A federal judge in one of our non-drug or device cases recently informed the parties that he was so busy with his criminal docket that it might be better to let the magistrate judge take over our case, including trial. We fretted over the prospect of losing a judge who had thus far been very attentive, careful, and rigorous, but the issue was mooted when the plaintiff swiftly said “No thanks.”
Over the years, we have had many good experiences with magistrate judges. Indeed, our last trial in Philly was in front of a magistrate judge, and it would be hard to imagine how it could have been any more fair or efficient. The case we are discussing today, Lynch v. Olympus Am., Inc., 2018 U.S. Dist. LEXIS 185595 (D. Colorado Oct. 30, 2018), was handled by a magistrate judge pursuant to the parties’ consent via 28 U.S.C. 636(c). The plaintiff might now regret such consent, in light of the magistrate judge’s decision, but the clarity and logic of that decision is undeniable.
In Lynch, the plaintiff sued three companies for making endoscopes that were allegedly too hard to clean, thereby causing the plaintiff to suffer an infection and illness. One of the companies was a Japanese parent, and the other two were affiliates that did business in the United States. The Japanese parent moved to dismiss the complaint for want of personal jurisdiction. The affiliates moved to dismiss the strict liability and negligence claims on substantive grounds, and to dismiss the misrepresentation claims for failure to plead with specificity.
The magistrate judge’s opinion is exquisitely organized, so we’ll follow its outline faithfully.
- Personal jurisdiction
The Lynch court considered whether the Japanese parent could be hailed into Colorado based on the stream of commerce theory. That theory is not one of our favorites, and the Lynch court correctly described its fuzziness. SCOTUS has not exactly been very exacting in setting forth the contours of the stream of commerce theory. The Tenth Circuit has been better in erecting this key guardrail: “specific jurisdiction must be based on actions by the defendant and not on events that are the result of actions taken by someone else.” Monge v. RG Petro-Machinery (Group) Co., 701 F.3d 598, 618 (10th Cir. 2012). The Tenth Circuit has also been unambiguous that mere corporate affiliation is insufficient to impute one company’s contacts to its parent corporation. Accordingly, the Lynch court did not feel “free to disregard corporate formalities when assessing whether it may properly exercise personal jurisdiction over a defendant.” What we end up with is another successful example of using marketing subsidiaries to insulate the foreign parent from suit.
Are we done with personal jurisdiction? Not yet. The plaintiff tried to invoke non-registration-related consent by the parent corporation, based on things that happened in other cases. Nice try. Not really. The Lynch court reasonably pointed out that other cases are other cases, and what happened in those other cases has no bearing on or similarity with this case. “A consent in one case does not affect the propriety of a court’s exercise of personal jurisdiction in another case, even if related and even if in the same forum.” The court agreed with the plaintiff that it might be entitled to some jurisdictional discovery — if it could successfully plead the substantive claims, but that, as we will see in a moment, is not so clear.
- Design Defect
Beyond bare conclusions, the plaintiff did not manage to allege that the risks of the endoscopes outweigh benefits in all patients. Potential problems with reuse do not affect all patients on whom new devices are used. “[M]erely being difficult to clean does not render the device unsafe for all all patients.” Moreover, causation requires more than the fact that the plaintiff fell ill after encountering the product. The allegations are too conclusory to state a claim for strict liability under a design defect theory.
- Failure to Warn
Lynch is the first case applying Colorado law to apply the learned intermediary rule to a medical device. No prior Colorado court had explicitly done so, though there was at least one case that generally treated prescription drugs and medical devices together. The plaintiff in Lynch contended that the endoscope was a nonpresciption device. Even if that contention was “technically correct,” it did not matter. “Clearly, patients are not buying [endoscopes] over the counter” to administer the procedure to themselves at home. It is necessarily a doctor who “decides the procedure is required and performs it.” To our mind, the Lynch court analysis makes good sense. There are a variety of medical devices that might not technically require a prescription, but there is still no doubt that a doctor is a necessary (and learned) intermediary. Think of scalpels. The doctor, not the patient, selects the particular scalpels employed in a procedure. Would it make any sense to permit personal injury plaintiffs to complain that the scalpel manufacturer supplied inadequate warnings? Scalpels are, sharp, sure. But maybe the manufacturer should have warned that they are very, very sharp. Or maybe there is a materials safety data sheet for one of the scalpel’s raw materials that might give the dense or paranoid pause. The mind reels. For now, let’s content ourselves with the Lynch court’s application of the learned intermediary rule to endoscopes, and the court’s conclusion that the plaintiff did “not allege the failure to warn as applied to her physician.”
The Lynch court made another ruling that is pertinent to many drug and device cases: is the failure to warn really about warning at all? What exactly is the warning and what would be the effect of the warning? In Lynch, the warning allegedly lacking seems to be nothing more than telling doctors that the product is defective. “Plaintiff’s claim is, in essence, that the product was defectively designed and therefore the warning was inadequate; as pled, the failure to warn claim cannot be distinguished from the design defect claim.” Thus, the warning claim boils down to, or takes back to, the design defect claim. And we know how that turned out.
- Negligence and Products Liability
The complaint contained “inadequate factual allegations establishing causation. Absent plausible allegations linking the Defendants’ actions to the Plaintiff’s harms, there is no plausible claim for relief.” Well, okay then.
The plaintiff alleged both fraud and negligent misrepresentation, but the Lynch court correctly points out that there was no real difference between those claims. The negligent misrepresentation claim was replete with all sorts of intentionality. The court concluded that both claims needed specificity and both claims lacked it. The acts of the various defendants were jumbled together, and specifics on who, what, where, and when were wholly absent.
The plaintiff will get a chance to try again. The magistrate judge was perhaps a bit charitable. But she was also smart and careful, so the plaintiff had better do a much better job on the next go around.