Opinion
CASE NO. 1:06-CV-526.
February 5, 2008
REPORT AND RECOMMENDATION ON MOTION TO DISMISS
The District Court referred this matter to the undersigned United States Magistrate Judge, at Beaumont, Texas, for consideration of pretrial motions and proceedings and/or entry of a report and recommendation on dispositive motions pursuant to 28 U.S.C. § 636(b) and the Local Rules for the Assignment of Duties to United States Magistrate Judges. Defendant Wright Medical Technology, Inc.'s Motion to Dismiss §§ IX and X of Plaintiff's Amended Petition or, In the Alternative, Motion for a More Definite Statement [Clerk's doc. #29, 30] is pending before the Court.
BACKGROUND
A. Plaintiff's Claims
Plaintiff Terry Scott filed this civil action seeking recovery for personal injuries he allegedly sustained from the implantation of a medical device after he underwent hip replacement and resurfacing surgeries. In the live pleading, Plaintiff alleges that he was implanted with defective medical devices during the course of artificial hip implantation surgeries, specifically including Simplex P. Radioplaque Bone Cement ("Simplex") and a femoral component, and that he has suffered damages in the form of pain, emotional distress, loss of earnings, loss of earning capacity, and medical expenses. He has generally asserted causes of action sounding under products liability based upon the allegedly defective implants, including specific claims for strict products liability, breach of warranty, negligence, strict liability for failure to warn, misrepresentation and malice and fraud. According to the pleadings and motions, Defendant Wright Medical Technology Inc. ("Wright Medical") is the manufacturer of the separate femoral component allegedly used in Mr. Scott's implantation — a Conserve Femoral Resurfacing Component — allegedly implanted in the Plaintiff, while MTG is the alleged manufacturer and seller of the Simplex.
Plaintiff originally filed his claims in the 136th Judicial District Court of Jefferson County, Texas. The Defendants removed the case to this court on August 31, 2006, based upon federal diversity jurisdiction. See Notice of Removal [Clerk's doc. #1]. After Defendant Wright Medical Technology filed a motion to dismiss, the District Court directed Plaintiff to re-plead his complaint to comply with Federal Rule of Civil Procedure 9(b). On May 22, 2007, Plaintiff filed his amended petition, which is the live pleading before the Court. Defendant Wright Medical Technology Inc. again responded to that pleading with the instant motion to dismiss some of Plaintiff's claims and a motion for a more definite statement filed pursuant to Federal Rules of Civil Procedure 9 and 12.
The MTG Defendants separately filed a motion for summary judgment based upon preemption of Plaintiff's claims. Because MTG's motion involves separate issues, different Defendants, and another product, the Court will issue a separate report and recommendation on that motion. Defendant Wright Medical also recently filed a motion for summary judgment on the merits of Plaintiff's claims. The Court will also take that motion under consideration once the briefing is completed and the motion is ripe.
Specifically at issue for purposes of the instant motion to dismiss and/or for more definite statement are Sections IX and X of the Plaintiff's Amended Petition. Section IX sets forth a claim for misrepresentation against all Defendants, alleging that the Defendants made representations of material facts concerning the character and quality of the products at issue. See First Amended Petition [Clerk's doc. #27]. Section X sets forth a claim for malice and fraud, contending that the Defendants allegedly made misleading and material representations to Plaintiff with the intent that Plaintiff acted on those misrepresentations. Id. Defendant Wright Medical's motion to dismiss seeks dismissal under Rule 9(b) of these claims only.
As for the remainder of any claims asserted by Plaintiff against Wright Medical, those are not subject to the motion to dismiss. As stated above, Wright Medical also recently filed a motion for summary judgment, seeking judgment on the merits of all of Plaintiff's claims.
B. Motion and Corresponding Briefs
Defendant Wright Medical's motion to dismiss argues that Sections IX and X of Plaintiff's Amended Petition should be dismissed because he has failed to plead his claims for malice/fraud and misrepresentation with sufficient particularity in accordance with Federal Rule of Civil Procedure 9(b). Defendant argues that Plaintiff's pleading does not set forth the specific knowledge of fraud or misrepresentation on the part of Wright Medical as required by Rule 9(b).
In the motion, the Defendant maintains that Plaintiff should not be granted leave to amend his petition because the Court has already afforded him two opportunities to correct deficiencies in his pleading, namely with respect to his fraud claims. The Defendant alternatively submits, however, that if the Court denies its motion on the dismissal grounds and allows Plaintiff to re-plead his claims, they should still be dismissed with leave to provide a more particular circumstances constituting the alleged fraud and misrepresentation. The Court perceives this final alternative argument in Defendant's motion as the motion for more definite statement in accordance with Federal Rule of Civil Procedure 12(e).
After being ordered to do so by the District Court, the Plaintiff filed a response in opposition to the motion to dismiss and for more definite statement. See Plaintiff's Response to Defendant Wright Medical Technology, Inc.'s Motion to Dismiss § IX and § X of Plaintiff's Amended Petition [Clerk's doc. #47]. In the response, Plaintiff argues that he has stated a claim upon which relief can be granted, contending that he may generally plead Defendant's knowledge of the truth and intent to deceive and that Rule 9(b) does not require him to plead misrepresentation with particularity. He contends that Defendant's actions in distributing literature to the public and to Plaintiff about the fitness of its products establishes that Defendant intended Plaintiff to rely upon this information to his detriment. Plaintiff alternatively argues that documentation regarding particular information relating to statements made by Defendant are in Defendant's possession, and he relatedly asks the Court to either deny the motion or defer ruling until Plaintiff can obtain that information through discovery.
See Order to Plaintiff to File Responses [Clerk's doc. #41].
The Defendant responded to the Plaintiff's arguments with a reply in support of its motion. See Reply [Clerk's doc. #50]. In its reply, Defendant Wright Medical points out that the Plaintiff was previously ordered by the District Court to re-plead his fraud or misrepresentation claims as required by Rule 9(b). See Order [Clerk's doc. #2]. Plaintiff's response to that directive from the District Court is the live Amended Petition at issue here, which the Defendant argues still does not comply witht the required standard and the District Court's order directing him to re-plead. Defendant further contends that Plaintiff's request that he be allowed to conduct further discovery on the fraud-based claims is impermissible under the higher pleading standard. See Reply, at p. 3. Finally, Defendant replies that Plaintiff's assertion that Rule 9(b) does not require misrepresentation to be pled with particularity is baseless in accordance with the law governing pleading specificity of these claims.
DISCUSSION
A. Rule 9(b), General Pleading of Special Matters, and Dismissal
Federal Rule of Civil Procedure 9(b) states that "in all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity. Malice, intent, knowledge, and other condition of mind of a person may be averred generally." FED.R.CIV.P. 9(b). As with notice pleading under Rule 8(a), this requirement for specificity affects the Court's ruling on motions to dismiss or for a more definite statement. 2 JAMES WM. MOORE ET AL., MOORE'S FEDERAL PRACTICE, ¶ 12-16 (3d ed. 2006).
In Swierkiewicz v. Sorema N.A., Justice Thomas explained Federal Rule of Civil Procedure 8(a) by reminding us that a complaint must include only a "short and plain statement of the claim showing that the pleader is entitled to relief." 534 U.S. 506, 512 (2002) (quoting FED. R. CIV. P. 8(a)(2)). This simplified pleading standard applies to all civil actions, with limited exceptions. Id. at 513. Those exceptions include pleading a special matter under Federal Rule of Civil Procedure 9. See FED. R. CIV. P. 9. See also Swierkiewicz, at 513.
The particularized pleading requirements of Rule 9(b) do not supplant the notice pleading standard of Rule 8. See MOORE'S, at ¶ 9.03[7], Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512 (2002). Courts should read the rules together, to harmonize the specificity requirements of Rule 9 with the liberal pleading policies of Rule 8. MOORE'S, at ¶ 9.03 (citations omitted). At the same time, the greater particularity required by Rule 9(b) in all averments of fraud or mistake is not lessened by the simple requirements of Rule 8. See, e.g., Swierkiewicz, at 513.
Rule 9(b)'s clear intent is to eliminate fraud actions in which all the facts are learned through discovery after the complaint is filed. See Friedlander v. Nims, 755 F.2d 810, 813 n. 3 (11th Cir. 1985). This is because Rule 9(b) exists to eliminate "general, unsubstantiated charges of fraud that can do damage to a defendant's reputation." Shushany v. Allwaste, Inc., 992 F.2d 517, 521 (5th Cir. 1993) (citing Guidry v. Bank of LaPlace, 954 F.3d 278, 288 (5th Cir. 1988)).
At a minimum, Rule 9(b) requires allegations of the particulars of "time, place, and contents of the false representations, as well as the identity of the person making the misrepresentation and what he obtained thereby." Tel-Phonic Servs., Inc. v. TBS Int'l Inc., 975 F.2d 1134, 1139 (5th Cir. 1992) (internal quotation marks and citation omitted). Rule 9(b) requires the application of the "who, what, when, where and how" standard in evaluating the particularity of a pleading. See Williams v. WMX Techs., Inc., 112 F.3d 175, 178 (5th Cir. 1997), cert. denied 522 U.S. 966 (1997); United States ex rel. Wilkins v. North Am. Constr. Corp., 173 F. Supp. 2d 601, 616-17 (S.D. Tex. 2001).
In terms of Rule 9(b)'s procedural implications, a dismissal for failure to plead fraud with particularity as required by Rule 9(b) is treated as a dismissal for failure to state a claim upon which relief may be granted. Jag Media Holdings, Inc. v. A.G. Edwards Sons, Inc., 387 F. Supp. 2d 691, 703 (S.D. Tex. 2004) (citing Lovelace v. Software Spectrum, Inc., 78 F.3d 1015, 1017 (5th Cir 1996)); see also United States ex rel. Russell v. Epic Healthcare Mgmt. Group, 193 F.3d 304, 308 (5th Cir. 1999) (citing Shushany v. Allwaste, Inc., 992 F. 2d 517, 520 (5th Cir. 1993)). Accordingly, this case is subject to dismissal under either Rule 9(b) or Rule 12(b)(6) pursuant to the Defendant's motion, as dismissal of the claims under Rule 9(b) would render the Rule 12(b)(6) analysis unnecessary. However, for the sake of completeness and to comport with the scope of the Rules, the Court also takes into account the standards set forth by Rule 12(b)(6). The Court's deferential standard of review for motions to dismiss under Rule 12(b)(6) must take into consideration the special fraud pleadings requirements of Federal Rule of Civil Procedure 9. See Parnes v. Gateway, Inc., 122 F.3d 539, 545-46 (8th Cir. 1997).
The standards for dismissal under Rule 12(b)(6) are well-settled. Federal Rule of Civil Procedure 12 provides that a pleader may present, by motion, a defense alleging "failure to state a claim upon which relief can be granted." FED. R. CIV. P 12(b)(6) (full citation of rule omitted). Rule 12(b)(6) dismissal is disfavored and justified only if it appears beyond a doubt that the Plaintiffs can prove no set of facts in support of their claims. See United States Abatement Corp. v. Mobil Exploration and Producing U.S., Inc., 39 F.3d 556, 559 (5th Cir. 1994); Clark v. Amoco Production Co., 794 F.2d 967, 970 (5th Cir. 1986). This court may only dismiss the complaint if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations. Hishon v. King Spalding, 467 U.S. 69, 73 (1984). On a Rule 12(b)(6) motion, the court must decide whether the facts alleged, if true, would entitle plaintiff to some legal remedy. See Conley v. Gibson, 355 U.S. 41, 45-46 (1957). "Normally, in deciding a motion to dismiss for failure to state a claim, courts must limit their inquiry to facts stated in the complaint and the documents either attached to or incorporated in the complaint." Lovelace v. Software Spectrum, Inc., 78 F.3d 1015, 1017 (5th Cir. 1996).
The court must accept as true all material allegations in the complaint as well as any reasonable inferences to be drawn. This standard of review may be summarized as follows: "the question, therefore, is whether in the light most favorable to the plaintiff and with every doubt resolved on his behalf, the complaint states any valid claim for relief." See Gregson v. Zurich Am. Ins. Co., 322 F.3d 883, 885 (5th Cir. 2003) (quoting 5 CHARLES A. WRIGHT ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 1357, at 1601 (1969)). However, "[d]ismissal is proper if the complaint lacks an allegation regarding a required element necessary to obtain relief." 2 JAMES WM. MOORE ET AL., MOORE'S FEDERAL PRACTICE, ¶ 12-61 (3d ed. 2006).
B. Application to Plaintiff's Claims
The Plaintiff's Amended Petition does not provide the time, place, or contents of any false or material representations on the part of any Defendant, nor does it connect any particular statement to a particular speaker in regard to the allegedly defective products at issue here. See Blackmon v. American Home Products Corp., 328 F. Supp. 2d 659, 667. The Plaintiff has not alleged specific facts directly tying a Defendant to a particular representation or fraudulent statement. There is no allegation of specific time, place, contents, or individual connected to a specific false representation. Accordingly, the "who, what, when and where" is clearly not satisfied by Plaintiff's pleading. At best, he has offered conclusory and broad allegations that Defendants (not named specifically or citing the individual speaker) "made representations of material facts concerning the character and quality of the product." See Amended Petition. As stated above, Plaintiff sets forth no specific facts in support. Even if this were enough to satisfy Rule 12(b)(6), it is certainly not sufficient to satisfy the heightened particularity requirements of Rule 9(b). See Carroll v. Fort James Corp., 470 F.3d 1171, 1174 (5th Cir. 2006).
In his response to the motion to dismiss, Plaintiff attempts to save his pleading by arguing that the "Defendant's knowledge of the truth and intent to deceive may be pleaded generally," citing Ettem USA, Inc. v. Kollmorgen Corp., No. G-05-325, 2005 U.S. Dist. LEXIS 29189 (S.D. Tex. Oct. 29, 2005). He argues that "Defendant acted with the intent to deceive" and "Defendant through its corporate representatives and agents distributed literature to the public in general and Plaintiff specifically regarding the fitness of its products as it relates to this lawsuit." See Plaintiff's Response. These responsive statements are mis-placed.
First, while the Ettem case does state the legal proposition cited by Plaintiff, it must be read in context with the more particularized requirements of Rule 9(b), as discussed by this Court and as the Ettem opinion itself states directly prior to the portion cited by Plaintiff: "The Fifth Circuit has interpreted Rule 9(b) to require that plaintiffs allege, at a minimum, the particulars of 'time, place, and contents of the false representations, as well as the identity of the person making the representation and what [that person] obtained thereby.'" Id. Quoting Williams v. WMX Techs., 112 F.3d 175, 177-78 (5th Cir. 1997). Plaintiff himself admits this as the standard set forth by the Fifth Circuit. See Response. Merely claiming that he can prove the more generalized "knowledge of the truth and intent to deceive" on the part of Defendant, still without particularized facts to support the remaining Rule 9(b) requirements, does not comport with the heightened pleading requirement. Additionally, his Amended Petition makes no mention of any specific intent to deceive on the part of any individual Defendant, much less set forth the factual particulars regarding the "who, what, when, where, and how" as required, discussed supra. Accordingly, despite his arguments to the contrary, Plaintiff's claims for malice/fraud and misrepresentation still fail under the Rule 9(b) pleading standard.
Failure to comply with the heightened pleading requirements of Rule 9(b) should not automatically or inflexibly result in dismissal with prejudice. Blackmon, 328 F. Supp. 2d at 667-68. Citing Hart v. Bayer Corp., 199 F.3d 239, 247 n. 6 (5th Cir. 2000); Cates v. International Tel. Tel. Corp., 756 F.2d 1161, 1180 (5th Cir. 1985). However, the facts and circumstances of this case provide no suggestion that the Plaintiff will be able to allege, let alone prove, any set of facts to support a claim of fraud. He was given the opportunity to re-plead his claims and specify the particulars required for alleging a claim of fraud against Defendants. The Court specifically ordered him to re-plead his claims so that his misrepresentation and fraud claims comport with the particularity requirements set forth in Rule 9(b) and as articulated by the Fifth Circuit." See Order [Clerk's doc. #24]. He failed to do so and instead simply re-stated his broad allegations in the same general and unsubstantiated terms.
Additionally, Plaintiff's request for the opportunity to conduct additional discovery to save his claims is without merit. A motion to dismiss for failure to state a claim considers the claims set forth in the pleadings, without extrinsic evidence. Again, Rule 9(b)'s clear intent is to eliminate fraud actions in which all the facts are learned through discovery after the complaint is filed. See Friedlander v. Nims, 755 F.2d 810, 813 n. 3 (11th Cir. 1985) (emphasis added). The necessary facts must be pled before the Plaintiff can proceed with discovery.
The Court accordingly concludes that Defendant Wright Medical's motion to dismiss should be granted. Plaintiff's malice/fraud and misrepresentation claims should be dismissed in their entirety for failure to meet the heightened pleading standard of Rule 9(b).
C. Motion for a More Definite Statement
Federal Rule of Civil Procedure 12(e) states, in relevant part: "If a pleading to which a responsive pleading is permitted is so vague or ambiguous that a party cannot reasonably be required to frame a responsive pleading, the party may move for a more definite statement before interposing a responsive pleading. The motion shall point out the defects complained of and the details desired." The Defendant accordingly presented its motion for a more definite statement, again, with its motion to dismiss.
The Plaintiff was already afforded an opportunity to re-plead his claims after Wright Medical filed its first motion for more definite statement, and the Court has already determined that his claims should be dismissed as pled in accordance with Rule 9(b). The Court concludes that requiring a more definite statement from Plaintiff for the second time would not change the status of his claims. Plaintiff has had ample opportunities to clarify, amend or improve his claims as pled. See Romero v. Becken, 256 F.3d 349, 353 (5th Cir. 2001). The Court finds that requiring a more definite statement would be a moot point. Accordingly, the motion for a more definite statement should be denied as moot.
CONCLUSION AND RECOMMENDATION OF THE MAGISTRATE
The undersigned United States Magistrate accordingly recommends that the District Court grant Defendant Wright Medical's Motion to Dismiss §§ IX and X of Plaintiff's Amended Petition or, In the Alternative, Motion for a More Definite Statement [Clerk's doc. #29, 30].
It is further recommended that the Court dismiss Plaintiff's claims for malice/fraud and misrepresentation, as set forth in Sections IX and X, including the corresponding request for exemplary damages, against all Defendants with prejudice.
In Sections IX and X of the Amended Petition, the Plaintiff asserts his malice/fraud and misrepresentation claims against all Defendants collectively. Only Wright Medical filed a motion to dismiss those claims based upon Rule 9(b), while the MGT Defendants instead opted to file a motion for summary judgment based on preemption. However, the Court found Plaintiff's claims in Sections IX and X to be deficient under Rule 9(b) in their entirety against all Defendants. Accordingly, those claims should be dismissed as to all Defendants.
It is true that when a pleading does not satisfy the heightened pleading standard of Rule 9(b), the court should freely grant leave to amend. See Firestone v. Firestone, 76 F.3d 1205, 1209 (D.C. Cir. 1996) (recognizing that courts almost always grant leave to cure deficiencies in pleading fraud). The Court has afforded Plaintiff ample opportunity to re-plead his fraud claims, but he has failed to do so. He only amended them upon order of the Court and only responded to the motion to dismiss his insufficient pleadings upon order of the Court. Accordingly, the Court finds that this is one of those cases in which the claims should be dismissed with prejudice because t"he pleader has had the opportunity to cure any deficiencies but either has not or cannot do so." See Anderson v. USAA Cas. Ins. Co., 221 F.R.D. 250, 254 (D. D.C. 2004) (internal citations omitted).
It is finally recommended that the Court deny as moot the Motion to Dismiss §§ IX and X of Plaintiff's Amended Petition or, In the Alternative, Motion for a More Definite Statement [Clerk's doc. #29, 30] with respect to the motion for a more definite statement.
All other claims asserted by Plaintiff against Defendant Wright Medical would remain.
OBJECTIONS
Within ten (10) days after receipt of the magistrate's report, any party may serve and file written objections to the findings of facts, conclusions of law, and recommendations of the magistrate judge. 28 U.S.C. § 636(b)(1)(c). Failure to file written objections to the proposed findings of facts, conclusions of law and recommendations contained within this report within ten (10) days after service shall bar an aggrieved party from de novo review by the district judge of the proposed findings, conclusions and recommendations, and from appellate review of factual findings and legal conclusions accepted by the District Court except on grounds of plain error. Douglass v. United Serv. Auto. Assn., 79 F.3d 1415 (5th Cir. 1996) (en banc); 28 U.S.C. § 636(b)(1); FED. R. CIV. P. 72.