Before Bryan Cranston was Walter White, terminally ill chemistry teacher turned murderous meth manufacturer; before he was Hal, the clumsy and loving husband on Malcolm in the Middle – he was Tim Whatley. Jerry Seinfeld’s re-gifting dentist who converted to Judaism just “for the jokes.” So affronted is Jerry for his profession, that Kramer – as only he can – labels Jerry an anti-dentite.
We’ll admit to not delighting in trips to the dentist. The scraping, the drilling, the prodding. Let’s face it, we’re litigators. The not being able to talk alone is torture. But, we wouldn’t normally call ourselves rabid anti-dentites. That is until they try to sue dental product manufacturers.
Today’s case deals with a relatively rare (thankfully) instance of a prescriber suing for damages to his business caused by his prescribing of an allegedly defective device. Prescott v. Argen Corp., No. 13-6147, slip op. (N.D. Ill. Sep. 17, 2014). Plaintiffs are dentists who alleged that the crowns they purchased and implanted in their patients were defective and that they therefore sustained economic injuries. Id. at 1. Plaintiffs brought claims for breach of implied warranty of merchantability, fraudulent misrepresentation, consumer fraud, negligence, and strict products liability. Id. at 5. Defendants moved to dismiss on several grounds.
First, plaintiffs’ breach of warranty claim failed for insufficient allegations of both notice and privity. Plaintiffs argued that the notice requirement should be excused because defendants had actual knowledge of the defect. But, that exception requires “actual knowledge of trouble with a particular product purchased by a particular buyer.” Id. at 6. Allegations of a defendant’s “general awareness” of issues with a product line aren’t enough. Id. As to privity, plaintiffs alleged only a “good faith belief” that privity existed, which the court found “stops short” of actually claiming privity. Id. at 8. They next tried to circumvent the requirement altogether relying on consumer personal injury cases. But the same privity exception does not extend to economic loss cases. Id. at 9.
Second, on their fraud claim plaintiffs had to satisfy Rule 9’s heightened pleading requirements — which they did not do because “they fail[ed] to identify any specific transaction that resulted from fraud.”
Id. at 10. Here the court focused on a very common pleading crutch – the ambiguous “at all relevant times.” “At all relevant times” defendant knew about the alleged defect. “At all relevant times” defendant made “various false statements.” In our opinion this is too vague to withstand TwIqbal, let alone Rule 9.
Third, plaintiffs’ consumer fraud claim failed for lack of specificity, id. at 15-16, but an even more fundamental flaw was that plaintiff-dentists are not consumers. A consumer is someone who purchases a product “not for resale in the ordinary course of his trade or business.” Id. at 13. Plaintiffs tried unsuccessfully to argue that they did not purchase the crowns for re-sale, but all of the allegations regarding purchase for use in treating patients led the court to the rightful conclusion that the dentists were “business purchasers” and therefore fell outside the protections of Illinois consumer fraud statute. Id. at 13.
Plaintiffs also didn’t satisfy the consumer nexus test which requires the plaintiff demonstrate (1) a link between himself and the consumer, (2) that the defendant’s representations concerned consumers other than the plaintiff, (3) that the defendant’s actions involved consumer protection concerns, and (4) that plaintiff’s requested relief would serve the interests of the consumers. Id. at 14. Even assuming the dentists could satisfy the first three prongs, an award of damages to the dentists would not “benefit the damaged patients in the least.” Id. at 15.
Finally, plaintiff’s negligence and strict liability claims were dismissed in accordance with the economic loss doctrine. Plaintiffs yet again tried to fit within another exception – where the damages are the result of fraud. But fraud was not a part of either their negligence or strict liability claim. Negligence which is unintentional cannot constitute fraud, which by definition is intentional. Id. at 17. Looking at the elements of strict liability, the court found “[n]one of these elements pertains in any way to intentional false representation.” Id.
We don’t like pointing the finger at prescribers. They are our clients’ clients after all. But, when they point at us, we’re happy to see courts brush, rinse and floss those claims right down the drain.