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finding that plaintiffs sufficiently alleged facts of a defect by alleging that the knee device broke and presenting X-rays taken at the time of both breaks, which revealed a "total mechanical failure."
Summary of this case from Quintana v. B. Braun Med. Inc.Opinion
No. 12 Civ. 7083 (CM)
07-23-2013
ELAINE WILLIAMSON and RONALD WILLIAMSON, Plaintiffs, v. STRYKER CORPORATION, HOWMEDICA OSTEONICS CORPORATION, and STRYKER SALES CORPORATION, Defendants.
DECISION AND ORDER DENYING DEFENDANTS' PARTIAL MOTION TO DISMISS
:
Plaintiffs Elaine and Ronald Williamson sue defendants Stryker Corporation, Howmedica Osteonics Corporation, and Stryker Sales Corporation for strict products liability, negligence, negligent misrepresentation, fraud, breach of express and implied warranties, violation of the New York General Business Law §§ 349 and 350 for deceptive business practices and false advertising, and loss of services. Mrs. Williamson claims that she suffered physical and emotional harm when Defendants' product, a surgically implanted knee device, broke while implanted in her leg. Plaintiffs seek punitive damages in the amount of $5,000,000.00.
Defendants move to dismiss the following claims: any and all claims to the extent they are based on a theory of manufacturing defect, strict products liability based on a theory of design defect, breach of express and implied warranties, negligent misrepresentation, fraud, and deceptive business practices and false advertising. They also ask the Court to strike Plaintiffs' request for punitive damages.
For the reasons that follow, Defendants' motion is denied. Plaintiffs are directed to file an amended complaint addressing the pleading deficiencies in several of their fraud and negligent misrepresentation allegations, identified below, within ten days of the date of this order.
BACKGROUND
I. Parties and Jurisdiction
Plaintiffs Elaine and Ronald Williamson (together, "Plaintiffs") are a married couple residing in the State of New York, in the County of New York.
Defendants Stryker Corporation and Stryker Sales Corporation are Michigan corporations with their principal place of business in Kalamazoo, Michigan.
Defendant Howmedica Ostenoics Corporation is a New Jersey corporation with its principal place of business in Mahwah, New Jersey.
Stryker Corporation is a medical products and technology company. Stryker Sales Corporation and Howmedica Osteonics Corporation are wholly owned subsidiaries of Stryker Corporation.
The Court has jurisdiction over this action pursuant to 28 U.S.C. § 1332 because there is complete diversity of citizenship between the parties, and the amount in controversy exceeds $75,000.00, exclusive of interests and costs.
II. Facts
The facts are taken from Plaintiffs' Amended Complaint and assumed to be true for the purposes of this motion.
Mrs. Williamson has a long history of problems with her right knee, and she has undergone at least four knee replacement surgeries. Each surgery failed as a result of ligament failure, hospital infections, or other causes. After the last surgery, her surgeon recommended that she either have her leg amputated or that she have the Wichita Fusion Nail knee device implanted in her leg.
The Wichita Fusion Nail "is an intramedullary rod intended to facilitate arthrodesis of the knee joint." (Am. Compl. ¶ 17.) In plain terms, the implant fuses the bones in the knee joint. Its purpose is to relieve pain and stabilize knee joints that have been severely damaged as a result of trauma, infection, or failed surgeries. The Wichita Fusion Nail is a Class II device approved by the Food and Drug Administration (FDA) for the facilitation of arthrodesis of the knee joint.
Before committing to surgical implantation of the Wichita Fusion Nail, Mrs. Williamson reviewed Defendants' website. The website "generally represented that the Wichita Fusion Nail knee revision system was a safe and effective method of treatment." (Am. Compl. ¶ 25.) It also referred to "literature" that described the documented failures of the Wichita Fusion Nail knee revision system: one failure was due to a bone fracture and all other failures were the result of infection. (Am. Compl. ¶ 25.)
On October 21, 2010, Mrs. Williamson had surgery to implant the Wichita Fusion Nail knee device. A representative from Stryker was present for the operation.
After the surgery, Mrs. Williamson began "rehabilitation treatment[]," but she never felt comfortable with the knee device, and always felt that it was unstable. (Am. Compl. ¶ 26.) She had to wear a brace on her leg for several months after the implantation and needed a cane to move around.
On July 6, 2011, Mrs. Williamson felt a sudden and sharp pain in her right leg. From then on, every time she stepped on her right foot, she felt the same pain.
On July 7, 2011, she had X-rays taken, which confirmed a "total mechanical failure" of the Wichita Fusion Nail in her right knee; the implant had broken. (Am. Compl. ¶ 29.) X-rays taken again on July 8, 2011 further confirmed that the device had broken.
Mrs. Williamson's surgeon recommended that she have the knee device removed and replaced, and that until then, she wear a cast on her leg.
Around September 20 through October 4, 2011, Plaintiffs spoke by phone and over email with several Stryker representatives - including Mike Zurlini, Daniel Driesse, and Bill Cymbaluk - about the failure of the knee device. In these conversations, Defendants' representatives "expressed surprise" at the failure of the Wichita Fusion Nail. (Am. Compl. ¶ 33.) According to the Amended Complaint, they represented that they had not had a failure "like this" before, and that the Wichita Fusion Nail was a proven technology with "significant success" in repairing the kind of knee damage that Mrs. Williamson suffered from. (Am. Compl. ¶ 33.)
Initially, the representatives indicated they would meet with Plaintiffs to discuss the failure and how to prevent another break from occurring. They later retracted and told Plaintiffs that it was against company policy for them to meet with Mrs. Williamson.
On October 5, 2011, nearly a year after the initial surgery, Mrs. Williamson had a second surgery to remove the current device from her knee and implant a new one. A representative from Stryker was present for the operation.
Around April 2012, Mrs. Williamson had X-rays taken of her knee, which revealed that the second implant was overstressed, and that the screws in the implant were bending, broken, or otherwise malfunctioning. The second implant was not successful in fusing the knee joint. (Am. Compl. ¶ 36.)
On December 3, 2012, Mrs. Williamson once again felt a sudden and sharp pain in her right leg. She immediately went to the hospital, and X-rays revealed that the implant had broken, resulting in a "total mechanical failure" of the Wichita Fusion Nail in her right knee. (Am. Compl. ¶ 39.)
Plaintiffs allege that, on both occasions, the Wichita Fusion Nail knee device broke due to a manufacturing defect and/or a design defect. In particular, they claim that the device broke because: (1) it relies exclusively on "the fixation in place of the femur and tibia bones"; (2) the knee revision system "is not properly designed or constructed to constrain motion between the femur and tibia bones so as to promote fusion by compression of the bones"; and (3) motion by the bones causes excess force on the device, leading to breakage and injury. (Am. Compl. ¶ 41.)
DISCUSSION
Plaintiffs bring claims for strict products liability for failure to warn (Count 1); strict products liability based on theories of design defect and manufacturing defect (Count 2); negligence (Count 3); negligent misrepresentation (Count 4); fraud (Count 5); breach of express and implied warranties (Counts 6 and 7, respectively); violation of the New York General Business Law §§ 349 and 350 for deceptive business practices and false advertising (Count 8); and loss of services (on behalf of Mr. Williamson) (Count 9).
Defendants move to dismiss the following claims: any claims to the extent they are based on a theory of manufacturing defect; strict products liability based on a theory of design defect (alleged in Count 2); breach of express and implied warranties (Counts 6 and 7); negligent misrepresentation (Count 4); fraud (Count 5); and deceptive business practices and false advertising (Count 8). They also ask the Court to dismiss Plaintiffs' request for punitive damages in connection with the fraud claim.
I. Standard for Determining the Motion
In deciding a motion to dismiss pursuant to Rule 12(b)(6), the Court must accept all factual allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff. See Cargo Partner AG v. Albatrans, Inc., 352 F.3d 41, 44 (2d Cir. 2003); see also Roth v. Jennings, 489 F.3d 499, 510 (2d Cir. 2007).
To survive a motion to dismiss, "a complaint must contain sufficient factual matter . . . to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556). "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555 (internal quotations, citations, and alterations omitted). Thus, unless a plaintiff's well-pleaded allegations have "nudged [its] claims across the line from conceivable to plausible, [the plaintiff's] complaint must be dismissed." Id. at 570; Iqbal, 129 S. Ct. at 1950-51.
Additionally, a complaint alleging fraud must also comply with the heightened pleading requirements of Federal Rule 9(b). Rule 9(b) requires that when "alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake." Fed. R. Civ. P. 9(b). "A complaint making such allegations must (1) specify the statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3) state where and when the statements were made, and (4) explain why the statements were fraudulent." Lerner v. Fleet Bank, N.A., 459 F .3d 273, 290 (2d Cir. 2006) (quoting Mills v. Polar Molecular Corp., 12 F.3d 1170, 1175 (2d Cir. 1993) (internal quotation marks omitted)).
II. Theory of Manufacturing Defect With Respect to Any and All Claims
Defendants argue that Plaintiffs have failed to state a claim under a theory of manufacturing defect because they have not alleged specific facts describing the nature of the manufacturing defect or how the purported defect caused the two knee devices to fail. They also assert that, as a result, Plaintiffs have failed to allege causation for their negligent misrepresentation and fraud claims to the extent they are based on a theory of manufacturing defect.
To state a claim for manufacturing defect under theories of strict liability, negligence, or breach of warranty, the plaintiff must allege that (1) the product was defective due to an error in the manufacturing process and (2) the defect was the proximate cause of plaintiff's injury. See Colon ex rel. Molina v. BIC USA, Inc., 199 F.Supp.2d 53, 85 (S.D.N.Y. 2001). "In order to maintain a claim based on a manufacturing defect, Plaintiff must show that the product either was not built to specifications or did not conform to the manufacturer's intended design." Daley v. McNeil Consumer Products Co., a div. of McNeil-PPC, Inc., 164 F. Supp. 2d 367, 374-75 (S.D.N.Y. 2001).
Some courts have held that, even at the pleading stage, this requires the plaintiff to show that "a specific product unit was defective as a result of some mishap in the manufacturing process itself, improper workmanship, or because defective materials were used in construction." See, e.g., Goldin v. Smith & Nephew, Inc., No. 12 Civ. 9217 (JPO), 2013 WL 1759575 (S.D.N.Y. Apr. 24, 2013); Am. Guarantee & Liab. Ins. Co. v. Cirrus Design Corp., No. 09 Civ. 8357 (BSJ) (HBP), 2010 WL 5480775, at *3 (S.D.N.Y. Dec. 30, 2010). But as my colleague Judge Scheindlin recognized in an earlier case, this standard was taken from Colon v. BIC USA, Inc., which involved a motion for summary judgment, not a motion to dismiss. See Ohuche v. Merck & Co., Inc., No. 11 Civ. 2385 (SAS), 2011 WL 2682133, at *2-3 (S.D.N.Y. July 7, 2011). Under some circumstances, such a standard would require the plaintiff to possess technical or scientific knowledge about the inner workings of the product, which would contravene the notice pleading requirement of Federal Rule of Civil Procedure 8, even under the Iqbal-Twombly standard. See Ohuche v. Merck & Co., Inc., No. 11 Civ. 2385 (SAS), 2011 WL 2682133, at *2-3 (S.D.N.Y. July 7, 2011). That is the case here, and I do not require Plaintiffs to allege specific facts about the manufacturing process.
Moreover, it is well-settled that a plaintiff may rely upon the circumstances of an accident to prove the existence of a manufacturing defect if the product did not perform as intended and the possibility of other causes has been excluded. See Sanchez v. Stanley-Bostitch, Inc., No. 98 Civ. 0494 (LMM), 2000 WL 968776, at *2 (S.D.N.Y. July 13, 2000).
It is true that Plaintiffs have not alleged any facts about the manufacturing process itself. They have asserted only that "the components [of the knee device] were defectively . . . manufactured," (Am. Compl. ¶ 54a), and that the device "is not properly . . . constructed to constrain motion between the femur and tibia bones so as to promote fusion by compression of the bones," (Am. Compl. ¶ 41).
Plaintiffs have, however, alleged sufficient facts to state a claim based on the circumstances surrounding the breaks of the two knee devices.
Plaintiffs have alleged that the knee device did not perform as intended. In fact, it broke. X-rays taken at the time of both breaks, in July 2011 and December 2012, revealed a "total mechanical failure" of the Wichita Fusion Nail. (Am. Compl. ¶ 29, 39.) Additionally, x-rays taken before the second break, in April 2011, revealed that the second implant was "overstressed and that the screws in the implant [were] bending, broken and/or otherwise malfunctioning." (Am. Compl. ¶ 37.)
While Plaintiffs have not explicitly excluded all possible causes of the breaks, they assert in their opposition brief that the knee devices were surgically implanted by Mrs. Williamson's physician "in the ordinary course," and that on both occasions, Mrs. Williamson used the knee devices "in the ordinary course." Indeed, the Amended Complaint describes the actions that Mrs. Williamson took after the devices were implanted, including rehabilitation treatment after the first surgery, and explains that Mrs. Williamson was alerted to the breaks by a "sudden and sharp pain," suggesting that she had done nothing in particular to cause any break. Drawing all reasonable inferences in favor of the Plaintiff, one can conclude that nothing she or her physician did caused the knee devices to break. In fact, according to Plaintiffs' allegations, Defendants' representatives told Plaintiffs that the knee device had never broken before; and Defendants' website and associated literature indicated that none of their knee devices had failed due to a break before. This suggests that the breaks were due to a flaw in the manufacturing process, as opposed to some mishap in surgery or an expected risk of using the device.
Of course, it is possible that a design defect led to the break (Plaintiffs allege design defect as one of their theories), or that something else happened during the implantation process or after to cause the break. It is also possible that Mrs. Williamson was not a good candidate for the knee device, for whatever reason. I expect that Defendants will raise these at least some of these issues as the case proceeds.
But at this early stage in the litigation, prior to discovery, Plaintiffs do not have all the facts to eliminate all other plausible causes of the breakages. Under New York law, when the determination of whether an injury was caused by some event or conduct is "presumed not to be within common knowledge and experience," competent medical opinion evidence is necessary to enable a fact-finder to find the requisite causation. Fane v. Zimmer, Inc., 927 F.2d 124, 131 (2d Cir. 1991). That is the case here. It is sufficient at this stage that Plaintiffs have alleged that the two knee devices broke, and that nothing Mrs. Williamson did caused the break; all other possible causes may be eliminated as Plaintiffs obtain discovery and consult with an expert. At that point, Plaintiffs may have the information necessary to assert specific facts about errors in the manufacturing process itself, improper workmanship, or the use of defective materials, and how such problems led to the breaks of the knee devices. For the same reasons, Plaintiffs have sufficiently alleged causation for manufacturing defect to the extent they rely on that theory for any of their other claims, including negligent misrepresentation and fraud.
Defendants' motion to dismiss Plaintiffs' claims to the extent that they rely on a theory of manufacturing defect is denied.
III. Design Defect Claim Under Strict Liability, Alleged in Count 2
Under New York law, a plaintiff may allege that a product is defective for any of three reasons: (1) manufacturing defect, (2) failure to warn, or (3) design defect. Ohuche v. Merck & Co., Inc. No. 11 Civ. 2385 (SAS), 2011 WL 2682133, at *2 (S.D.N.Y. July 7, 2011). As discussed above, Plaintiffs' manufacturing defect claim survives this motion to dismiss; Defendants do not move to dismiss Plaintiffs' failure to warn claim. But Defendants argue that an exception to strict liability for "unavoidably unsafe products" applies to this case, and that, as a result, Plaintiffs cannot assert a design defect claim under strict liability, alleged in Count 2 of the Amended Complaint.
The Restatement (Second) of Torts § 402 A, comment k provides an exception to a manufacturer's strict liability for defective products for "Unavoidably unsafe products." Unavoidably unsafe products are those "which, in the present state of human knowledge, are quite incapable of being made safe for their intended and ordinary use." Restatement (Second) of Torts § 402 A, comment k (1979). The Restatement notes that such products are "especially common in the field of drugs." Id. Under the exception, an unavoidably unsafe product, "properly prepared, and accompanied by proper directions and warning, is not defective, nor is it unreasonably dangerous." Id. "The seller of such products, [] with the qualification that they are properly prepared and marketed, and proper warning is given, where the situation calls for it, is not to be held to strict liability for unfortunate consequences attending their use." Id.
New York courts have adopted comment k of the Second Restatement and repeatedly applied the "unavoidably unsafe products" exception to cases involving prescription drugs. For example, in Wolfgruber v. Upjohn Co., 423 N.Y.S.2d 95 (4th Dep't 1979), aff'd, 52 N.Y.2d 768 (N.Y. 1980), the Fourth Department treated a prescription antibiotic as an unavoidably unsafe product, and in Martin v. Hacker, 83 N.Y.2d 1, 8-9 (N.Y. 1993), the New York Court of Appeals applied the exception to several drugs prescribed for hypertension.
However, this Court is aware of no New York case extending the "unavoidably unsafe" products exception to all medical devices. In Bravman v. Baxter Healthcare Corp., 984 F.2d 71, 75-76 (2d Cir. 1993), the Second Circuit, in addressing the plaintiff's claim of design defect, wrote that it believed that the mechanical heart valve at issue in the case was an "unavoidably unsafe product." But the court noted that the district court findings on the design defect claim did not depend upon that determination. Id. Instead, following the district court's reasoning, the Second Circuit assessed the viability of the design defect claim under the legal standard for such claims in New York - the "utility/risk analysis" - rather than by applying the unavoidably unsafe products exception. Id. On that basis, the court affirmed the district court's determination that, as a matter of law, the utility of the heart valve outweighed the asserted risk (of a noisy heart valve), and affirmed the dismissal of the plaintiff's design defect claim. Id.
Bravman at most stands for the proposition that a heart valve is an unavoidably unsafe product. That says nothing about medical devices in general. Furthermore, the precedential value of even that finding is questionable, since the court did not rely on the unavoidably unsafe product exception in its holding. As a result, in several recent cases, the Northern District of New York has chosen not to invoke the unavoidably unsafe products exception with respect to medical devices. For example, in Henson v. Wright Med. Tech., Inc., 5:12-CV-805 FJS/TWD, 2013 WL 1296388, at *6-7 (N.D.N.Y. Mar. 28, 2013), the court declined to find that a medical device - a prosthesis - was an unavoidably unsafe product under New York law, precisely because the precedential value of the Second Circuit's ruling in Bravman was less than clear. And in another case, involving one of the same defendants here and a knee replacement device, the court applied the utility/risk analysis to assess the plaintiff's design defect claim without addressing the unavoidably unsafe product exception. Maxwell v. Howmedica Osteonics Corp., 713 F. Supp. 2d 84, 90-94 (N.D.N.Y. 2010).
The Court is aware of no explicit test in New York to determine what kinds of products are unavoidably unsafe within the meaning of comment k, aside from the language in the Restatement defining such products as those that are "incapable of being made safe for their intended and ordinary use." Without a clear legal standard, such as one defining all medical devices as "unavoidably unsafe products," a motion to dismiss - when there are only allegations, no evidence - is the wrong vehicle for resolving whether a knee device like the Wichita Fusion Nail is "unavoidably unsafe." See Johannsen v. Zimmer, Inc., No. 03 Civ. 2270 (DJS), 2005 WL 756509, at *8 n.5 (D. Conn. Mar. 31, 2005).
But even if the knee device in this case were an "unavoidably unsafe product," I would still deny Defendant's motion. Comment k does not bar plaintiffs from bringing design defect claims against any product that is deemed "unavoidably unsafe." See Restatement (Second) of Torts § 402 A, comment k (1979). It only prohibits design defect claims against such products that are also "properly prepared" and "accompanied by proper directions and warning." Id. As the New York Court of Appeals wrote in Martin, "The comment k defense is unavailable for products negligently manufactured, negligently distributed or unaccompanied by proper warnings." Martin v. Hacker, 83 N.Y.2d 1, 8-9 (N.Y. 1993). Thus, for products that are not accompanied by proper warnings and instructions, the exception simply does not apply, and plaintiffs may bring a design defect claim. Several courts have recently declined to dismiss design defect claims under the "unavoidably unsafe products" exception where the plaintiffs have stated a cognizable "failure to warn" claim. See Henson v. Wright Med. Tech., Inc., 5:12-CV-805 FJS/TWD, 2013 WL 1296388, at *7 (N.D.N.Y. Mar. 28, 2013); DiBartolo v. Abbott Laboratories, No. 12 Civ. 900 (NRB), 2012 WL 6681704, at *14 (S.D.N.Y. Dec. 21, 2012); Gensler v. Sanolfi-Aventis, No. 08 Civ. 2255 (DGT) (RER), 2009 WL 857991, at *6 (E.D.N.Y. Mar. 30, 2009).
Here, Plaintiffs have pleaded a "failure to warn" claim, and Defendants do not challenge its sufficiency. Therefore, Plaintiffs' claim for design defect, alleged in Count 2, may go forward, regardless of whether the knee device is considered an "unavoidably unsafe product."
IV. Count 7: Breach of Implied Warranty
Defendants argue that Plaintiffs' claim for breach of the implied warranty of merchantability must also be dismissed on the basis that the Wichita Fusion Nail is an "unavoidably unsafe product." They argue that the "implied promise" in a breach of implied warranty claim that the product is fit for its "ordinary use" cannot be made with respect to an "unavoidably unsafe product," since, by its very nature, such a product is incapable of being made safe for its ordinary purpose.
Because I cannot deem the Wichita Fusion Nail an "unavoidably unsafe product" at this juncture, Defendants' argument necessarily fails, and its motion to dismiss Count 7, breach of implied warranty, is denied.
V. Count 6: Breach of Express Warranty
Under New York law, an express warranty is created by, "Any affirmation of fact or promise made by the seller to the buyer which relates to the goods" or "any description of the goods" and is "part of the basis of the bargain." N.Y. Uniform Commercial Code § 2-313. While the seller need not use formal words such as "warrant" or "guarantee," nor have the specific intention to make a warranty, "an affirmation merely of the value of the goods or a statement purporting to be merely the seller's opinion or commendation of the goods does not create a warranty." Id. To state a claim for breach of express warranty, the plaintiff must allege that it relied upon the warranty to its detriment. Weiner v. Snapple Beverage Corp., 2011 WL 196930, at *5 (S.D.N.Y. Jan. 21, 2011).
The Amended Complaint alleges that Defendants made various express warranties, and that Plaintiffs relied on those warranties.
Prior to the first surgery, Plaintiffs reviewed Defendants' website, which, according to Plaintiffs, "generally" represented that the Wichita Fusion Nail knee revision system was a "safe and effective method." (Am. Compl. ¶ 25.) The website also referenced "literature" that reported that almost all failures of the Wichita Fusion Nail resulted from infection, with the exception of a one documented failure due to a bone fracture. (Am. Compl. ¶ 25.) After the first device broke, employees of Defendants expressed "surprise" at the failure of the Wichita Fusion Nail, told Plaintiffs that the device had not failed "like this" before, and that it was a "proven technology" which had "significant success" with the kind of repair that Mrs. Williamson required. (Am. Compl. ¶ 33.)
Plaintiffs further allege that any representations that the knee device had never broken before were false because, by the time of Mrs. Williamson's first surgery, on October 21, 2010, "several reports had been made to the Food and Drug Administration that pieces of the Wichita Fusion Nail knee revision system, including screws, had broken and/or otherwise failed" while in use. (Am. Compl. ¶ 47.) Nonetheless, they allege, Defendants represented to Mrs. Williamson's health care providers that the Wichita Fusion Nail was "safe and effective." (Am. Compl. ¶ 86.)
Defendants argue that these statements are merely general statements about the quality of the product, or "opinion or commendation," and therefore do not qualify as an "affirmation of fact or promise" or "description of the goods" within the meaning of U.C.C. § 2-313. They also argue that Plaintiffs have failed to make factual allegations with sufficient particularity to survive a motion to dismiss.
Defendants are incorrect.
Affirmations of fact regarding the safety of a product are actionable on a claim for breach of express warranty. See Rice v. Kawasaki Heavy Industries, Ltd., 2008 WL 4646184, at *10 (E.D.N.Y. October 17, 2008); Spiegel v. Saks 34th St., 252 N.Y.S.2d 852, 857-58 (N.Y. App. Term. 1964) aff'd, 272 N.Y.S.2d 972 (1966). Contrary to Defendants' contention, statements that the knee device was safe and effective - made directly by Defendants' employees and on the website - are not simply "opinion or commendation" of the product. You do not need to be a medical professional to know that a patient's primary concern going into any surgery involving the use of a medical device is the safety of the product, and it is entirely reasonable that patients would rely upon such statements in deciding to go forward with surgery. Patients do not seek information about the safety of a medical device in order to get a mere opinion; they want to know whether the device is actually safe. According to Plaintiffs' allegations, Defendants represented that the Wichita Fusion Nail was safe.
For similar reasons, statements about safety are also not appropriately characterized as "merely general statements" about the quality of a product. This is especially true in the context of medical products and procedures. Statements about safety are not like statements that a product is generally of good or excellent quality. Instead, they make a specific claim or promise about the potential consequences of using a product - that it will not be harmful or injurious - rendering such statements more specific than an assertion that a product is simply "good."
Additionally, according to Plaintiffs' allegations, statements indicating that the Wichita Fusion Nail had never broken before were false. An "affirmation of fact" that the device had never broken before, or that a break had never been documented - by the literature on the website, and by the employees who stated that the device had not failed "like this" before - may form an express warranty to that effect. See Jesmer v. Retail Magic, Inc., 863 N.Y.S.2d 737, 746 (N.Y. 2008) ("An express warranty can arise from literature published about a product.") (internal quotations and alterations omitted). The definition of what constitutes an express warranty is broad, including as it does "any" affirmation of fact related to the goods, and is not limited to specific kinds of statements about a product, or to specific characteristics of the product. See Bell v. Manhattan Motorcars, Inc., No. 06 Civ. 4972 (GBD), 2008 WL 2971804, at *3 (S.D.N.Y. Aug. 4, 2008). Here, Plaintiffs have alleged that Defendants represented that the product had never been broken before or that there were no such documented failures, and that the representations were false or misleading when they were made. See Rogath v. Siebenmann, 129 F.3d 261, 264 (2d Cir. 1997). That is all that is required to allege that the statement was an express warranty, and that the warranty was breached. The fact that this representation was allegedly made after the first failure, and that Mrs. Williamson elected to have a second Wichita Fusion Nail inserted in her leg after receiving this information, reinforces the sufficiency of her pleading.
Plaintiffs have made their factual allegations with sufficient specificity to survive a motion to dismiss. They have stated where, when, and how the alleged statements and promises regarding the Wichita Fusion Nail were provided to them. This is sufficient to state a claim at the pleading stage. See Fisher v. APP Pharmaceuticals, LLC, 783 F. Supp. 2d 424, 431-32 (S.D.N.Y. 2011). Defendants' motion to dismiss Count 6, breach of express warranty, is denied.
VI. Count 4: Negligent Misrepresentation
Negligent misrepresentation, like fraud, is subject to the heightened pleading requirements of Rule 9(b). Naughright, 2011 WL 5835047, at *6 (internal citations omitted); see also Kimmell v. Schaefer, 89 N.Y.2d 257, 263 (N.Y. 1996); White v. Guarente, 43 N.Y.2d 356, 362-63 (N.Y. 1977).
The elements of a claim for negligent misrepresentation are that: "(1) the defendant had a duty as a result of a special relationship to give correct information; (2) the defendant made a false representation that he or she should have known was incorrect; (3) the defendant knew that the plaintiff desired the information for a serious purpose; (4) the plaintiff intended to rely and act upon it; and (5) the plaintiff reasonably relied on it to his or her detriment." Naughright v. Weiss, 826 F.Supp.2d 676, 2011 WL 5835047, at *6 (S.D.N.Y. Nov.18, 2011) (citing Hydro Investors, Inc. v. Trafalgar Power Inc., 227 F.3d 8, 20 (2d Cir. 2000)).
As a formal matter, Plaintiffs fail to identify in the Amended Complaint each and every misrepresentation they claim was negligently made. In their opposition brief, they refer to various allegations made in the Amended Complaint as the basis for their claim, including: representations on Defendants' website, and made to Mrs. Williamson's healthcare providers, that the device was generally safe and effective; literature on Defendants' website outlining documented failures of the Wichita Fusion Nail; communications Plaintiffs had with Defendants' representatives after the first surgery, indicating that there had been no failures "like this" before, that the Wichita Fusion Nail was a "proven technology," and that it had been used with "significant success" in patients suffering from the same type of knee damage as Mrs. Williamson; and Defendants' failure to mention any risk of the knee device breaking.
The allegation that Defendants' representatives told Mrs. Williamson that the Wichita Fusion Nail had never failed "like this" before - meaning that the device had never broken before - is sufficient to allow Plaintiffs' claim for negligent misrepresentation to go forward.
It is obvious from the Amended Complaint and the briefs that the last four elements of negligent misrepresentation have been met. According to Plaintiffs' allegations, Defendants should have known that a statement that the device had never broken before was incorrect because, prior to Mrs. Williamson's first surgery on October 21, 2010, several reports had been made to the FDA that pieces of the knee revision system had broken. The statement was made to Mrs. Williamson after her first implant had already broken, in order to assist her in determining whether to undergo a second surgery to implant a second device. Clearly, Defendants knew or should have known that Mrs. Williamson intended to rely on this representation to make her decision. Mrs. Williamson did indeed rely on the representation to her detriment.
Plaintiffs have also sufficiently alleged the first element, that Defendants had a duty to give correct information as a result of a "special relationship."
The court considers three factors to determine if a special relationship and duty exist: "whether the person making the representation held or appeared to hold unique or special expertise; whether a special relationship of trust or confidence existed between the parties; and whether the speaker was aware of the use to which the information would be put and supplied it for that purpose." Suez Equity Investors, L.P. v. Toronto-Dominion Bank, 250 F.3d 87, 103 (2d Cir. 2001).
Plaintiffs have alleged that Defendants were the designers and manufacturers of the knee device, and so have unique or special expertise about it. They also allege that Defendants were aware that Plaintiffs would use information from their website or from conversations with its representatives to decide whether Mrs. Williamson would have the device implanted. And after Mrs. Williamson's first surgery, she established a relationship of trust with Defendants. Indeed, while she alleges that she relied upon their representations when she chose to undergo her first surgery, she particularly relied on their statement as she considered whether to undergo a second surgery. This is enough at the pleading stage - especially considering that the Second Circuit has held that a "'sparsely pled' special relationship of trust or confidence is not fatal to a claim for negligent misrepresentation where 'the complaint emphatically alleges'" the other two factors. See Eternity Global Master Fund Ltd., 375 F.3d at 188 (quoting Suez Equity Investors, L.P. v. Toronto-Dominion Bank, 250 F.3d 87, 103 (2d Cir. 2001)).
The allegation about Defendants' misrepresentation following the first Stryker failure is alone sufficient to state a claim for negligent representation, so Defendant's motion to dismiss Count 4, negligent misrepresentation, is denied.
However, Plaintiffs have ten days to file an amended complaint, identifying each and every specific statement that they allege was a negligent misrepresentation, identifying the speaker, and stating where and when the statements were made. See Lerner v. Fleet Bank, N.A., 459 F .3d 273, 290 (2d Cir. 2006) (quoting Mills v. Polar Molecular Corp., 12 F.3d 1170, 1175 (2d Cir. 1993) (internal quotation marks omitted)). They should also explain why the statements were fraudulent, although the breaking of the device speaks for itself. See id.
For example, with respect to Plaintiffs' claim that the website "generally" represented that the knee device was safe and effective, Plaintiffs must specify the exact statements they claim were fraudulent (i.e., quote them), identify the website itself and where on the website the statements were made, specify "who" made the statements (e.g., if they were made in some other literature referenced by the website), state around when Plaintiffs' reviewed the website and saw these representations, and why the statements were fraudulent. To the extent that Plaintiffs may not have "pictures" of the pages that were on the website at the relevant time but are no longer available, a more general allegation will suffice now. Eventually, Plaintiffs will have to provide Defendants with a bill of particulars, pointing to specific, time-appropriate web pages. I will not, however, decline to allow Plaintiffs to pursue claims for web-based misrepresentations simply because changes to Defendants' website made old pages difficult or impossible to retrieve now.
VII. Count 5: Fraud
A complaint alleging fraud must also comply with the heightened pleading requirements of Federal Rule 9(b).
The elements of fraud under New York law are the following: (1) the defendant made a representation of material fact; (2) that was false; (3) defendant knew that the representation was false; (4) defendant made the representation to induce plaintiff to act; (5) plaintiff justifiably relied on the representation; and (6) plaintiff was injured thereby. Sokolow, Dunaud, Mercadier & Carreras, LLP v. Lacher, 747 N.Y.S.2d 441, 446 (N.Y. App. Div. 2002).
For the same reasons discussed in connection with the negligent misrepresentation claim, Defendants' alleged misrepresentation to Mrs. Williamson that the device had never failed "like this" before - i.e., had never broken - is sufficient to survive a motion to dismiss. This was a material fact upon which Mrs. Williamson justifiably relied when she decided to have a second device implanted in her leg after the first one broke; it was made by a Stryker representative encouraging her to undergo a second implantation of the device; and she was injured when the second device broke. Moreover, according to the allegations, the statement was false, and known by Defendants to be false, because reports that parts of the device had broken had been made to the FDA, and Defendants claimed to be aware of all documented failures of the knee device.
Defendants' motion to dismiss Count 5, fraud, is denied.
As with the negligent misrepresentation claim, Plaintiffs have ten days to file an amended complaint further particularizing the statements they allege to have been false.
VIII. Count 8: GBL §§ 349 and 350
Section 349 of New York General Business Law makes unlawful "deceptive acts or practices in the conduct of any business, trade, or commerce or in the furnishing of any service." GBL § 349. Section 350 prohibits "False advertising in the conduct of any business, trade or commerce or in the furnishing of any service." GBL § 350. To state a claim for deceptive practices under either section, a plaintiff must show (1) that the act, practice or advertisement was consumer-oriented, (2) that the act, practice or advertisement was misleading in a material respect, and (3) that the plaintiff was injured as a result of the deceptive practice, act or advertisement. Pelman v. McDonald's Corp., 237 F. Supp. 2d 512, 525 (S.D.N.Y. 2003); see also City of New York v. Smokes-Spirits.com, Inc., 12 N.Y.3d 616, 621 (N.Y. 2009).
Claims under Section 349 and 350 are not subject to the pleading-with-particularity requirements of Rule 9(b), Fed. R. Civ. P., and need only meet the bare-bones notice-pleading requirements of Rule 8(a), Fed. R. Civ. P. See Pelman ex rel. Pelman v. McDonald's Corp., 396 F.3d 508, 511 (2d Cir. 2005) (§ 349); United Magazine Co. v. Murdoch Magazines Distribution, Inc., No. 00 Civ. 3367 (AGS), 2001 WL 1607039, at *12 (S.D.N.Y. Dec. 17, 2001) (§ 350).
Plaintiffs have adequately pleaded deceptive practices and false advertising claims. Through Defendants' website and in various communications with Defendants' employees, Defendants represented that the Wichita Fusion Nail was generally "safe and effective," a "proven technology," a "significant success" with the kind of knee repair that Mrs. Williamson required, and that the knee device had never failed due to a break before and/or that there were no such documented failures. Nowhere on the website or in conversations with Plaintiffs did Defendants address any potential risk of the device breaking.
The representations on the website were clearly consumer-oriented, as they were directed and available to the public at large through the Internet. Statements made directly to Plaintiffs by Defendants' employees are also consumer-oriented. The standard for establishing consumer-oriented conduct is very liberal, and where a defendant deals with a plaintiff in the same way as it would deal with any other customer, such conduct is considered "consumer-oriented." See Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, N.A., 85 N.Y.2d 20, 24-25 (N.Y. 1995). Here, in responding to complaints like Mrs. Williamson's, Defendants would have dealt with Plaintiffs in the same way they would deal with any other customer who has questions, concerns, or complaints about their products, making Defendants' statements consumer-oriented.
Plaintiffs have alleged that these statements were materially misleading and that Mrs. Williamson was injured as a result. According to the Amended Complaint, the Wichita Fusion Nail knee device had broken in the past, though Defendants misleadingly indicated that it had not. And Mrs. Williamson experienced two failures of the device, despite the claims that Defendants had "significant success" with the kind of repair that she required and that the device had never broken before. At the pleading stage, nothing more is required.
Defendants' motion to dismiss Count 8 for deceptive business practices and false advertising claims is denied.
IX. Punitive Damages
It is not possible at this stage to assess whether Defendants might be liable to Plaintiffs in punitive damages - i.e., whether Plaintiffs are entitled to this particular form of relief - and it will likely not be possible until the trial of this action. Defendants' request to strike the prayer for punitive damages in the Amended Complaint is denied.
CONCLUSION
For the foregoing reasons, Defendants' motion to dismiss is denied. Plaintiffs have ten days to file an amended complaint further particularizing the statements they claim constituted negligent misrepresentation and fraud, as discussed in Sections VI and VII above. The Clerk of the Court is directed to remove the motion at Docket No. 18 from the Court's list of pending motions. July 23, 2013
/s/_________
U.S.D.J. BY ECF TO ALL COUNSEL