The Learned Intermediary And Implied Warranties

In a relatively recent case, Currier v. Stryker Corp., 2011 WL 4898501 (E.D. Cal. Oct. 13, 2011), the court stated, with respect to a claim for implied warranty:

Because this is a medical implant case, and the [complaint] alleges that the product was surgically inserted in a hospital, the Court cannot plausibly infer from the [complaint] that Plaintiff relied on anything other than his physician's skill and judgment in selecting the . . . product, nor that any purchase of the product was based on a warranty from the manufacturer to Plaintiff. The Court cannot plausibly infer that there is a relationship between the Defendants and Plaintiff that would allow Plaintiff to state a breach of warranty claim.

Id. at *4. The court seems to be saying that, in a prescription medical product liability case, there can’t be an implied warranty claim unless the plaintiff, as opposed to the prescribing physician, relied on the alleged warranty.  That's useful.  We’re sure that this is to some extent grounded in the general California rule requiring privity in express warranty cases, but we thought we’d take a look and see what else may be out there.

The first place we checked, obviously, is the case that the court cites for the proposition, Adams v. I-Flow Corp., 2010 WL 13399488 (C.D. Cal. March 30, 2010), and sure enough, we find pretty much the same thing. “In the context of prescription medical devices and pharmaceuticals, the transaction is between the manufacturer and the physician, not the patient.”  Id. at *4.  The complaint was simply “devoid of any facts suggesting that plaintiffs relied upon anything other than their physicians' skill and judgment in selecting and prescribing the [drugs and devices].”  Id.

Both Currier and Adams cite another California case, Blanco v. Baxter Healthcare Corp., 70 Cal.Rptr.3d 566 (App. 2008), and there we find more of the same:

Here, there is no evidence [plaintiff] relied on [defendant manufacturer’s] judgment that the [product] was appropriate for her.  Rather, she relied on her physician’s skill and judgment to select the [product], as evidenced by the fact it was prescribed by a licensed physician. Accordingly, we conclude [plaintiff] cannot sue [defendant] for breach of implied warranties.

Id. at 582.  See also Evraets v. Intermedics Intraocular, Inc., 34 Cal. Rptr.2d 852, 857 (App. 1994) (no implied warranty claim where plaintiff “relied upon his physician's skill or judgment to select or furnish a suitable product”); Crayton v. Rochester Medical Corp., 2011 WL 475009, at *15-16 (E.D. Cal. Feb. 4, 2011) (no implied warranty where plaintiff “relied on the advice of his doctors”); Quatela v. Stryker Corp., ___ F. Supp.2d ___, 2010 WL 7801786, at *2 (N.D. Cal. Dec. 17, 2010) (“[plaintiff] necessarily relied on the judgment of the medical professionals who treated her”); McCarty v. Johnson & Johnson, 2010 WL 2629913, at *6 (E.D. Cal. June 29, 2010) (“Plaintiff relied on the advice of her doctor and the doctor chose the device”); Sherman v. Stryker Corp., 2009 WL 2241664, at *3 (C.D. Cal. March 30, 2009) (following Evraets); Chandler v. Chiron Corp., 1997 WL 464827, at *8 (N.D. Cal. July 28, 1997) (following Evraets).

Well, that pretty much kills California law.  Have any other states used the presence of a learned intermediary selecting prescription medical products and making prescriptions as a reason for barring implied warranty cases?

It comes up, or did, with some frequency in cases attempting to impose absolute liability on pharmacists.  That’s been rejected just about everywhere, and the rationales differ, but as to implied warranties, reliance on prescribing doctors is one of the biggies.  A North Carolina court held that physician reliance precluded warranty liability:

Here the drug purchased by plaintiff was not available to the general public in the sense that it was available for purchase by any customer who came in the drug store, selected it from the shelf, and paid the price therefor. It was available only to those who had previously seen their physician and obtained from the physician a prescription directing the druggist to supply the drug. Obviously the plaintiff patient did not rely on the druggist's skill or judgment in assuming that the drug would be fit for its intended purpose. This reliance had been properly placed with her physician.

Batiste v. American Home Products Corp., 231 S.E.2d 269, 276 (N.C. App. 1977).  See also McKee v. American Home Products Corp., 782 P.2d 1045, 1050 n.5 (Wash. 1989) (quoting Batiste with approval).

A New York case followed this same rationale, holding that there are no implied warranties because patients are relying on their physicians rather than on anybody else’s representations:

[I]mplied warranties are conditioned on the buyer’s reliance upon the skill and judgment of the seller but when a consumer asks . . . to obtain a drug which is not otherwise available to the public . . ., he places that confidence and reliance in the physician who prescribed the remedy. . . . [T]here is no cause of action for breach of any implied warranties.

Bichler v. Willing, 397 N.Y.S.2d 57, 59 (N.Y.A.D. 1977) (pharmacy case).  See also Ingram v. Hook's Drugs, Inc., 476 N.E.2d 881, 885-86 (Ind. App. 1985) (quoting with approval reliance language in Bichler and Batiste).

Texas seems to follow the same principle, at least where the implied warranty of fitness for a particular purpose is concerned.  This warranty, has an explicit causation/reliance requirement.  Thus, in Ackermann v. Wyeth Pharmaceuticals, 471 F. Supp.2d 739 (E.D. Tex. 2006), aff’d on other grounds, 526 F.3d 203 (5th Cir. 2008), the court held:

[T]here is no showing that [plaintiff] was relying on [defendant’s] skill or judgment.  To the contrary, he was relying on the skill and judgment of [the prescriber].  [The product], like most drugs, is also indicated for other disorders, therefore, it could not be said that [the defendant] would have reason to know of the particular purpose for which [the drug] would be used.  The Court concludes that Plaintiff may not prevail on her claims for breach of an implied warranty.

Id. at 745.

We found similar language in a Georgia case, albeit not as extensive, that there’s no implied fitness warranty where the plaintiff relied upon the prescribing physician rather than the drug manufacturer:

[B]ecause the patient is legally deemed to rely on the physician and not the package labeling for this warning, [plaintiffs] cannot show they were relying on the seller’s skill or judgment to select or furnish suitable goods, as is required to prove an implied warranty of fitness for a particular purpose.

Presto v. Sandoz Pharmaceuticals Corp., 487 S.E.2d 70, 75 (Ga. App. 1997).

An older case in Florida holds pretty much the same thing, again in an implied warranty of fitness case. The plaintiff patient simply didn’t rely on the drug company, but rather on her physician, in choosing a drug:

Obviously, the patient-purchaser did not rely upon the judgment of the retail druggist in assuming that the drug would be fit for its intended purpose. This confidence had been placed in the physician who prescribed the remedy.

McLeod v. W. S. Merrell Co., Division of Richardson-Merrell, Inc., 174 So.2d 736, 739 (Fla. 1965).  It’s good language, and like some of the decisions already discussed, is directed moslty against pharmacy strict liability.

A different sort of case arose in Delaware.  The court rejected an implied warranty of fitness claim for lack of reliance where the doctor (as opposed to the patient) didn’t rely:

[The prescriber] did not rely on [defendant’s] “superior skill” in selecting a [product] for a [surgical] procedure, because it was not “[defendant’s] place” to “practic[e] medicine” or decide for the doctor whether to use a particular [device]. Plaintiff proffers no evidence that [the prescriber – or anyone else – relied on [defendant’s] representations about the [product] in deciding whether to use [it].

Guinan v. A.I. duPont Hospital for Children, 597 F. Supp.2d 485, 514 (E.D. Pa. 2009) (applying Delaware law), rev’d on other grounds, 393 Fed. Appx. 884 (3d Cir. 2010).

So what can we say about reliance on prescribing physicians, as opposed to on product manufacturers, as a defense in implied warranty litigation? Well, it’s certainly dispositive in California.  It also looks quite strong in implied warranty of fitness for a particular purpose cases.  Elsewhere, we’d say there’s enough favorable precedent to support making the reliance argument against implied warranty claims, although we’d recommend making it in conjunction with other arguments to avoid making bad law.

Not Swallowing the Whistle

Last week we settled a case. It was a good settlement. But we groused about it a bit, because we thought the judge should have granted us summary judgment on preemption grounds. The denial of summary judgment was truly "summary." There was no written opinion at all, and the judge's few statements at the hearing hardly qualified as any sort of legal analysis. What was going on?

Then we took a look at a recent book, Scorecasting: The Hidden Influences Behind How Sports are Played and Games are Won, by Moskowitz and Wertheim. The book, in a manner reminiscent of Moneyball or Freakonomics, uses data to unearth some surprising truths, debunk a lot of conventional wisdom, and raise interesting questions. For example, there is no valid reason to believe that a player with a "hot-hand" will continue to score at will. Or, you probably know that home teams enjoy an advantage, but do you know when and why? Or -- and this is the topic of today's intellectual frolic and detour -- when and why do sports referees "swallow the whistle?"

Sports have rules and somebody's got to enforce them: umpires in baseball, referees in football, etc. When hockey games are in their final minutes or in overtime, referees don't call as many penalties. One of the all-time great examples in football is when the Giants upset the then-unbeaten Patriots in the Super Bowl. In the closing minutes of the game, David Tyree caught a pass against his helmet that some call the single greatest play in a championship game. But what some people forget is that Eli Manning threw that pass only after escaping the clutches of a Patriots lineman. In fact, Manning was in those clutches so long that, under the rules, he could (and people in Boston will howl that he should) have been called "in the grasp" and the play would have ended. So would the Giants' chances. History would have changed. But the referee didn't blow his whistle. He let the players decide the game. Similarly, Moskowitz and Wertheim analyze statistics from baseball, comparing umpire balls-and-strikes calls against a machine. It turns out that umpires are right way more than they are wrong, but their error rate goes way, way up in failing to call ball four or strike three. That is, the rules enforcers are seemingly reluctant to be outcome-determinative.

We wondered whether something like that happens in the law. Maybe our judge thought there ought to be some sort of settlement, even if the plaintiffs' case had certain legal and factual weaknesses. Granting us summary judgment would have knocked that out. Not granting summary judgment keeps the case alive and leaves open the possibility that the parties will reach agreement. In fact, we did. Maybe the judge thinks that rough justice was done. Or maybe the judge is just happy to have the case off the docket. (And we make no bones about our belief that it is pernicious and counterproductive for judges to shape their rulings to aid docket management rather than to follow the law. It's wrong and ultimately counterproductive.) Maybe judges sometimes swallow the whistle.

Unlike Moskowitz/Wertheim, we don't have data to back up that allegation. But if judges do swallow the whistle at crucial moments, we don't think it's at all benign. At least in sports, swallowing the whistle affects both sides equally. In the sort of litigation we do, it's almost always the defense side that files Daubert motions and summary judgment motions. So a judicial reflex against granting dispositive motions disproportionately hurts defendants. Moreover, sports referees swallow the whistle because they know that fans pay to see players, not refs, decide the game. The last time we looked, litigation was not a spectator sport and was not being conducted for the amusement of paying fans.

Anyway, these are just musings. The case is over and we're on to the next thing. But we'd be fascinated if anybody could assemble data and do a sort of Moneyball or Freakonomics or Scorecasting-type analysis on our business.

Today we report on a case where the referee did not swallow the whistle. In Barnhill v. Teva Pharmaceuticals USA Inc., 2011 U.S. Dist. LEXIS 51222 (S.D. Ala. May 10, 2011), the court granted summary judgment to the defendant and ended the case. The plaintiff went through "a stormy course of SJS" after taking cephalexin, a generic substitute for Keflex. Barnhill, 2011 U.S. Dist. LEXIS 51222 at *4. SJS is a bad disease, SJS plaintiffs are entirely sympathetic, and SJS cases are tough. By the time the defendant moved for summary judgment, the plaintiff had three remaining claims: (1) negligent failure to warn, (2) negligent failure to conduct post-marketing surveillance; and (3) breach of the implied warranty of merchantability. Id. at * 10.

The plaintiff claimed that the warning was inadequate "because the information about SJS was listed as an 'Adverse Reaction' rather than under 'Warnings'. Id. at * 17. Even assuming such inadequacy, the claim failed for want of proximate cause. There was simply no evidence that the prescribing doctor would have done anything different if the warning had been different. In fact, at the time of her deposition, which was ten years after the treatment at issue, the doctor continued to prescribe cephalexin. The plaintiff tried to prop her claim up via the heeding presumption, but "Alabama courts have not recognized such a presumption." Id. at * 20. In any event, a heeding presumption "would not alone establish proximate cause." Id. at *21. At this point the court relies on Thomas v. Hoffman-Laroche, Inc., 949 F.2d 806 (5th Cir. 1992), where the Fifth Circuit rejected the contention that causation can be presumed from an inadequate warning. This is the first discussion of Thomas we've seen in a while and is, as far as we know, the first use of Thomas in Alabama.

The court certainly puts Thomas to good use. "Heed" means that the learned intermediary would have incorporated the additional risk into the risk-benefit calculation, but there was no evidence that didn't happen here. And it's not as if the plaintiff pointed to some bit of missing information. It was an issue of where the information resided in the label. "Stated differently, the warning label was not wrong, it simply was not forceful enough. Because there is no evidence that a more forceful warning would have changed Dr. Jaalouk's decision to prescribe cephalexin, Plaintiff has failed to establish proximate cause." Id. at * 22.

The plaintiff's claim for negligent failure to conduct post-marketing surveillance evolved. At first, the defendant read that claim the way most of us would, and responded with evidence showing that the defendant followed FDA regulations requiring the reporting of adverse events for its drug. It fulfilled whatever post-marketing surveillance duty it had. But the plaintiff argued that the defendant was negligent because it "did not track the adverse event experience of other cephalexin manufacturers." Id. at * 24 (emphasis in original). There is no such duty. So much for that claim.

Finally, the breach of implied warranty of merchantability claim turned on dicta in an Alabama Supreme Court decision. Alabama law generally does not recognize a cause of action for breach of implied warranty of merchantability for inherently dangerous products. The issue is whether there's an exception for products that affect a "significant number of persons." Id. at * 25. Well, maybe there is and maybe there isn't? (Guess which way we vote.) But it doesn't matter because it doesn't look like there have been more than two cases of SJS-from-cephalexin in the United States from 1992 to 2008. The plaintiff offered an unreliable study and some bad math to suggest a bigger number, but the court didn't buy it. Id. at * 26-27.

In short, the court blew the whistle.