Michael v. Shiley, Inc. ( 1995 )

Opinions of the United
1995 Decisions States Court of Appeals
for the Third Circuit
2-7-1995
Michael v Shiley, Inc.
Precedential or Non-Precedential:
Docket 94-1496
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UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
----------
No. 94-1496
----------
NINA MICHAEL,
Appellant
v.
SHILEY, INC.;
HOSPITAL PRODUCTS GROUP, INC.,
(FORMERLY HOWMEDICA, INC.);
PFIZER, INC.
----------
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil No. 93-1729)
----------
Argued Monday, October 24, 1994
BEFORE: STAPLETON, HUTCHINSON and GARTH, Circuit Judges
----------
(Opinion filed February 7, l995)
----------
Gary Green (Argued)
Sidkoff, Pincus & Green
530 Walnut Street
Philadelphia, Pennsylvania 19106
Morton B. Wapner
David Kuritz
Wapner, Newman & Wigrizer
115 South 21st Street
Philadelphia, Pennsylvania 19103
Attorneys for Appellant
David Klingsberg (Argued)
Maris Veidemanis
Kaye, Scholer, Fierman, Hays &
Handler
425 Park Avenue
New York, New York 10022
John W. Frazier, IV
James A. Willhite, Jr.
Montgomery, McCracken, Walker &
Rhoads
Three Parkway, 20th Floor
Philadelphia, Pennsylvania 19102
Attorneys for Appellees
----------
OPINION OF THE COURT
----------
GARTH, Circuit Judge:
This appeal requires that we determine how the Medical
Devices Amendments of 1976 which amended the Food, Drug and
Cosmetics Act of 1938, 21 U.S.C. § 360-360rr, allocates authority
between the states and the Food and Drug Administration. To be
precise, we must decide whether 21 U.S.C. § 360k pre-empts Nina
Michael's state law causes of action for negligent manufacture
and design, strict product liability, breach of the implied
warranty of merchantability, breach of an express warranty, and
common law fraud against Shiley Inc., the manufacturer of the
Bjork-Shiley Heart Valve.
Applying the express pre-emption analysis defined by
Cipollone v. Liggett Group Inc., 112 S. Ct. 2608 (1992), we
conclude that § 360k pre-empts Michael's cause of action for
negligence (both manufacturing and design), strict product
liability, and breach of the implied warranty of merchantability.
We also hold that Michael's complaint to the extent that it
relies on fraud perpetrated by Shiley on the FDA is pre-empted.
Finally, we hold that § 360k does not preclude Michael from
pursuing common law causes of action for express warranty and for
fraud to the extent that the fraud arises from Shiley's efforts
to promote its product through letters to doctors and
advertisements in medical journals.
Accordingly, while we will affirm the district court's pre-
emption rulings as to Michael's negligence, strict product
liability, and implied warranty claims, we will reverse the
district court's summary judgment to the extent that it entered
judgment against Michael on her express warranty and fraud
claims.
I
A.
Nina Michael's claims arise from the discovery in the past
fifteen years that the outlet strut of the Bjork-Shiley 60 Degree
Convexo-Concave Disc Heart Valve ("Shiley valve"), which was
designed and manufactured by Shiley Inc., fractures in
approximately one percent of the patients who received a Shiley
implant. App. 200. These failures result from a weak strut
mechanism and from poor manufacturing standards at Shiley's
facilities. A strut failure leads inevitably to death or serious
injury.
B.
The Shiley valve was one of the first medical devices to be
approved under the 1976 Medical Device Amendments to the Food
Drug and Cosmetics Act of 1938 (the "MDA"), a comprehensive
extension of the FDA's authority beyond medical drug
manufacturers to medical device manufacturers. Pub. L. No. 94-
295, 90 Stat. 539 (1976). Congress passed the Amendments in
response to the harm caused by the Dalkon Shield, an unregulated
medical device which resulted in serious injury to a large number
of women.1 Sen. Rep. No. 33, 94th Cong., 1st Sess. 2 reprinted
in 1976 U.S. Code Cong. & Admin. News 1070, 1071. Through the
MDA, Congress hoped "to assure the reasonable safety and
effectiveness of medical devices intended for human use." H.
Conf. Rep. No. 1090, 94th Cong., 1st Sess. 51 reprinted in 1976
U.S. Code Cong. & Admin. News 1103, 1103. To do so, it granted
the FDA new broad powers to regulate medical devices, which
powers are based on three statutory classifications.
Class I devices, such as tongue depressors, are devices
which generally pose little or no threat to public health and are
subject only to general controls on manufacturing. See 21 U.S.C.
§ 360c(a)(1)(A). Class II devices, such as oxygen masks, pose a
slightly greater risk of injury to patients, and accordingly, the
MDA subjects them to performance standards, post market
1
. For a history of the harm which resulted from the Dalkon
Shield, see In re A.H. Robins Co., 880 F.2d 709, 710-12 (4th
Cir.), cert. denied sub nom, Anderson v. Aetna Casualty and
Surety Co., 493 U.S. 959 (1989).
surveillance, guidelines for use and other appropriate controls.
See id § 360c(a)(1)(B). Class III devices, such as the Shiley
valve, include all devices which are to be implanted into people,
which are used to sustain life, or which pose a potentially
unreasonable risk of injury. See id. § 360c(a)(1)(C).
Class III devices may not be marketed or sold until the
sponsoring company obtains Premarket Approval (PMA) from the FDA.
Id. § 360e. To obtain a PMA, the sponsor must submit "all
information, published or known to or which should reasonably be
known to the applicant, concerning investigations which have been
made to show whether or not such device is safe and effective,"
id. § 360e(c)(1)(A), a statement of the intended use of the
product, a description of the expected manufacturing processes
for the device, and any other information requested by the FDA.
Id. § 360e(c)(1)(B)-(G). After review by a panel of medical
experts, the FDA may approve the PMA.
The FDA retains continuing oversight over approved Class III
devices. It requires manufacturers to report any deaths or
serious injuries which result from the use of the product. See
21 C.F.R. § 803.24(c). It may require warning or instructions on
the labels which accompany the product. 21 C.F.R. § 814.82.
Finally, the FDA regulates the manufacture of the devices through
the imposition of good manufacturing processes. 21 C.F.R.
§ 820.100-820.101. The only remedial power granted to the FDA is
the power to require the sponsor of the product to notify the
public of a newly discovered danger posed by the product, order
the company to replace the device, or order the company to refund
the purchase price to the patient. The FDA can take these
actions only if it determines that the device presents an
unreasonable risk of substantial harm to the public. 21 U.S.C.
§ 360h(a). The act does not permit the FDA to require companies
to compensate victims for their medical expenses or for the pain
and suffering resulting from a device failure.
C.
Shortly after the passage of the MDA, Shiley applied for
Premarket Approval (PMA) to market the Shiley valve. At the
time, the FDA's procedures for PMA applications had not been
finalized, see 51 Fed. Reg. 26364 (July 22, 1986) (defining PMA
procedures), and thus the Shiley application did not receive the
same organized and comprehensive evaluation that might be
expected today. Sen. Comm. on Energy & Commerce, 101st Cong., 2d
Sess., The Bjork-Shiley Valve: Earn as You Learn 20-22 (Comm.
Print 1990) [hereinafter Energy & Commerce Report]. For example,
evidence of the first strut fracture was belatedly brought to the
FDA's attention and explained as an "isolated incident" even
though it was unexplained at the time of the application. Id. at
21. Further, Shiley made claims, based on unsubstantiated data,
that reduced heart complications would result from Shiley valve
implants.2 Id. at 22-24. Despite these deficiencies, the FDA
2
. Specifically, Shiley claimed a reduction in the rate of
thromboembolism, the development of potentially dangerous blood
clots at the valve's location. The FDA later determined that
there was no improvement in the rates of thromboembolism with the
new valve and that this information, if known at the time the PMA
approved the PMA on April 27, 1979, without a recorded vote. Id.
at 22.
Between 1979 and 1983, the struts which hold the mechanical
valves in place in 73 Shiley valves fractured, id at 28, leading
to the death of most of the implanted individuals. These
fractures were the result of both the valve's design and poor
manufacturing processes. In particular, the valves suffered from
poor welding and poor quality control. See id. at 5-14; App.
461, 615-16, 623-25. During this period, Shiley sent a set of
letters to doctors and to the FDA reassuring them that these
incidents did not compromise the integrity, safety, or
effectiveness of the device. Energy & Commerce Report at 14-17.
Despite a redesign of the manufacturing process, continuing strut
fractures forced Shiley to recall those valves which had not been
implanted in 1980, 1982, and 1983. Because of continuing
problems with valve failures, Shiley recalled its larger size
valves and ceased production of those sizes in October 1985.
Finally, on November 24, 1986, Shiley withdrew all its remaining
valves from the market and ceased production of any heart valves.
On March 21, 1990, Shiley asked the FDA to withdraw its Premarket
Approval. To date, approximately 501 Shiley valves have
fractured, resulting in 347 deaths. App. 691.
D.
(..continued)
was filed, would likely have prevented FDA approval. App. 766-
68.
These events first affected Nina Michael in 1981. In that
year, Michael was diagnosed with a congenital defect with her
mitral heart valve, which controls of the flow of blood between
the left atrium and the left ventricle. Because the defect was
potentially fatal, Michael underwent surgery to have her natural
heart valve replaced with the Shiley valve on November 24, 1982.
The surgery was successful and the valve functioned
properly. The valve implanted in Michael came with the following
disclosure under the heading "Disclaimer of Warranties":
Shiley warrants that reasonable care has been used in
the manufacture of this device. This warranty is
exclusive and in lieu of all other warranties, whether
express, implied, written or oral.
App. 680.
In the late 1980s and early 1990s, Michael became aware of
the strut fracture problem through media sources and her doctor.
Research disclosed that her class of valves was among the Shiley
valves with the highest rate of failure. It was estimated that
there was a two percent chance per year that a catastrophic valve
failure would occur in the Shiley valve implanted in Michael.
These disclosures caused Michael significant anxiety, which
resulted in sleeplessness and other emotional and physical
symptoms.
After consultations with her physicians, Michael had the
Shiley valve surgically removed and replaced with a different
valve in June 1992. The surgeon visually examined her explanted
valve and found no visible defects. The valve was later
discarded.
In March 1993, Michael filed a complaint in the Philadelphia
Court of Common Pleas, alleging state law claims of negligence,
strict product liability, breach of implied warranties, breach of
express warranties, and fraud. App. 10-29. Her complaint named
Shiley Inc., the maker of the Shiley valve; Pfizer Inc., Shiley's
corporate parent; and Hospital Products Group Inc., another
corporate owner of Shiley. Shiley removed the case to the
Eastern District of Pennsylvania on the basis of diversity
jurisdiction. App. 31. On August 16, 1993, Shiley filed two
summary judgment motions. One motion alleged that all claims
except the express warranty claim were pre-empted. The second
motion alleged that Michael had failed to raise a genuine issue
of material fact to support her claims.
Through orders dated February 25, 1994, March 31, 1994, and
April 7, 1994, the district court granted judgment on all the
claims against Michael and in favor of Shiley. It granted
judgment on the negligence, strict product liability, and implied
warranty claims on both pre-emption and traditional Rule 56
grounds. See Fed. R. Civ. P. 56(c). It granted judgment on the
express warranty claim for failure to raise a genuine issue of
material fact. Finally, it granted judgment on the fraud claim
solely because it was pre-empted.
Michael filed a timely notice of appeal.
II.
We exercise plenary review of the district court's grant of
summary judgment and apply the same test that the district court
should have applied initially. Goodman v. Mead Johnson & Co.,
534 F.2d 566, 573 (3d Cir. 1976), cert. denied, 429 U.S. 1038
(1977). Thus, we will affirm only if Michael has failed to raise
a genuine issue of material fact and Shiley is entitled to a
judgment as a matter of law. Id. In examining the record, we
give the nonmoving party the benefit of all reasonable inferences
from the record. Gray v. York Newspapers, Inc., 957 F.2d 1070,
1078 (3d Cir. 1992). We exercise plenary review over the
district court's pre-emption determination, as it is a question
of law. Travitz v. Northeast Dep't ILGWU Health & Welfare Fund,
13 F.3d 704, 708 (3d Cir.), cert. denied, 114 S. Ct. 2165 (1994).
We also exercise plenary review over the district court's
application of state law. Salve Regina College v. Russell, 499
U.S. 225, 231 (1991).
III
A.
The parties' core dispute is whether, or to what extent, the
MDA pre-empts Michael's state common law causes of action.
Article VI of the Constitution provides that the laws of the
United States "shall be the supreme Law of the Land; . . . any
Thing in the Constitution or Laws of any State to the Contrary
notwithstanding." U.S. Const. art. VI, cl. 2. By virtue of this
grant of federal power, Congress can through a sufficiently clear
expression of its intent displace state law. Cipollone v.
Liggett Group, Inc., 112 S. Ct. 2608, 2617 (1992);3 CSX Transp.
Inc. v. Easterwood, 113 S. Ct. 1732, 1737 (1993) ("[P]re-emption
will not lie unless it is `the clear and manifest purpose of
Congress.'") (quoting Rice v. Sante Fe Elevator Corp., 331 U.S.
218, 230 (1947)). "In the interest of avoiding unintended
encroachment on the authority of the States, however, a court
interpreting a federal statute pertaining to a subject
traditionally governed by state law will be reluctant to find
pre-emption." CSX Transp. Inc., 113 S. Ct. at 1737.
Pre-emption may arise explicitly from the statute's language
or implicitly from the statute's structure and purpose. Morales
v. Trans World Airlines, Inc., 112 S. Ct. 2031, 2036 (1992).
Nonetheless, "[w]hen Congress has considered the issue of pre-
emption and has included in the enacted legislation a provision
explicitly addressing that issue, and when that provision
provides a reliable indicium of congressional intent with respect
to state authority, there is no need to infer congressional
intent to pre-empt state laws from the substantive provisions of
legislation." Cipollone, 112 S. Ct. at 2618 (quotations and
citations omitted).
3
. We recognize that Cipollone was decided by a plurality of the
Supreme Court. We are satisfied that the pre-emption discussion
and holding represents the Court's current pre-emption analysis.
See, e.g., American Airlines, Inc. v. Wolens, 1995 WL 15047 (U.S.
1995); Gile v. Optical Radiation Corp., 22 F.3d 540, 542 (3d Cir.
1994); Weber v. Heaney, 995 F.2d 872, 875 (8th Cir. 1993);
Cleveland v. Piper Aircraft Corp., 985 F.2d 1438, 1443 (10th
Cir.), cert. denied, 114 S. Ct. 291 (1993).
Because Shiley relies upon the express pre-emptive scope of
21 U.S.C. § 360k, our task is primarily one of statutory
construction. Id. at 2621. We must give the language of § 360k
"a fair but narrow reading" which will give effect to Congress'
purpose without undermining "the strong presumption against pre-
emption." Id.
Cipollone illustrates the manner in which we are to apply
these doctrines. In Cipollone, the Supreme Court considered
whether the Cigarette Labeling and Advertising Act of 1965 or the
Public Health Cigarette Smoking Act of 1969 pre-empted Rose
Cipollone's state common law causes of action for failure to
warn, breach of express warranty, fraudulent misrepresentation,
and conspiracy claims. The Court concluded that the limited
language of the 1965 act did not prevent a state claimant from
recovering damages in a state common law cause of action not
otherwise pre-empted. 112 S. Ct. at 2619.
The Court turned to the broader pre-emption provision of the
1965 Act which stated "[n]o requirement or prohibition based on
smoking and health shall be imposed under State law with respect
to the advertising or promotion of cigarettes . . . ." Id. at
2617. Applying a "fair but narrow" reading of this provision,
the Court held that Cipollone could not maintain a failure to
warn claim because the statute prevented states from requiring
any warning beyond the federally mandated statement "CAUTION:
CIGARETTE SMOKING IS DANGEROUS TO YOUR HEALTH." Id. at 2621-22.
In contrast, the Court concluded that Cipollone's express
warranty and fraud claims could proceed. The contract claim was
not "imposed under State law" and the fraud claim did not impose
a requirement "with respect to the advertising or promotion of
cigarettes." Id. at 2622-24.
B.
Statutory interpretation begins with an analysis of the
statute's language. Section 360k(a) provides:
Except as provided in subsection (b) of this
section, no 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 chapter
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.
This section pre-empts only state imposed requirements. Further,
it pre-empts those requirements only when they differ from or add
to a previously established FDA requirement and relate to the
safety or efficacy of the regulated device. When a state law
differs from or adds to a FDA requirement and when a state law
relates to the safety or effectiveness of a device approved by
the FDA, the state law is pre-empted. Conversely, when a state
law neither imposes requirements nor differs from or adds to a
FDA requirement nor relates to the safety or effectiveness of the
device or to any other matter included in a FDA requirement, the
state law is not pre-empted by § 360k.
C.
We first consider Michael's two threshold arguments: (1)
that state common law does not impose "requirements" and (2) that
the FDA imposed no "requirements" on Shiley. Either would
prevent the MDA from pre-empting any of her claims.
An extended discussion of whether the state common law
imposes requirements under the MDA is unnecessary.4 We have
already determined that the term "requirements" as used in § 360k
encompasses state common law claims. Gile v. Optical Radiation
Corp., 22 F.3d 540, 541-42 (3d Cir.), cert denied, 115 S. Ct. 429
(1994). In Gile, we followed the Supreme Court in its
interpretation of the term "requirement" as used in § 5(b) of the
Public Health Cigarette Smoking Act of 1969. There the Court
"reject[ed Cipollone's] argument that the phrase `requirement or
4
. Michael points in particular to the FDA regulations which
interpret § 360k. See 21 C.F.R. § 808.1. 21 C.F.R.
§ 808.1(d)(1) states:
[Section 360k(a)] does not preempt State or local
requirements of general applicability where the purpose
of the requirement relates either to other products in
addition to devices (e.g. requirements such as general
electrical codes, and the Uniform Commercial Code
(warranty of fitness)), or to unfair trade practices in
which the requirements are not limited to devices.
Despite the reference in 21 C.F.R. § 808.1(d)(1) to laws of
general applicability, we hold that the statutory language of
§ 360k preempts Michael's claims for breach of the implied
warranties of merchantability and fitness as explained in section
IV. A. infra.
We express no view on the validity of § 808.1(d)(1)
because Shiley disclaimed all implied warranties as it was
entitled to do under the Code.
prohibition' limits the 1969 Act's pre-emptive scope to positive
enactments by legislatures and agencies." Cipollone, 112 S. Ct.
at 2620.
D.
Michael next argues that, while we could normally conclude
that the FDA had imposed requirements on a manufacturer, the
unique facts of this case preclude such a determination.
Michael's argument is based on failings in the Premarket Approval
and oversight process which arose because Shiley's heart valve
was among the first mechanical devices approved under the MDA.
According to Michael, these failings kept the FDA from imposing
any requirements on Shiley.
Michael claims that the lack of FDA requirements is proved
by the absence of any specific regulations which govern heart
valves as compared with the other medical devices. Cf. 21 C.F.R.
§ 813.1 - 813.170 (regulating the testing and manufacture of
intraocular lenses); 21 C.F.R. § 870.1025 - 870.5925 (classifying
and imposing requirements on various cardiovascular devices). To
support this claim, Michael points to the FDA's statement that
the MDA pre-empts state requirements only when the FDA "has
established specific counterpart regulations or there are other
specific requirements applicable to a particular device under the
act . . . ." 21 C.F.R. § 808.1(d).
The absence of regulations relating specifically to heart
valves is not dispositive as long as the Shiley valve was subject
to "any requirement applicable under [the MDA] to the device."
21 U.S.C. § 360k(a)(1). While Shiley's premarket application may
indeed have been flawed, there is ample evidence that the Shiley
valve was subject to requirements under the MDA. First, it is
clear that Shiley had to and did obtain a PMA prior to marketing
the device. See 21 U.S.C. § 360e. After Premarket Approval was
obtained, Shiley was subject to the labeling requirements of 21
C.F.R. § 801.1 - 801.16, which became effective February 13,
1976, and of 21 C.F.R. § 820.1 - 820.198, which defined the
general "good manufacturing practices" ("GMP") required of
medical device manufacturers after July 21, 1978. See 41 Fed.
Reg. 6896 (1976); 43 Fed. Reg. 31508 (1978). The FDA had the
power to force notification of a previously unknown risk under 21
U.S.C. § 360h(a)5 and at least once threatened to use this power.
5
. 21 U.S.C. § 360h(a) reads in relevant part as follows:
(a) Notification
If the Secretary determines that--
(1) a device intended for human use which is
introduced or delivered for introduction into
interstate commerce for commercial distribution
presents an unreasonable risk of substantial harm to
the public health, and
(2) notification under this subsection is
necessary to eliminate the unreasonable risk of such
harm and no more practicable means is available under
the provisions of this chapter (other than this
section) to eliminate such risk,
the Secretary may issue such order as may be necessary
to assure that adequate notification is provided in an
appropriate form, by the persons and means best suited
under the circumstances involved, to all health
professionals who prescribe or use the device and to
any other person (including manufacturer, importers,
distributors, retailers, and device users) who should
See app. 766-69. Even though these generally applicable
regulations do not rise to the level of specificity present in
the case of some other devices regulated by the FDA, we conclude
that they present "specific requirements applicable to a
particular device under the act." 21 C.F.R. § 808.1(d). They
therefore constitute proper bases for pre-emption under § 360k.
IV
Having disposed of Michael's general allegations, we
consider whether § 360k pre-empts the separate theories of
recovery that Michael alleges. See Cipollone, 112 S. Ct. at 2621
(considering each of Cipollone's theories of recovery to
determine if they are pre-empted). Because Gile has already
determined that state law negligence and strict product liability
claims are pre-empted under § 360k on account of the potential
conflict with FDA labeling, design, and manufacturing
requirements, we will not discuss those claims further than to
restate that they are pre-empted. See Gile, 22 F.3d at 543-44.
(..continued)
properly receive such notification in order to
eliminate such risk.
A.
Breach of Implied Warranties -- Pre-empted
Michael brings a claim for breach of the implied warranties
of merchantability and fitness for a particular purpose. 13
Penn. Con. Stat. Ann. §§ 2314, 2315. These Uniform Commercial
Code causes of action meet the first requirement of pre-emption
under § 360k; they are state imposed. They "arise by operation
of law" in any transaction in goods in Pennsylvania. Altronics
of Bethlehem, Inc. v. Repco, Inc., 957 F.2d 1102, 1105 (3d Cir.
1992). The requirements imposed by §§ 2314 and 2315 also
potentially differ from or exceed the FDA's requirements. To
decide Michael's implied warranty claims, the jury would have to
decide whether the Shiley valve was defective. Id.; see also 13
Penn. Cons. Stat. Ann. § 2314 (Goods must be "fit for the
ordinary purpose for which such goods are used."). In Michael's
case, this determination would require a finding that the heart
valve's design was flawed, unreasonably dangerous, or poorly
manufactured. Id.
This conclusion by necessity depends upon the accepted
standards for the design and manufacture of products in the state
of Pennsylvania. These standards may deviate from the FDA's
determinations in the PMA process or from the FDA's "good
manufacturing practices," which represent the agency's expert
evaluation regarding the design and production of the Shiley
valve. Section 360k does not permit this conflict. Accord King
v. Collagen Corp., 983 F.2d 1130, 1135 (1st Cir.), cert. denied,
114 S. Ct. 84 (1993).
B.
Express Warranty Based on Shiley's Label -- Not Pre-empted
Michael also brought an express warranty claim based on
Shiley's statement on its packaging that it "warrants that
reasonable care has been used in the manufacture of this device."
App. 680.
Before we address this issue, we must consider, as a
threshold issue, whether the district court ruled that this claim
was pre-empted. The district court's February 25, 1994 order
granted Shiley's motion for partial summary judgment based on
pre-emption. Shiley's motion had sought the entry of summary
judgment on Michael's claims of negligence, strict product
liability, breach of implied warranties, and fraud claims, but
not on Michael's breach of express warranty claim. App. 48.
However, in ruling on Shiley' motion, the district court stated,
"[w]e have held that the MDA has wholly pre-empted plaintiff's
state law claims against defendants." App. 1362. On appeal,
Shiley has argued that we can reach the question of pre-emption
because the district court granted summary judgment on Michael's
express warranty claim for failure to raise a genuine issue of
material fact and we can affirm on any appropriate ground.
Shiley's Br. at 28. Because "[t]he prevailing party may, of
course, assert in a reviewing court any ground in support of his
judgment, whether or not that ground was relied upon or even
considered by the trial court," we will address that issue.
Dandridge v. Williams, 397 U.S. 471, 475 n.6 (1970).
Section 360k only pre-empts requirements which the state
"establish[es]" or "continue[s] in force." The focus of § 360k
is on preventing the States from imposing on medical device
manufacturers normative policy choices which conflict with FDA
requirements. See Gile, 22 F.3d at 546. This focus is
consistent with the limited purpose for which Congress displaced
the states' coordinate regulatory role -- to permit efficient and
effective FDA regulation of medical devices. The FDA itself has
recognized the MDA's limited focus by interpreting § 360k to pre-
empt only state requirements "having the force and effect of
law," a term normally reserved for binding standards of conduct
that operate irrespective of private agreement. 21 C.F.R.
§ 808.1(d).
1.
Express warranties arise from the representations of the
parties which are made the basis of the bargain and do not result
from the independent operation of state law. See 13 Penn. Cons.
Stat. Ann. § 2313. Implied warranties, on the other hand, "arise
by operation of [state] law." Altronics of Bethlehem v. Repco,
Inc., 957 F.2d 1102, 1105 (3d Cir. 1992). The parties to a
contract, not the state, define the substantive obligations of
the contract and hence any express warranties. While the state
provides for the enforcement of the parties' bargain, it does not
define each party's duties.6
6
. The conceptual difficulty with determining whether, to what
extent, and for what purposes contractual obligations arise by
The underlying foundation of contract law is the objectively
manifested intentions of the parties. E. Allan Farnsworth,
Contracts §§ 1.1 - 1.3 (2d ed. 1990). Shiley, in the
representation which appears on the Shiley valve label, clearly
manifested an intent to be bound by its one unequivocal promise
and to disclaim any other implied warranties. Shiley
represented:
Shiley warrants that reasonable care has been used in
the manufacture of this device. This warranty is
exclusive and in lieu of all other warranties, whether
express, implied, written or oral.
App. 680.
2.
The Supreme Court has twice recognized this same distinction
between state-imposed and state-enforced common law remedies. In
American Airlines, Inc. v. Wolens, 1995 WL 15047 (U.S. 1995), the
(..continued)
virtue of state action, on the one hand, or the autonomous
actions of the parties, on the other, has been addressed time and
again in the literature on the common law. See, e.g., Jay M
Feinman & Peter Gabel, Contract Law as Ideology in The Politics
of Law 373, 378 (David Kairys ed. 1990); Charles Fried, Contract
as Promise 7-27 (1981). Ultimately, contractual obligations
result from the confluence of state authority and private
actions. While the "binding force" of a properly executed
contract derives from state authority, the content of the
commitment is determined (absent mandatory or impermissible
terms) by the parties themselves. In this way, contractual
obligations differ fundamentally from state imposed regulatory
requirements, such as the FDA requirement that medical devices
meet certain design parameters. Both the content and the effect
of these regulations flow from governmental authority.
Court held that the Airline Deregulation Act of 1978, 49 U.S.C.
§ 1305(a)(1), did not preempt Wolen's common law contract claims,
writing:
We do not read the ADA's preemption clause, however, to
shelter airlines from suits alleging no violation of
state-imposed obligations, but seeking recovery solely
for the airline's alleged breach of its own, self-
imposed undertakings. As persuasively argued by the
United States, terms and conditions airlines offer and
passengers accept are privately ordered obligations
"and thus do not amount to a state's enact[ment] or
enforce[ment] [of] any law rule, regulation, standard,
or other provision having the force and effect of law'
within the meaning of § 1305(a)(1)." Brief for the
United States as Amicus Curiae 9. . . . A remedy
confined to a contract's terms simply holds the parties
to their agreements -- in this instance to business
judgments an airline made public about its rates and
services.
1995 WL 15047 at *6.
Previously, in Cipollone, the Court concluded that § 5(b) of
the Public Health Cigarette Smoking Act of 1969 did not pre-empt
state contract law claims.
A manufacturer's liability for breach of an
express warranty derives from, and is measured by, the
terms of that warranty. Accordingly, the
"requirements" imposed by an express warranty claim are
not "imposed under State law," but rather imposed by
the warrantor. . . . In short, a common law remedy for
a contractual commitment voluntarily undertaken should
not be regarded as a "requirement . . . imposed under
State law" within the meaning of § 5(b).
Cipollone, 112 S. Ct. at 2622 (emphasis in original).
Moreover, our conclusion complies with the Supreme Court's
admonition that courts should be "reluctant" to find pre-emption
when "interpreting a federal statute pertaining to a subject
traditionally governed by state law." CSX Trans. Inc. v.
Easterwood, 113 S. Ct. 1732, 1737 (1993). This is especially
true here where Congress remained silent as to whether the MDA
pre-empted common law contract claims. The elimination of those
claims might result in the elimination of all legal remedies to
the purchaser. "It is difficult to believe that Congress would,
without comment, remove all means of judicial recourse for those
injured by illegal conduct." Silkwood v. Kerr-McGee Corp., 464
U.S. 238, 251 (1984).
In this case, Congress has not only remained silent as to
whether it intended to prevent states from enforcing the
contractual representations of medical device manufacturers, it
gave indications in 21 U.S.C. § 360h that at least some common
law remedies would remain in conjunction with FDA regulation.
Section 360h(d) defines the effect that a manufacturer's
compliance with an FDA notification, reimbursement, or recall
order should have:
Compliance with an order issued under this section
shall not relieve any person of liability under Federal
or State law. In awarding damages for economic loss in
an action brought for the enforcement of any such
liability, the value to the plaintiff in such action of
any remedy provided him under such order shall be taken
into account.
While this provision does not delineate the scope of the state
law remedies that remain after the MDA's passage, it contemplates
that injured persons will be able to pursue a category of claims
for economic loss under some circumstances. We conclude that
express warranty claims are included in that category.
3.
Shiley points to previous cases that have concluded that the
same or similar federal regulatory schemes do pre-empt contract
claims because the contract claims conflict with the FDA's
supervision over medical device labeling. Worm v. American
Cyanamid Co., 5 F.3d 744, 747 (4th Cir. 1993)7; King v. Collagen
Corp., 983 F.2d 1130 (1st Cir.), cert. denied, 114 S. Ct. 84
(1993)8; Kemp v. Pfizer, Inc., 851 F. Supp. 269 (E.D. Mich.
1994).9 These courts have held that pre-emption was appropriate
because the state law causes of action arose from representations
made by manufacturers on labels approved by the FDA or EPA. The
courts reasoned that because these labels were approved by the
relevant regulatory authority, they could not give rise to
voluntary obligations undertaken by agreement and so would
conflict with federal regulation.
7
. In Worm v. Cyanamid Co, the Fourth Circuit decided that the
pre-emption provision of the Federal Insecticide Fungicide and
Rodenticide Act (FIFRA), 7 U.S.C. § 136v(b), pre-empted the
plaintiff's contract claims because the claims were based on
instructions for use found on the product label which were
required and approved by EPA regulations. 5 F.3d at 749.
Because the Fourth Circuit found that these instructions were
mandated by the Environmental Protection Agency, the court
concluded that the express warranty claims were pre-empted. Id.
8
. In King v. Collagen Corp., the First Circuit concluded that
§ 360k pre-empted King's express warranty claims because those
claims arose from the language on the packaging approved by the
FDA. 983 F.2d at 1135. "Allowing appellant's express warranty
claims effectively would impose additional or different
requirements on Zyderm's labeling and packaging." Id.
9
. In Kemp v. Pfizer, Inc., the district court followed the
reasoning of King and Worm to hold that § 360k pre-empted a
contract claim against Pfizer, Hospital Products Group, and
Shiley, the defendants in this case.
If for no other reason, Worm is distinguishable from this
case because it deals with a separate statutory scheme. Worm
dealt with Federal Insecticide Fungicide and Rodenticide Act
(FIFRA), not the MDA. Second, the plaintiff in Worm complained
that Cyanamid had provided improper instructions for the use of
the insecticide on its label, giving rise to a contract claim. 5
F.3d at 748-49. Michael is not challenging the instructions for
the use or the implantation of the Shiley valve. Rather she
seeks to enforce the company's explicit warranty which guarantees
the product.
King and Kemp are less easily distinguished. The court in
King did not indicate the type of language or warning upon which
the plaintiff relied in the case before it and so we cannot know
if it is distinguishable from Michael's claims. Kemp dealt with
the same product and the same warranty as is at issue in the
present case.
Neither King nor Kemp are binding on this court and we
conclude that the concern expressed in those cases, that warranty
obligations would arise from and therefore be in conflict with
statements that are required on a regulated label, does not make
pre-emption appropriate. First, the fact that third parties
dictate or define the terms of a contract does not undermine the
doctrine that contractual duties arise from the mutual assent of
parties to agreed upon language. For example, organizations that
receive government grants to operate social programs frequently
agree to include specified language in agreements with
contractors and beneficiaries. See, e.g., 24 C.F.R. § 85.36(i)
(1994) (mandating the inclusion of specified terms in contracts
between Housing and Urban Development grant recipients and local
parties); Ayers v. Philadelphia Housing Authority, 908 F.2d 1184
(3d Cir. 1990) (discussing HUD mandates for contracts between the
local housing authority and the local authority's
tenants/purchasers). Government contractors must agree to
specified compensation and wage terms in their contracts with
employees who work on the government projects. See, e.g., 40
U.S.C. §§ 328-29, 323; 41 U.S.C. § 351; 29 C.F.R. §§ 4.1 to 4.51;
29 C.F.R § 5.5. Courts do not thereby conclude that these
requirements cause the immediate parties' contractual
relationships to arise from the federal mandate. Regardless of
the economic and legal pressures that dictate the final terms,
the contract still results from the parties' mutual agreement to
those terms.
Further, King and Kemp did not adequately consider the
extent to which Shiley's label was ultimately a product of its
voluntary actions. The FDA does not devise a label of its own
making. Rather, Shiley submitted its proposed label to the FDA,
which label was then reviewed with the company. Shiley itself
drafted the initial language of the label. If Shiley disagreed
with FDA recommendations, it could have engaged in negotiation
over what statement was proper or, if it did not wish to be bound
by the required statement, it could have chosen not to market its
device. Despite indications in King and Kemp to the contrary, we
believe that Shiley participated actively and meaningfully in the
FDA regulatory process that resulted in the label which we review
here.
4.
Even if this were not the case, the enforcement of an
express warranty that arises from approved packaging does not
establish a requirement that "is different from, or in addition
to, . . . any requirement applicable under this chapter to the
device." 21 U.S.C. § 360k. Through her express warranty claim,
Michael seeks to enforce the very language which the FDA approved
on the Shiley valve label. Given the clarity with which that
language speaks of warranties, neither the FDA, Shiley, nor
Michael could have mistaken this language as creating anything
other than an explicit contractual obligation. Thus, it is the
FDA's own requirement that Michael would have the state enforce.
If any person, other than Shiley, "established" the
warranty, it was the FDA, not the state. Because the obligations
imposed arise directly from the FDA's own approved language, the
resulting liability does not differ from or add to FDA
regulation. Rather it supports the FDA's approval regulation by
giving it effect.
Michael's contract claim is not a product of state action;
hence, it is not state imposed -- the sine qua non of pre-emption
under § 360k. Michael's express warranty claim is not pre-empted
and can be prosecuted.
V
Michael also brought fraud claims relying on two theories of
recovery. First, she alleges that Shiley fraudulently misled the
FDA to her eventual, but foreseeable, detriment. Second, she
alleges that Shiley's unregulated promotional and advertising
materials fraudulently misrepresented that the Shiley valve was
safe and would produce fewer complications than other valves when
the company knew that these claims were not supportable. We
consider whether § 360k pre-empts each of these claims.
A.
Fraud on the FDA -- Pre-empted
Michael produced substantial evidence that Shiley misled the
FDA with false or misleading information when it applied for
Premarket Approval. She claims that these fraudulent submissions
led to the FDA's approval of the Shiley valve and thus led
eventually to the necessity of removing the heart valve implanted
in her. Alternatively, she argues that these fraudulent
submissions estop Shiley from claiming that the MDA pre-empts its
common law claims. Because of the conflict with the FDA's own
efforts to monitor and control its PMA application process, we
conclude that Michael's claims for Shiley's knowing
misrepresentation to the FDA, even if provable, are pre-empted.
A state law cause of action for fraud is a state imposed
requirement. By means of its recognized cause of action in
fraud, the Commonwealth of Pennsylvania imposes a duty on anyone
who sells products. That duty requires the seller to avoid any
material misrepresentation that could induce purchasers to buy
its product. See Moser v. DeSetta, 589 A.2d 679, 682 (Pa. 1991)
Michael seeks to use this general prohibition on deception
to encourage the district court to review the PMA application
Shiley submitted to the FDA. This inquiry could ultimately
require that a court determine whether the information Shiley
submitted was truthful, whether it was complete, whether FDA
procedures sufficed to avoid a material misrepresentation, and
whether the FDA should have or would have approved the device
despite the misrepresentations. In sum, this claim requires a
court, applying state law, to perform the same functions
initially entrusted to the FDA.
Section 360k does not permit such a searching state inquiry
into the inner workings of FDA procedures. Congress allocated
the FDA responsibility to design and manage a process which would
result in approval of the safest and most effective medical
devices possible. See 21 U.S.C. § 360e (creating the PMA
requirement). Congress also assigned the FDA the responsibility
to approve or disapprove of applications to market medical
devices. Under § 360k, states may not impose different
requirements and thereby reach a different conclusion than the
FDA. "[W]here the FDA was authorized to render the expert
decision . . ., it, and not some jury or judge, is best suited to
determine the factual issues and what their effect could have
been on its original conclusions." King, 983 F.2d at 1140
(Aldrich & Campbell, J.J. concurring). Under the MDA, states
have no authority to police Shiley's compliance with the FDA's
procedures. If Shiley knowingly misled the FDA in its PMA
application, it is for the FDA to remedy that situation using the
authority Congress gave it in the MDA.
Further, permitting a fraud claim based on false
representations to the FDA would conflict with our precedent that
plaintiffs may not bring implied causes of action for violations
of the Food, Drug and Cosmetic Act. Gile v. Optical Radiation
Corp., 22 F.3d 540, 544 (3d Cir.), cert. denied, 115 S. Ct. 429
(1994). Plaintiffs cannot circumvent this bar by characterizing
their cause as a claim for state law fraud.
Nor can Michael revive the pre-empted fraud claim by
characterizing it as a defense to pre-emption. Michael argues
that, though her fraud claim might be pre-empted, her allegations
of Shiley's fraud in obtaining its PMA, if proven, should deprive
Shiley of the defense of pre-emption. In essence, Michael argues
that we should not permit Shiley to invoke the cloak of federal
pre-emption when it obtained that cloak through the fraudulent
manipulation of the regulatory process.
While we do not condone misconduct by medical device
manufacturers, we cannot agree with Michael's theory. If a
medical device manufacturer's claim that the MDA pre-empts a
plaintiff's cause of action depends in the first instance upon
proof that its Premarket Approval was not fraudulently obtained,
courts would have to engage in the intrusive inquiry, which we
have just demonstrated is forbidden. Only the timing, and not
the inquiry itself, would differ from a claim for fraud on the
FDA. This argument thus presents not less, but greater
interference with the FDA's decisions. An attempt to reexamine
the FDA's approval under state law standards, however pleaded, is
pre-empted by § 360k.
B.
Fraud Based on Shiley's Advertisements -- Not Pre-empted
Michael's second fraud claim differs from the first in that
it does not rely on conduct which was directly regulated by the
FDA. Michael alleges that Shiley sent cardiac surgeons and
cardiologists a series of letters and other promotional materials
which knowingly misrepresented the extent of the valve fracture
problem and knowingly overstated the reduction in serious side
effects achieved by the Shiley valve. See FDA and the Medical
Device Industry, Hearing Before the House Committee on Energy and
Commerce, 101st Cong., 2d Sess. 15-21 (1990) (providing samples
of these letters); App. 393-95. Michael alleges that the
company's misinformation resulted in the eventual harm she
suffered when her valve was explanted.
1.
Having already concluded that state law fraud claims create
state-imposed requirements and, when combined with other § 360k
elements, are thus pre-empted, see section V. A. supra, we need
only consider the other elements of pre-emption under § 360k.10
10
. The Supreme Court recently held that the Airline
Deregulation Act of 1978 ("ADA") pre-empted the enforcement of a
state consumer fraud statute, the Illinois Consumer Fraud Act,
815 Ill. Comp. Stat. § 505/2. American Airlines, Inc. v. Wolens,
The FDA had not imposed specific requirements related to
advertising and promotion of the Shiley valve. Accordingly, we
find that, as applied to Michael's circumstances, a state law
fraud claim based on Shiley's advertising and promotional
activities does not impose a requirement that "is different from,
or in addition to" a FDA requirement and "which relates to the
safety or effectiveness of the device or to any matter included
in a requirement applicable to the device under this chapter."
21 U.S.C. § 360k.
Unlike Michael's strict liability claims which are based on
a duty to produce safe products, Michael's fraud claims are based
"on a more general obligation -- the duty not to deceive."
Cipollone, 112 S. Ct. at 2624. Thus, Michael's fraud claim does
not relate to the safety or effectiveness of the Shiley valve.
Michael argues that because this duty to avoid deceit does not
"relate to the safety or effectiveness of the [Shiley valve],"
her claims are not pre-empted.
She relies on Cipollone for this argument. In Cipollone,
the Supreme Court concluded that the Cipollone's fraud claims
against cigarette manufacturers were only pre-empted to the
(..continued)
1995 WL 15047 *5-*6 (U.S. 1995). In Wolens, the Supreme Court
held that state consumer fraud statute was a state imposed law.
Id. The Court then found that the Illinois state statute met the
other element of pre-emption under the ADA, that is, the statute
"relate[d] to [airline] rates, routes, or services." 49 U.S.C.
§ 1305(a)(1).
Here, of course, the other requirements which dictate
pre-emption under § 360k of the MDA differ from the requirements
which dictate pre-emption under § 1305(a)(2) of the ADA. As
stated in text, we conclude that Michael's common law fraud claim
is not pre-empted by § 360k.
extent they sought to impose additional warnings on the cigarette
packages. The Court permitted Cipollone's fraud claims for
"claims based on allegedly false statements of material fact made
in advertisements." Id. at 2623-24. The Court made this
distinction because Cipollone's second claim based on "the duty
not to deceive" did not conflict with federal requirements of § 5
of the Public Health Cigarette Smoking Act of 1969 which only
pre-empts state law claims "based on smoking and health." Id. at
2624.
If § 360k also limited its pre-emptive scope to state
requirements "which relate[] to the safety or effectiveness of
the device," Michael's argument might be compelling, but § 360k
is not so limited. It extends as well to state requirements
"which relate[] . . . to any matter included in a requirement
applicable to the device under this chapter." Thus, we must
determine not only whether Michael's fraud claim relates to
"safety and effectiveness" -- which we hold it does not -- but
also whether it relates to any other FDA requirement.
2.
This latter inquiry turns on whether the FDA imposed any
requirements on Shiley's efforts to promote its heart valve. The
record reflects that it did not. Shiley prepared and sent the
letters which tout the valve's reliability and superiority as
compared to competitors' valves to doctors without the FDA's
approval. App. 393-94. The FDA, at that time, was not
supervising medical device manufacturers' efforts to promote
their devices outside of a limited category of "restricted
devices" defined by the MDA and not relevant to this appeal.
Only in the last few years has the FDA actively sought to control
the promotional representations which device makers make to the
medical community. Sandra J.P. Dennis, Promotion of Devices: An
Extension of FDA Drug Regulation or a New Frontier, 48 Food &
Drug L.J. 87 (1993). We note, however, that this on-going
extension of the FDA's authority has been criticized as exceeding
the FDA's statutory mandate. See id; Jeffrey N. Gibbs, Medical
Device Promotional Activities and Private Litigation, 47 Food &
Drug L.J. 295 (1992).
To be sure, the FDA did regulate the information Shiley
placed on its labels. As required by the MDA, Shiley submitted
its labels to the FDA and the FDA approved them. (See section
IV. B. supra). A deviation from the content of the label
approved by the FDA violates the MDA. 21 C.F.R. § 814.39(a)(2).
Nonetheless, there is a substantial difference between
supervising label content and supervising advertising.
Mindful that the Supreme Court has observed in a slightly
different context that "Congress offered no sign that it wished
to insulate . . . manufacturers from longstanding rules governing
fraud," Cipollone, 112 S. Ct. at 2624, we conclude that Michael's
second theory of fraud is not precluded by § 360k and is thus not
pre-empted.
Our conclusion does not conflict with First Circuit's
determination in King that § 360k pre-empted King's fraud claim.
983 F.2d at 1136. King's fraud claim arose from the absence of
warnings on the label of the medical device. Id. Because the
FDA regulates the labeling of medical devices, King's claims were
pre-empted. Michael's theory does not depend upon Shiley's
representations on its labeling. Unlike in King where the court
determined that the plaintiff's fraud claim was, "at bottom, a
failure to warn claim," id., and thus pre-empted by the MDA,
Michael's fraud claim is, at bottom, a fraudulent promotion
claim. As such, it is not pre-empted.
VI
Summary Judgment -- Sufficient Evidence
Although the district court granted summary judgment on the
majority of Michael's claims because it believed they were pre-
empted, it also analyzed the claims using the traditional
standard for summary judgment. We have concluded that Michael's
express warranty claim and her fraud claim are not pre-empted.
However, our holding in this regard does not address the district
court's ruling that Michael had failed to present sufficient
evidence to proceed to trial. We address that issue here and
hold that, on this record, it was error to grant summary judgment
for Shiley.
A.
Our consideration of Michael's contract claims originates
with an examination of the contract. The label attached to the
heart valve, which was implanted in Michael, included the
statement "Shiley warrants that reasonable care has been used in
the manufacture of this device." App. 680. This language
clearly created an express warranty with regard to the manner in
which Shiley manufactured its heart valves. Shiley does not deny
that the sale created a valid contract with an express warranty.
See 13 Pa. C.S.A. § 2313. Rather Shiley contends that it never
breached the warranty because there is no proof that the valve
implanted in Michael was defective.
We agree that there is no evidence in the record that
Michael's valve was defective. That does not, however, defeat
Michael's cause of action. Shiley's warranty does not simply
warrant that the valve which was implanted in Michael was defect-
free. The language is less specific, warranting instead that
"reasonable care has been taken in the manufacture of this
device." App. 680.
We are satisfied that the representation made by the
language on this label reaches beyond the valve explanted from
Michael to encompass the manufacture of Shiley valves generally.
While most consumers of most products have little reason to seek
assurances in a contract that any device, other than the product
purchased by them, is safe and effective, heart valve purchasers,
as perhaps other purchasers of implanted devices, have salient
and compelling reasons to seek such assurances.
Shiley's customers rely on Shiley's mechanical heart valves
in a manner that differs entirely from the normal buyer's
reliance on a consumer product. The Shiley valve sustains
customer's lives. Malfunction will result in serious harm, or
most likely, death. In this context, the purchaser has reason to
demand a very high degree of assurance that the implanted product
presents no substantial risk that it will fail. The existence of
a significant risk that the device will fail makes the product
unsuitable for its purpose. Therefore, a patient-purchaser has
every reason to seek, and Shiley has every reason to give,
assurances that reasonable care has been taken in the production
of such life sustaining devices generally. It is only such a
warranty that can alleviate concerns that an implanted medical
device will fail without warning.
Shiley's warranty afforded its patient-purchasers those
assurances. Michael proceeded with her implant operation with a
justifiable belief that the valve implanted in her heart would
not fracture or fail due to deficiencies in the manufacturing
process. Because any latent defect in an implanted device may be
undetectable after it has entered medical supply channels, the
representations made by the manufacturer, which here form the
basis of Shiley's warranty, requires an examination, not just of
the specific heart valve implanted in Michael, but rather of
Shiley's valve production generally.
The evidence in the record suggests that Shiley did not
exercise due care in the fabrication of the Bjork-Shiley valve.
A number of Shiley valves failed as a result of welding cracks
that were not prevented or eliminated at Shiley's factories.
Michael also submitted to the court the findings of a House
Committee report on the manufacture of Shiley's valves. That
report stated that Shiley trained welders inadequately, repaired
valves which had previously been deemed not repairable by
inspectors, and masked cracked welds to pass quality inspections.
She also produced a letter to Shiley from a medical researcher,
stating that "[y]our statement re. strut fracture that I just
received only tells me that your manufacturing procedure is not
acceptable." App. 461. Former welders stated in affidavits that
Shiley trained welders poorly and told welders to force badly
welded valves past quality control personnel. App 615-16, App.
623-25. This record could amply support a jury determination
that Shiley did not exercise reasonable care in the manufacture
of its heart valves.
Michael has also shown that Shiley's alleged manufacturing
breaches caused her damage. Shiley's failure to manufacture its
heart valves using proper care resulted in a risk that any of its
heart valves could fail. Indeed, the weak or improper strut
construction has resulted in over 500 documented strut failures.
Nor, as we have pointed out, could it be determined without
explantation whether the valve implanted in Michael suffered from
any of the same defects that affected other valves. Accordingly,
Michael's doctors concluded that it was reasonable to explant her
Shiley valve and replace it surgically. App. 499-501, 526-29;
see also app. 471 (Shiley document sent to doctors noting an
investigative article which recommended replacement of heart
valves in young patients). Michael understandably took the
advice of her medical advisors. The cost, inconvenience, risk,
and pain of the surgery to explant and replace the valve occurred
because of Shiley's alleged general manufacturing deficiencies
which led to Shiley's alleged breach of its warranty of
reasonable care.
Contrary to Shiley's arguments, our conclusion does not
conflict with our recent decision in Angus v. Shiley, Inc., 989
F.2d 142 (3d Cir. 1993).11 In Angus, we concluded that a
recipient of a Shiley valve could not recover for intentional
infliction of emotional distress and a failure to warn claim
where the implanted valve had neither failed nor been explanted.
Id. at 147 & n.5. Angus had failed to allege that the valve
implanted in Angus was defective. Id. In the absence of a valve
failure or explantation surgery, she could not maintain a product
liability action. Id. In footnote 5, we explicitly held open
the question of whether relief would be appropriate following
surgery to explant the valve. Id. at 147 n.5.
Unlike the plaintiff in Angus, Michael has suffered a
tangible injury on account of the risks, pain, and emotional
trauma associated with explantation of the Shiley valve.
Michael's case presents the issue left open in Angus -- what
relief may be accorded for physical and emotional trauma
occasioned by the need for actual explantation surgery. We
conclude that, under the terms of Shiley's express warranty,
11
. Shiley claims we had earlier determined that a plaintiff
whose valve had not failed could not recover for emotional
distress on any product liability theory in Brinkman v. Shiley,
Inc., 732 F. Supp. 33 (M.D. Pa.), aff'd without opinion, 902 F.2d
1558 (3d Cir. 1989); see Shiley Brief at 41. We, of course, are
not bound by an unpublished disposition of our court. See Third
Circuit Internal Operating Procedures § 5.8. Moreover, the
plaintiff in Brinkman, unlike the plaintiff here, had not
undergone explantation surgery.
sufficient evidence has been shown by Michael to withstand entry
of summary judgment for Shiley. Our conclusion is consistent
with Pennsylvania's rule that emotional harm may be recovered
when it accompanies a physical injury. Houston v. Texaco, Inc.,
538 A.2d 502, 504 (Pa. Super. 1988).
B.
Finally, we consider whether Michael produced sufficient
evidence to proceed to trial on her fraud claim.12 In
Pennsylvania, the elements of fraud are: (1) a material
misrepresentation of fact, (2) which is false and (3) made with
knowledge of its falsity, (4) which is intended to induce the
receiver to act, and (5) upon which a party justifiably relies.
Mellon Bank Corp. v. First Union Real Estate, 951 F.2d 1399, 1409
(3d Cir. 1991).
It is well established that fraud consists of anything
calculated to deceive, whether by single act or
combination, or by suppression of truth, or suggestion
of what is false, whether it be by direct falsehood or
by innuendo, by speech or silence, word of mouth, or
look or gesture. We have held that "fraud is composed
of a misrepresentation fraudulently uttered with the
intent to induce the action undertaken in reliance upon
12
. The somewhat confusing nature of the district court's orders
makes it uncertain that the district court determined that
Michael did not raise a genuine issue of material fact on her
fraud claim. While the court granted a judgment on her fraud
claim on the belief that it was pre-empted, a conclusion which we
now reverse, the court granted Shiley's motion for summary
judgment for failure to produce sufficient evidence on all claims
"except plaintiff's fraud claim." Nonetheless, because we
exercise the same review as the district court did in the first
instance, we will consider the merits of Shiley's motion,
particularly since the two district court orders appear on their
face to conflict with one another.
it, to the damage of its victim." The concealment of a
material fact can amount to a culpable
misrepresentation no less than does an intentional
false statement.
Moser v. DeSetta, 589 A.2d 679, 682 (Pa. 1991) (quoting Thomas v.
Seman, 304 A.2d 134, 137 (Pa. 1973)) (other citations omitted).
In support of her claim, Michael points to two sources of
fraudulent information: (1) letters written by Shiley to doctors
between 1978 and 1983 which attempt to minimize the significance
of the prior valve fractures and (2) advertisements and other
promotional materials which emphasize a reduction in
complications with the Shiley valve that never materialized.
Michael claims that Shiley's representations to doctors in
letters, which accompanied its recalls and which Shiley otherwise
disseminated to boost the Shiley valve's image following the
disclosure of the outlet strut fractures, misrepresented the
extent of the strut fracture problem. These letters state that
some fractures had occurred but purportedly withheld information
on the actual number of strut fractures known to Shiley.
Further, the letters asserted that the Shiley valve's original
design and the then current manufacturing practices confirm the
structural integrity of the Shiley valve.
In contrast to Shiley's reports, the record discloses that
Shiley had ample reasons to believe both the heart valve's design
and the manufacturing process rendered the heart valve unsafe.
Just a month prior to Shiley's distribution of a set of letters
to doctors in May 1982, Dr. Bjork, one of the original designers
of the Shiley valve, wrote Shiley, "You're circling around with
other solutions is probably a waste of time. At this stage,
welding will not be acceptable any more [sic]. . . . Your
statement re. strut fractures that I just received only tells me
that your manufacturing procedure is not acceptable. You have
provided me with absolutely no facts and truthworthy [sic] data
for the future." App. 461.
In a prior letter to Dr. Bjork, Shiley had written, "We
would prefer that you did not publish the data relative to strut
fractures. We expect a few more and until the problem has been
corrected, we do not feel comfortable." App. 548. This
disclosure contrasts with Shiley's assurances in the letters to
doctors that new fractures were very unlikely to occur.
Moreover, Michael has produced affidavits and deposition
testimony from employees who worked for Shiley in the late 1970s
and early 1980s that state that Shiley supervisors and management
ordered them to reweld valves which could not pass inspection, to
polish or cover defects in outlet strut welds, and to rework
previously scrapped valves in an attempt to hide any defects in
the outlet strut welds. App. 555-57, 613-17, 625-29, 635-36.
These manufacturing practices likely undermined the structural
integrity of the valves and thereby rendered Shiley's
representations false.
Michael has also produced samples of advertisements, which
Shiley placed in medical journals that circulate to cardiac
surgeons, claiming a fifty percent reduction in complications
with the Shiley valve over prior valves. App. 678. In prior
testimony, Dr. Bjork disagreed that this claim fully represented
the scientific findings. App. 812. By 1984, the FDA, through
independent investigation, concluded that scientific tests could
not confirm these reductions. App. 766. In fact, the FDA
determined that the Shiley valve's design "d[id] not result in
meaningful differences in thromboembolic complications in
clinical experience . . . . After nearly eight years of clinical
use, there is no statistically significant difference between
[the Shiley valve and its predecessor] when thromboembolic
complication rates are compared." Id.
This record reveals a sufficient pattern of affirmative
statements that are contrary to the true information known to
Shiley, which, when combined with the withholding of material
information as to the integrity and properties of the Shiley
valve, is more than sufficient to permit a jury to conclude that
Shiley intentionally misrepresented the Shiley valve's
performance and the importance of the strut fractures.
Having adduced evidence of the first three elements of a
cause of action sounding in fraud, we turn to a consideration of
the remaining two elements: inducement and justifiable reliance.
We conclude that Shiley had ample reason to expect that its
advertisements and letters, although directed to physicians,
would induce action by heart patients to accept Shiley's implants
on the basis of their physicians' recommendations. We also
conclude that the patients' reliance on these recommendations was
justifiable.
Pennsylvania has held that "the persons or class of persons
whom [a fraudulent declarant] intends or has reason to expect to
act or refrain from action in reliance upon the
misrepresentation" may sue in fraud for the damage which results
from the declarant's fraudulent statement. Woodward v. Dietrich,
548 A.2d 301, 309, 315 (Pa. Super. 1988) (quoting Restatement
(Second) of Torts § 531 (1976)).
In Woodward, the Pennsylvania Superior Court held that a
subsequent transferee of a home could sue the prior owner's
plumbing contractor, when the plumber had fraudulently
misrepresented to the prior owner that his work met the relevant
municipal codes. The plumber fraudulently concealed an improper
link to the city's sewer system after being hired by the
Dietrichs, the former owners of the house, to bring the house up
to code. After the Dietrichs sold the home to the Woodwards, the
sewer line backed up into the house's basement. The Woodwards
brought a cause of action sounding in fraud against the plumber.
The Pennsylvania Superior Court adopted the rule of the
Restatement (Second) of Torts § 531 (1976), which reads:
One who makes a fraudulent misrepresentation is subject
to liability to the persons or class of persons whom he
intends or has reason to expect to act or refrain from
action in reliance upon the misrepresentation, for
pecuniary loss suffered by them through their
justifiable reliance in the type of transaction in
which he intends or has reason to expect their conduct
to be influenced.
This provision extends liability beyond those to whom the
declarant directs his fraudulent misrepresentation to those whom
the declarant has special reason to anticipate will be induced to
act. Woodward, 548 F.2d at 313, 315. As comment "e" of the
Restatement makes clear, the declarant need not know the identity
of the eventual plaintiff if the plaintiff is a member of a class
of persons whom the declarant has reason to expect will act in
reliance upon his fraud. Restatement (Second) of Torts § 531
comment e (1976) ("The maker may have reason to expect that his
misrepresentation will reach any of a class of persons, although
he does not know the identity of the person whom it will reach or
indeed of any individual in the class."); Woodward, 548 F.2d at
309 n.9.
After adopting this standard, the court found that the
plumber had reason to expect that any subsequent purchaser, such
as the Woodwards, would rely on his fraudulent statement that the
sewer connection was acceptable, and thus, the court permitted
the Woodwards to proceed with their fraud action.13
The Superior Court's decision mirrors § 533 of the
Restatement (Second) of Torts. Section 533 makes a declarant
liable when the declarant "has reason to expect that [the
13
. More recently, the Pennsylvania Superior Court relied
upon its opinion in Woodward to decide that plaintiffs need not
have been in privity with a product manufacturer to bring a claim
under Pennsylvania's consumer fraud statute, the Pennsylvania
Unfair Trade Practices and Consumer Protection Law, 73 Pa. Con.
Stat. Ann. § 209-9.2(a). Valley Forge Towers South Condominium
v. Ron-IKE Foam Insulators, Inc., 574 A.2d 641, 646-47 (Pa.
Super. 1990), aff'd without opinion, 605 A.2d 798 (Pa. 1992). As
a result, a condominium association could sue their roofing
contractor's supplier for the supplier's unlawful business
practices despite the fact that the association never purchased
materials from the supplier. Rather it had only received a
warranty from the supplier. "[A]s the materials were intended to
become part of a fixture to realty, [the supplier] knew or should
have known that its warranty would be relied upon by [the
condominium association] covered by the roof it warranted." Id.
at 646.
misrepresentation's] terms will be repeated or its substance
communicated to the other, and that [the misrepresentation] will
influence his conduct in the transaction or type of transaction
involved." See Ostano Commerzanstalt v. Telewide Systems, Inc.,
794 F.2d 763, 766 (2d Cir. 1986) (holding licensor liable to
sublicensee for representations made to licensee with reason to
expect that they would influence sublicensee's behavior). As
with § 531, the comments to § 533 make it clear that the
declarant (here, Shiley) need not be able to identify the party
(here, Michael) who eventually relies if the party (here,
Michael) who relies is a member of a class of people that the
declarant (here, Shiley) would expect to rely on the
representation. Restatement (Second) of Torts § 533 comment g
(1976).
Michael fits within the rule of Woodward and Restatement
§ 533. Shiley had ample reason to expect that the patients and
eventual recipients of the Shiley valve implants would be
affected by the information it published and distributed to
doctors. Indeed, that was Shiley's intent. Shiley had to
anticipate that its letters and advertisements would lead doctors
to recommend, and the physician's patients to choose, the Shiley
valve. As § 533 makes clear, the fact that Shiley initially made
its representations to Michael's doctors, rather than directly to
Michael, does not undermine Michael's claim.
By the same token, Michael's doctors were justified in
relying on the medical claims Shiley provided in its promotional
materials to determine the proper course of treatment for
Michael.14 Shiley held a tremendous advantage over the doctors
in its knowledge of the facts surrounding the strut fractures and
the scientific literature on thromboembolism. The doctors were
justified in relying on Shiley to restate honestly the facts and
findings pertaining to the valves which Shiley produced. See
Aaron Ferer & Sons, Ltd v. Chase Manhattan Bank, 731 F.2d 112,
123 (2d Cir. 1984) (where "one party possesses superior
knowledge, not readily available to the other, and knows that the
other is acting on the basis of the mistaken information," the
second party can justifiably rely on the first party's
representations); Daughtrey v. Ashe, 413 S.E.2d 336, 338 (Va.
1992) ("[I]f one who has superior knowledge makes a statement
about the goods sold and does not qualify the statement as his
opinion, the statement will be treated as a statement of fact.");
Restatement (Second) of Torts § 542(a) & comment f (1976).
The information provided by Shiley was intended to affect a
doctor's choice of a heart valve for Michael. Shiley distributed
its literature containing heart valve information for that very
purpose -- to encourage doctors to continue implanting the Shiley
valve. The record, read in the light most favorable to Michael,
14
. Both her doctors testified that they received letters from
Shiley regarding the Shiley valve. App. 495, 524. While they
did not retain those letters, it is reasonable to assume, given
Shiley's nationwide distribution of the letters, that these
letters include the communications discussed above. Both doctors
stated that they read standard cardiac journals in which Shiley's
advertisements and claims appeared in order to stay current with
developments in the field of cardiology and cardiac surgery.
App. 500, 535.
suggests that the doctors, who advised Michael, relied on
Shiley's disclosures. Accordingly, Shiley's letters and
promotional materials likely affected the choice to implant the
Shiley valve in Michael.
We conclude that Michael has produced sufficient evidence to
raise a genuine issue of fact on her claim of fraud and we will
reverse the district court's February 25, 1994 orders of summary
judgment on that claim.
VII
Having considered the record and the arguments of the
parties, we will affirm the district court's grant of summary
judgment on Michael's claims of negligence (both manufacturing
and design), strict product liability, and breach of implied
warranties -- all of which we hold are pre-empted by 21 U.S.C.
§ 360k. (See section IV. A. supra). We also hold that Michael's
complaint to the extent it relies on fraud perpetrated by Shiley
on the FDA is pre-empted. (See section V. A. supra).
We will reverse the district court's February 25, 1994 order
granting summary judgment to Shiley on Michael's breach of
express warranty claim (see section IV. B. & VI. A. supra) and
her fraud claim insofar as she proceeds on the basis of Shiley's
representations in its advertising and promotional materials.
(See section V. B. & VI. B. supra).
We will remand the case to the district court for further
proceedings consistent with the foregoing opinion.