Opinion
CASE NO. 3:21-cv-05854-BHS
2022-07-29
William HUNT, Jr., Plaintiff, v. MEDTRONIC USA, INC., Defendant.
Spencer D. Freeman, Freeman Law Firm Inc., Tacoma, WA, for Plaintiff. Anna Yeung, Pro Hac Vice, Kate Wittlake, Pro Hac Vice, Greenberg Traurig LLP, San Francisco, CA, Kelly H. Sheridan, Steven W. Fogg, Corr Cronin LLP, Seattle, WA, Victoria Davis Lockard, Pro Hac Vice, Greenberg Traurig LLP, Atlanta, GA, for Defendant.
Spencer D. Freeman, Freeman Law Firm Inc., Tacoma, WA, for Plaintiff. Anna Yeung, Pro Hac Vice, Kate Wittlake, Pro Hac Vice, Greenberg Traurig LLP, San Francisco, CA, Kelly H. Sheridan, Steven W. Fogg, Corr Cronin LLP, Seattle, WA, Victoria Davis Lockard, Pro Hac Vice, Greenberg Traurig LLP, Atlanta, GA, for Defendant. ORDER BENJAMIN H. SETTLE, United States District Judge
This matter comes before the Court on Defendant Medtronic USA, Inc.'s Motion to Dismiss, Dkt. 25. Plaintiff William Hunt, Jr. was implanted with a Medtronic Spinal Cord Stimulator ("SCS") in 2017 to help treat pain he suffered as a result of his Ehlers-Danlos Syndrome. Hunt alleges that the SCS he received was different and inferior to the one Medtronic advertised to him and that Medtronic failed to adjust and eventually approve removal of the device. As a result, Hunt argues that Medtronic breached its contract with him, violated Washington's Consumer Protection Act, and was negligent. Medtronic moves to dismiss the complaint, arguing that Hunt's claims are preempted and implausible as pled. The Court has considered the briefing filed in support of and in opposition to the motion and grants in part and denies in part the motion for the reasons below.
I. BACKGROUND
Hunt suffers from a condition called Ehlers-Danlos Syndrome which causes him to experience significant joint pain, along with other issues. Dkt. 21, ¶ 5. In 2017, a doctor at Electrical and Musculoskeletal Associates of Puget Sound ("EMA") presented Hunt with a Medtronic SCS, which is a medical device that is implanted into a person's back and delivers small electrical signals which inhibit pain signals to the brain, thereby reducing pain. Id. ¶ 6. EMA had a contract with Medtronic to promote and sell the SCS. Id. ¶ 8.
EMA set up a meeting between Hunt and a Medtronic representative, Austin Carl, to discuss the SCS. Id. ¶¶ 10, 11. According to Hunt, Carl promoted, explained, and sold the SCS to him. Id. ¶ 11. Carl showed Hunt SCS model 97714 which was controlled by a tablet with 28 settings, allowing for thousands of combinations of location and intensity of the electrical impulses. Id. ¶¶ 13, 14, 18. Dr. Beno Kuharich at The Doctors Clinic in Silverdale, Washington implanted the device into Hunt in October 2017. Id. ¶ 20. Instead of receiving model 97714 with 28 settings, thousands of combinations, and a tablet, Hunt received model 97715 with three settings, a few combinations, and a remote. Id. ¶¶ 18, 30, 31. Carl provided the SCS and was present for Hunt's surgery. Id. ¶¶ 25, 26. Another Medtronic representative, Erin Offner Thomas, activated the device. Id. ¶ 29.
Carl also represented to Hunt that Medtronic representatives and doctors would be available to him to assist with the functioning of the SCS. Id. ¶ 22. Hunt had various issues with the SCS after it was implanted. In December 2017, he had the adaptive stim turned off because it was repeatedly shocking him when he would sit or stand. Id. ¶ 34. In April 2018, he asked Medtronic to remove the device. Id. ¶ 35. Medtronic refused but turned the device off, which caused Hunt pain, so he asked for it to be turned back on. Id. ¶¶ 36, 37. He had the device reprogrammed by Medtronic multiple times. Id. ¶¶ 38, 39.
"Adaptive stim" is never defined in Hunt's complaint and it is unclear whether it refers to the whole device or just a part of it.
In December 2019, Hunt got into an automobile accident during which he experienced a jolt up his spine to his skull. Id. ¶ 45. After the accident, another Medtronic representative, Stephanie Peterson, reprogrammed the SCS without the oversight of a Medtronic trained physician. Id. ¶ 47. She did so even though there was concern that the SCS device leads had shifted during the accident. Id.
Hunt also claims that the SCS deteriorated over time. Id. ¶ 52. He claims that by March 2021, the SCS "was sending shocks into [his] spine such that his body continually convulsed." Id. He requested various accommodations from Medtronic, including access to the tablet and 28 settings, daily calibrations, shutting down the device, and removal of the device. Id. ¶¶ 53, 54, 56, 57. Medtronic refused all of those requests. Id. Ultimately, Hunt found an independent doctor to remove the SCS. Id. ¶ 57.
Hunt sued Medtronic in Pierce County Superior Court in 2021, Dkt. 1-1, and Medtronic removed the case to this Court, Dkt. 1. Hunt first alleges that he was a third-party beneficiary to contracts between Medtronic and EMA, Dr. Kuharich, or The Doctors Clinic and that Medtronic breached those alleged contracts by failing to provide the device they represented he would receive and failing to properly service the implanted device. Id. ¶¶ 59-67. He also alleges that Medtronic was a third-party beneficiary to the purchase agreement for the SCS he purchased, and he argues that Medtronic therefore owed him contractual duties. Id.
Hunt next alleges that Medtronic "engaged in unfair and/or deceptive practices" and that those practices "impact[ed] the public's interest" in violation of Washington's Consumer Protection Act ("CPA"), RCW 19.86.010 et seq. Id. ¶¶ 68-72. Hunt lastly alleges that Medtronic was negligent in that it owed him a duty to service his device with reasonable care based on its promises and representations, that it breached that duty after his accident, and that he suffered significant injury as a result. Id. ¶¶ 73-78.
Hunt seeks actual or statutory damages, an injunction to prevent Medtronic from engaging in similar conduct in the future, general damages, medical and related expenses, and attorneys' fees and costs. Id. at 10.
Medtronic moves to dismiss Hunt's complaint, arguing that his CPA and negligence claims are expressly preempted by federal law because the SCS is subject to premarket approval. Dkt. 25. It argues that his breach of contract claim fails because there is no valid contract, and that his CPA claim fails because he failed to allege necessary elements. Id. Medtronic argues that Hunt's his negligence claim fails because it is preempted by the Washington Products Liability Act ("WPLA") and because he failed to allege that Medtronic breached a duty. Id. Hunt argues that both federal and state preemption are inapplicable in this case, that he is a third-party beneficiary of Medtronic's contracts, and that he properly pled all three claims. See Dkt. 28.
II. DISCUSSION
A. Legal Standard
Dismissal under Federal Rule of Civil Procedure 12(b)(6) may be based on either the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1988). A plaintiff's complaint must allege facts to state a claim for relief that is plausible on its face. See Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). A claim has "facial plausibility" when the party seeking relief "pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. Although the Court must accept as true the complaint's well-pled facts, conclusory allegations of law and unwarranted inferences will not defeat an otherwise proper Rule 12(b)(6) motion to dismiss. Vasquez v. Los Angeles Cnty., 487 F.3d 1246, 1249 (9th Cir. 2007); Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). "[A] plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (citations and footnotes omitted). This requires a plaintiff to plead "more than an unadorned, the-defendant-unlawfully-harmed-me-accusation." Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (citing Twombly, 550 U.S. at 555, 127 S.Ct. 1955.).
On a 12(b)(6) motion, "a district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts." Cook, Perkiss & Liehe v. N. Cal. Collection Serv., 911 F.2d 242, 247 (9th Cir. 1990). However, where the facts are not in dispute, and the sole issue is whether there is liability as a matter of substantive law, the court may deny leave to amend. Albrecht v. Lund, 845 F.2d 193, 195-96 (9th Cir. 1988).
B. Federal Preemption
Medtronic argues that Hunt's CPA and negligence claims are expressly preempted by the Medical Device Amendments of 1976 ("MDA") under Riegel v. Medtronic, Inc., 552 U.S. 312, 317, 128 S.Ct. 999, 169 L.Ed.2d 892 (2008). Dkt. 25 at 10. Hunt argues that while the MDA preempts claims about the safety or effectiveness of devices that have gone through premarket approval, it does not preempt claims like the ones in this case where the plaintiff is alleging the defendant engaged in unfair business practices by making misrepresentations about the device and the services available after implantation of the device. Dkt. 28 at 5-6.
Riegel laid out a two-part framework for determining whether a claim is preempted by § 360k. First, the Court "must determine whether the Federal Government has established requirements applicable to [the device]," and if so, the Court must determine whether the claim is based on state law requirements that are " 'different from, or in addition to,' the federal ones, and that relate to safety and effectiveness." Riegel, 552 U.S. at 321-22, 128 S.Ct. 999 (quoting § 360k(a)).
"Premarket approval . . . imposes 'requirements' under the MDA." Riegel, 552 U.S. at 322, 128 S.Ct. 999. Medtronic's SCS is an "FDA Class III Premarket Approved ('PMA') prescription medical device." Dkt. 25 at 2. Therefore, whether Hunt's claims are preempted turns on whether his claims are based on different or additional safety or effectiveness state law requirements.
All of Hunt's claims are based on Medtronic allegedly making false representations to Hunt. He argues that Medtronic sold him a different product than the one he bargained for, and that Medtronic made assurances about servicing the device and failed to follow through. None of those theories relate to state rules or requirements different from the federal premarket approval process.
Hunt's CPA and negligence claims are not preempted by the MDA and Medtronic's Motion to Dismiss on that theory is DENIED.
C. Breach of Contract
Hunt alleges that Medtronic breached two different contracts. First, he alleges that he is a third-party beneficiary of a contract entered into between Medtronic and either EMA, Dr. Kuharich, or The Doctors Clinic. Dkt. 21, ¶¶ 60-62. Second, he alleges that Medtronic was a third-party beneficiary of his own purchase agreement with EMA, Dr. Kuharich, or The Doctors Clinic. Id. ¶¶ 63-65. He argues that these alleged contracts imposed duties on Medtronic "to provide the represented device for implant, [to] provide access to all 28 settings [of] the SCS device as represented," and to properly service the implanted device. Id. ¶¶ 62, 65.
Medtronic argues that Hunt failed to adequately plead that a contract existed or that he was a third-party beneficiary to any contract involving Medtronic. Dkt. 25 at 13-14. Medtronic also argues that even if it was a third-party beneficiary to Hunt's purchase agreement, a contract cannot impose obligations on a third-party beneficiary. Id. at 14-15. Hunt argues that it is common sense that Medtronic entered into a contract with at least one of his providers, that he is a third-party beneficiary of that contract, and that the Court must assume that fact is true. Dkt. 28 at 9-10.
As an initial matter, Medtronic is correct that contracting parties cannot impose obligations on a third-party beneficiary. Thus, even if Medtronic was a third-party beneficiary to a contract between Hunt and his providers, that contract could not impose obligations on Medtronic. That claim fails. Therefore, Hunt's breach of contract claim can only survive if he is a third-party beneficiary to a contract involving Medtronic.
"A third-party beneficiary contract exists when the contracting parties, at the time they enter into the contract, intend that the promisor will assume a direct obligation to the claimed beneficiary." Warner v. Design & Build Homes, Inc., 128 Wn. App. 34, 43, 114 P.3d 664 (2005). Whether the parties intended the contract to benefit a third-party beneficiary depends on if "performance under the contract necessarily and directly benefits the third party." Id. "An incidental, indirect, or inconsequential benefit to a third party is insufficient to demonstrate an intent to create a contract directly obligating the promisor to perform a duty to a third party." Id. The examining court should evaluate "the terms of the contract to determine whether performance under the contract would necessarily and directly benefit the [plaintiff]." Kim v. Moffett, 156 Wn. App. 689, 701, 234 P.3d 279 (2010).
Hunt has not provided sufficient information or allegations to state a breach of contract claim. While it is plausible—even likely—that Medtronic entered into contracts with some or all of Hunt's providers, the content of those contracts is unknown. It is possible that Hunt's providers purchased the SCS from Medtronic specifically for Hunt. It is just as possible that Hunt's providers purchased the SCS from Medtronic prior to Hunt even seeking treatment. The claim is therefore implausible as pled.
The Court therefore GRANTS Medtronic's Motion to Dismiss on Hunt's breach of contract claim. Nevertheless, Hunt may be able to bring a plausible claim based on a third-party beneficiary theory. Granting him leave to amend at this juncture would be neither prejudicial nor futile. Therefore, the Court will grant him leave to amend his breach of contract claim.
D. Washington Consumer Protection Act
Medtronic argues that Hunt's CPA claim should be dismissed because Hunt failed to adequately plead that his claim "impacts the public interest or is limited to business or property damages." Dkt. 25 at 15. Medtronic further argues that Hunt did not establish the causation element. Id. Hunt argues that he sufficiently alleged that Medtronic's practices have the potential to harm the public. Dkt. 28 at 10-11. He also argues that he sufficiently alleged business or property damages because his claim is that he was sold a device based on Medtronic's misrepresentations. Id. at 11-12. Finally, he argues that Medtronic's causation element is inappropriate at this juncture because it is essentially arguing that the weight of the evidence weighs against Hunt. Id. at 12. Medtronic replies that Hunt's allegation that Medtronic has a practice of training its representatives to misrepresent its products is implausible and unsupported. Dkt. 29 at 5. It also argues that Hunt's claimed damages under the CPA are illusory because he kept and used the SCS long after he learned it was not the same one he believed he was purchasing. Id. 5-6.
A plaintiff must establish five elements to state a prima facie CPA claim: "(1) unfair or deceptive act or practice; (2) occurring in trade or commerce; (3) public interest impact; (4) injury to plaintiff in his or her business or property; (5) causation." Ambach v. French, 167 Wn.2d 167, 171, 216 P.3d 405 (2009) (en banc). The definition of property "does not include rights to one's person or body." Id. at 172, 216 P.3d 405. Personal injury damages are not compensable under the CPA. Id. at 173, 216 P.3d 405. If a plaintiff is physically and economically injured by the same act, courts generally will not find a CPA violation.
In contrast, Washington courts have upheld CPA claims regarding deceptive marketing and advertising that are separate from personal injury claims. In Williams v. Lifestyle Lift Holdings, Inc., 175 Wn. App. 62, 302 P.3d 523 (2013), the Washington Court of Appeals held that the plaintiff's CPA claim against a surgery promoter were separate from any personal injury claims because the CPA claim focused on the promoter's misrepresentations which convinced him to receive the surgery. The claim did not depend on a poor surgical outcome that could be the subject of a malpractice claim. Similarly, in Wright v. Jeckle, 104 Wn. App. 478, 16 P.3d 1268 (2001), the Washington Court of Appeals held that the plaintiff could bring an independent action against his doctor for marketing and selling diet drugs for entrepreneurial purposes, not health care.
Hunt's CPA claim focuses on Medtronic representatives' and his providers' advertising and sale of the SCS. Even absent personal injury, taking Hunt's version of events as true, he could still plausibly assert a CPA claim. Hunt's allegation that Medtronic advertised and made representations to him about an SCS with 28 settings and a tablet, and subsequently sold him an SCS with three settings and a remote is sufficient to allege a CPA injury to property. The remaining question, then, is whether Hunt plausibly alleges injury to the public.
An alleged unfair or deceptive act or practice injures the public under the CPA if it: "(1) [v]iolates a statute that incorporates [the CPA]; (2) [v]iolates a statute that contains a specific legislative declaration of public interest impact; or (3)(a) [i]njured other persons; (b) had the capacity to injure other persons; or (c) has the capacity to injure other persons." RCW 19.86.093. The Court considers a number of factors in determining whether the public has an interest:
(1) Were the alleged acts committed in the course of defendant's business? (2) Are the acts part of a pattern or generalized course of conduct? (3) Were repeated acts committed prior to the act involving plaintiff? (4) Is there a real and substantial potential for repetition of defendant's conduct after the act involving plaintiff? (5) If the act complained of involved a single transaction, were many consumers affected or likely to be affected by it?Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 105 Wn.2d 778, 790, 719 P.2d 531 (1986) (en banc).
Hunt alleges in his amended complaint that "[u]pon information and belief, Medtronic makes the same sales pitch [that he received] to other potential customers, including a promise or representation that a device with access to 28 of (sic) different settings, or other similar number, with thousands of combinations for the potential customer to control." Dkt. 21, ¶ 23.
Medtronic's alleged actions in this case were committed in the course of its business. Hunt alleges, though somewhat conclusory, that Medtronic's acts were part of a pattern of conduct. There is certainly potential for repetition, though, as these alleged acts occurred in the course of Medtronic's business and Medtronic representatives have access to patients receiving the SCS (and presumably other Medtronic medical devices). On the other hand, this was a private consumer transaction that only directly affected Hunt himself and it is unclear whether any of the alleged other acts took place prior to Hunt's personal allegations in this case. Nevertheless, the balance of the factors weigh in Hunt's favor. Taking his allegations as true, other consumers are at risk of falling victim to Medtronic's misrepresentations about the SCS and other medical devices.
Finally, there is not a causation issue at this juncture. Taking Hunt's allegations as true, Medtronic's misrepresentations caused him injury because he was implanted with a different device than he was promised.
Hunt stated a plausible CPA claim, and the Court therefore DENIES Medtronic's Motion to Dismiss on that theory.
E. Negligence
Along with its argument that Hunt's negligence claim is preempted under federal law, which was addressed above, Medtronic argues that Hunt's negligence claim is preempted by the Washington Products Liability Act ("WPLA"). Dkt. 25 at 17-18. Hunt argues that his claim is not preempted by the WPLA because he is not alleging that Medtronic was negligent in designing or manufacturing the SCS, or warning Hunt about the SCS, but rather that Medtronic breached its duty to service and operate the SCS with reasonable care and that he suffered damages as a result. Dkt. 28 at 6-8; see also Dkt. 21, ¶¶ 73-78.
The WPLA "creates a single cause of action for product-related harms that supplants previously existing common law remedies." Wash. Water Power Co. v. Graybar Elec. Co., 112 Wn.2d 847, 860, 774 P.2d 1199 (1989). The WPLA's statutory cause of action preempts all product liability claims, which includes claims "for harm caused by the manufacture, production, making, construction, fabrication, design, formula, preparation, assembly, installation, testing, warnings, instructions, marketing, packaging, storage or labeling of the relevant product." RCW 7.72.010(4). Services are not "products" under the WPLA. See RCW 7.72.010(3); see also Berschauer/Phillips Const. Co. v. Seattle School Dist. No. 1, 124 Wn.2d 816, 822 n.1, 881 P.2d 986 (1994) (en banc) ("Architectural services, engineering services, and inspection services are not 'products' under the WPLA.").
Hunt's negligence claim is not preempted by the WPLA. He asserts that Medtronic owed him a duty to service his SCS, breached that duty by refusing to service and eventually remove the device, and that such omissions caused him harm. See Dkt. 21, ¶¶ 73-78. Unlike the cases cited by Medtronic, Hunt does not allege that Medtronic negligently designed or manufactured the SCS, nor that it failed to properly warn him. He sought services from Medtronic and was denied those services. The requested services are not a "product" under the WPLA, and this is not a products liability claim under the WPLA. Therefore, it is not preempted.
Medtronic also argues that Hunt failed to state a negligence claim because he does not plausibly allege that Medtronic owed him a duty and that, even if it did owe him a duty, he does not plausibly allege that it breached that duty. Dkt. 25 at 19. Specifically, Medtronic argues that it could not have breached any such duty as it serviced Hunt's device numerous times. Id. Hunt argues that he plausibly alleged that Medtronic owed him a duty of care after the SCS was implanted in him, that it breached that duty by failing to properly service it, and that such breach proximately caused him harm. Dkt. 28 at 12-13.
Hunt plausibly alleges that Medtronic owed him a duty of care. His amended complaint asserts that Medtronic owed him a duty because of the relationship between himself and Medtronic and because Medtronic made promises and representations to him. Dkt. 21, ¶ 74. He alleges facts that support the plausibility of that claim, such as that a Medtronic representative told him that "Medtronic would ensure that their personnel and/or certified Medtronic doctors would be available to assist Hunt with the functioning of the device" and that he relied on those representations in deciding to purchase the device. Id. ¶ 22.
While it is true that Medtronic reprogrammed Hunt's SCS multiple times, Hunt also alleges that Medtronic failed or refused at other times to reprogram or remove the device. For example, he alleges that in April 2018, he requested to have the device leads removed but Medtronic refused and instead turned it off. Dkt. 21, ¶ 36. He also alleges that a Medtronic representative reprogrammed the device after his car accident without guidance from a trained physician, even though that representative believed the device had shifted in his body during the accident. Id. ¶ 47. He further alleges that Medtronic refused him daily calibrations and again refused removal. Id. ¶¶ 54, 57.
While it is certainly not a forgone conclusion that Medtronic breached a duty of care owed to Hunt, Hunt has stated a plausible negligence claim. Therefore, the Court DENIES Medtronic's Motion to Dismiss on that theory.
III. ORDER
Therefore, it is hereby ORDERED that Defendant Medtronic USA, Inc.'s Motion to Dismiss, Dkt. 25, is GRANTED in part and DENIED in part. Hunt's breach of contract claim against Medtronic is DISMISSED without prejudice. Hunt may file an amended complaint by September 2, 2022.