is a known and warned-of risk for all venous filtration devices. Slip op. at 2. The defendant's motion for summary judgment was only partly successful. The court declined to find that the filter was "unavoidably unsafe" as a matter of law under comment k to section 402A of the Restatement (Second) of Torts and denied summary judgment on the design defect claim. Id. at 2-3.

The court also denied summary judgment on the failure-to-warn claim, even though it was undisputed that the implanting physician did not read the device's instructions for use. Id. at 4-5. On the warnings claim, the court just missed the point. The court reasoned that it was disputed whether the physician would have used the defendant's device had he received additional information about filter fracture. But it would not have made a difference had the defendant provided additional information in the instructions for use because the physician did not read them. That is a failure of warnings causation. It seems as though the court lost sight of the fact that the plaintiff bears the burden of proof.

The express warranty claim went by the boards because there was no evidence that the plaintiff received any representations about the filter before it was implanted and also for lack of privity. Id. at 5-6.

The order's highlight is the grant of summary judgment on punitive damages. Arizona law provides that a manufacturer or seller of a product is not liable for exemplary or punitive damages if:

The product alleged to have caused the harm was designed, manufactured, packaged, labeled, sold or represented in relevant and material respects according to the terms of an approval, conditional approval, clearance, license or similar determination of a government agency.

Ariz. Rev. Stat. § 12-689 (emphasis added). This is pretty broad protection, and it expressly includes the term "clearance." That takes care of the main argument that plaintiffs level in cases involving devices "cleared" under the 510k process, rather than "approved" under the Premarket Approval process. That overblown distinction has had an outsized impact ever since the Supreme Court's outdated opinion in Medtronic v. Lohr, 518 U.S. 470 (1996), including with regard to federal preemption and more lately in connection with the admissibility of evidence of the section 510k regulatory pathway.

The Arizona statute does not provide any leeway: "Here, undisputed evidence shows that the [defendant's] filter received clearance from the FDA. As a result, the statute bars plaintiff claim for punitive damages." McMahill, at 6.

The plaintiff tried three attacks on the statute, none of them successful. First, the plaintiff argued that the statute was enacted after the plaintiff's filter was implanted. But that was not true, and the plaintiff's right of action did not vest until he filed his lawsuit in any event. Id.

Second, the plaintiff argued that the statute violated multiple provisions of the Arizona Constitution. But one of the cited constitutional provisions applied only to the right "to recover damages for injuries," and punitive damages are not awarded to compensate for injuries. Id. They are awarded "to punish the wrongdoer and deter others." Id. The statute is also not an impermissible "special law," nor does it unconstitutionally grant protection to a certain class of defendants. This last point appears to address equal protection under the laws, as the court couched its ruling in terms of the legislature's basis for enacting the law: "Here, the legislature has made a determination intended to encourage the development of medical devices in Arizona." Id.

Finally, the plaintiff argued that the statute did not apply because the manufacturer "knowingly violated a material and relevant reporting requirement." Id at 7. This sounds to us like a "fraud on the FDA" claim that is preempted under Buckman Co. v. Plaintiffs' Legal Comm., 531 U.S. 341 (2001). But the court did not even need to get to preemption because the Arizona statute expressly addresses this situation: Withholding information from the government or violating reporting requirements avoid Arizona's statutory protection against punitive damages only if the government has found a violation. Id. There was no evidence that the FDA ever "found" that "material information related to the [defendant's] filter was knowingly unreported." Id.

Many thanks to the attorneys at Nelson Mullins who brought this order to our attention.

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

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