This post is from the non-Reed Smith side of the blog.
When we posted about Sikkelee v. Precision Airmotive Corporation, 907 F.3d 701 (3d. Cir. 2018) we thought it should be the end of failure-to-report claims in the Third Circuit. But, since that decision was about an FAA failure-to-report claim, we felt it was shy of a drop the mic moment. Then, in Conklin v. Medtronic, Inc., No CV-17-0322-PR, slip op. (Ariz. Dec. 18, 2018), the Arizona Supreme Court announced that the Ninth Circuit, in Stengel, got Arizona state law incorrect and rejected a failure-to-report to the FDA claim. Drop the mic.
So, we are left profoundly puzzled that when faced with just such a claim in Freed v. St. Jude Medical, Inc., 2019 WL 418843 (D. Del. Feb. 1, 2019), the court didn’t even cite Sikkelee or Conklin, relying instead on the cut-off-at-the-knees Stengel decision. Not only should Stengel not be followed anywhere because it was an incorrect prediction of Arizona law, it shouldn’t be followed in the District of Delaware because the Third Circuit has come down the other way. Even though Sikkelee involved FAA reporting requirements, the Third Circuit relied on Buckman in concluding that plaintiff could not “use a federal duty and standard of care as the basis for this state-law negligence claim.” Sikkelee, 907 at 716. So, the Freed court was wrong both that the Third Circuit has not decided this issue and that Arizona recognizes a state law duty to warn the FDA. Freed, at *11. Then Freed goes on to make the same mistake the Ninth Circuit made — overreaching as a federal court sitting in diversity to make up new theories of liability under state law.
Delaware law sounds essentially the same as Arizona law (and Pennsylvania law too which was at issue in Sikkelee). Looking at Stengel, Conklin, and Freed, they all describe Arizona/Delaware law as permitting/requiring in certain circumstances a warning to a third party if there is “reasonable assurance that the information will reach those whose safety depends on such information.” Id. Freed acknowledges that there is no Delaware law establishing a duty to warn or report to a government agency. Id. But rather than also acknowledging that it should not adopt an expansive reading of Delaware law to create such a duty, Freed repeats Stengel’s baseline mistake. Maybe Freed gets overturned explicitly by the Third Circuit or maybe it gets its legs kicked out by the Delaware Supreme Court. Either way, we consider this portion of the Freed decision highly vulnerable.
Fortunately, plaintiff isn’t out of the woods yet. The failure-to-report claim was dismissed without prejudice for failure to adequately plead causation. Plaintiff didn’t allege that had the adverse events been reported to the FDA, the information would have reached either plaintiff or her physician, would have impacted plaintiff’s decision to have surgery, or would have led to the FDA to take some action. Id. at *13. Without this, there is no causal nexus. But, plaintiff is being given another chance to fix this deficiency.
The rest of the Freed decision is not as unexpected as the failure-to-report portion. Plaintiff’s breach of express warranty claim failed because the only claim plaintiff could substantiate was that a sales representative told plaintiff she would “be happy” with the device. Id. at *7. Since that was nothing more than a “vague, subjective opinion,” it could not form the basis of an express warranty claim. Id. at *8. Plaintiff’s breach of implied warranty claims were preempted because plaintiff did not allege any federal violations that would allow them to proceed as parallel claims. Since plaintiff didn’t fix this problem in the amended complaint, the claims were dismissed with prejudice. Id. at *9. And finally, plaintiff’s negligent manufacturing claim survived based on allegations regarding an FDA recall and that the device did not comply with GMP regulations. Id. at *15.