In Kinetic Co. v. Medtronic, Inc., No. 08-CV-6062, slip op. (D. Minn. April 19, 2011), a third-party payer filed suit over a recalled implantable cardiac defibrillator ("ICD"). In a classic example of "no good deed goes unpunished," after Medtronic went above and beyond the terms of the recall, by both withdrawing the device from the market and offering to pay patients to replace it, and got sued by the TPP plaintiff for not also paying it - in other words, for not paying for everything twice because the TPP never sought to get the money that Medtronic paid patients. Ironically, the TPP's double-dipping claim was all that survived.
That's because Medtronic won - yet again - on preemption, and on judgment on the pleadings (meaning no discovery expense). In so doing it effectively wiped from the books one of the worst pre-Riegel preemption decisions around, In re Medtronic, Inc. Implantable Defibrillators Litigation, 465 F. Supp.2d 886 (D. Minn. 2006), against which we railed in one of our earliest posts. See Kinetic, slip op. at 3 n.3 (refusing to give earlier Medtronic case collateral estoppel effect because of subsequent, controlling preemption authority).
Most of the TPP's claims were the same sorts of claims we've seen in similar suits across the country. TPP claims are nothing if not redundant. Here, they were: (1) false advertising, (2) deceptive trade practices, (3) consumer fraud under Minnesota law, (4) consumer fraud under every other state's law, (5) unjust enrichment, (6) breach of express warranty, (7) breach of implied warranty, (8) breach of "assumed" contractual obligation, and (9) misrepresentation by omission. Slip op. at 2-3.
Number eight was the only claim that survived. The others were various ways of repackaging claims that the defendant should have changed its warnings about the device in some way not required by the FDA. That kind of claim was blatantly preempted under Riegel and Sprint Fidelis, because "different from or in addition to" means what it says. Slip op. at 6-7. Since the TPP "admits that there is no federal requirement to disclose this information," express preemption followed as a matter of course. Id. at 6.
The TPP complaint also contained some vague allegations that some sort of misrepresentations were made to the FDA. But that didn't work because there's no independent state duty to make truthful statements to federal agencies - thus the claim was a bare FDCA violation claim that went down under Buckman:
But to avoid being impliedly preempted under Buckman, a claim must rely on traditional state tort law which had predated the federal enactments in question. In other words, the conduct on which the claim is premised must be the type of conduct that would traditionally give rise to liability under state law - and that would give rise to liability under state law even if the FDCA had never been enacted. Obviously, a claim premised on a defendant’s violation of an FDA regulation requiring that information be reported to the FDA is not a claim that would give rise to liability under state law even if the FDCA had never been enacted. It is, instead, simply an attempt by private parties to enforce the MDA - an attempt that is preempted under Buckman.Slip op. at 6-7 (citations and quotation marks omitted). It's a really good quote, so remember and use it. The court pithily summarized the Buckman half of "parallel" claims - that there must be something in state law for the purported violation claim to be parallel to, otherwise it's just a prohibited attempt at private FDCA enforcement.
The warranty claims go the same way, since - as usual - they're not based on anything specific, but only on general allegations that a device is "safe" - which would require a jury to find the opposite - which runs straight into a preemption brick wall. Slip op. at 7-8.
Plaintiff also made the "I need discovery" pitch, but not very well. Since the TPP claims didn't even come close to avoiding preemption, the plaintiff was not entitled to raise the nuisance value of the case by putting the defendant through the cost of discovery. Another good quote coming:
[Plaintiff] misunderstands the purpose of discovery. A plaintiff is permitted to take discovery to find evidence to support a properly pleaded claim for relief; a plaintiff is not permitted to take discovery to fish for claims of which it is not aware. Because the misrepresentation, express-warranty, and unjust-enrichment claims pleaded by [plaintiff] are clearly preempted . . ., [plaintiff] is not entitled to take discovery on those claims.Slip op. at 8.
Thus there's good law on parallel claims, express warranty, and discovery all in the same case.
As we mentioned above, the only thing left was the TPP's attempt to punish the defendant for voluntarily doing more than the law required it to. But the TPP's "pay twice" claim isn't preempted (the only basis of the motion) because it doesn't relate to anything the FDA required the defendant manufacturer to do:
[Plaintiff] is alleging that [defendant] promised patients in whom the devices had been implanted that [defendant] would pay certain costs associated with removing and replacing the devices. [Plaintiff] apparently alleges that, by not making such payments to third-party payors (such as [plaintiff]), [defendant] breached the promise that it made to patients. At oral argument, [defendant] conceded that [this claim] has nothing to do with the safety or effectiveness of the devices and thus is not preempted.Slip op. at 9.
Still, we don't think the "pay twice" claim ultimately goes anywhere, because either the TPP has a contractual right to get moneys paid to its subscribers back or it doesn't. Either it hasn't exercised an existing contractual right, in which case the TPP should lose, or it doesn't have the right, in which case the TPP has no basis for claiming to be a third-party beneficiary.
It's another nice preemption win for Medtronic, that we all can use to our advantage. We can only hope that the rest of us don't screw up the good law that Medtronic keeps making.