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We don’t write a lot about our neighboring state of Arizona, but a recent hip replacement case in the District of Arizona caught our eye.  We lived in Arizona for a year back in the mid-1990s, and it is a genuinely interesting and underestimated place.  The 2010 census results have Phoenix as the sixth largest city in the U.S., but it has since surpassed Philadelphia to move into fifth place, behind only New York, Los Angeles, Chicago, and Houston.  Since the time we lived there, Phoenix has gained a baseball team, a hockey team (hockey in the desert?!), and a glimmering new football stadium that has hosted numerous Super Bowls.  If you go to the state Capitol, you will see a maritime memorial in the plaza, which seems odd for a landlocked state—until you move closer and see that the memorial is an anchor from the U.S.S. Arizona, which remains at its final resting place (minus one anchor) in Pearl Harbor.

The Arizona State Courts Building, where the state Supreme Court resides, was completed in 1991, and the inscription carved above the public entrance reads “Where Law Ends, Tyranny Begins.”  That jewel was suggested by a prominent local attorney, and it was selected for use by a then-sitting justice, the late Robert Corcoran.  We had the good fortune to know Justice Corcoran (the Drug and Device Law Spouse clerked for him), and we think his chosen quote is as instructive today as it was when Arizona broke ground for its new courthouse 30 years ago. Maybe more.

But what about the hip case.  The case is Casey v. Wright Medical Technology, Inc. No. CV-19-05360, 2020 WL 736306 (D. Ariz. Feb. 13, 2020), and there are two points that we will highlight:  First, the district court is one of several within the Ninth Circuit that has applied Rule 9(b)’s heightened pleading standard to negligent misrepresentation claims.  Other district courts have gone the other way, but the Casey order sets forth an analytical framework that deserves some attention.

The plaintiff was treated with the defendant’s hip replacement device and unfortunately underwent a number of revision surgeries.  She later sued the manufacturer and alleged, among other things, that the manufacturer negligently misrepresented properties of the device, but otherwise offered few specifics.  Id. at *1-*2.  The defendant moved to dismiss the complaint on a number of bases, including that the plaintiff failed to plead fraudulent misrepresentation with sufficient particularity under Federal Rule of Civil Procedure 9(b).  Id. at *3.

This is not an obscure issue.  Defendants have often implored federal courts to require plaintiffs to plead negligent misrepresentation with particularity, but courts have split on the issue.  The Casey case applied a two-step analysis that the court pulled from Ninth Circuit authority:

When deciding whether Rule 9(b) applies to a claim, a court must first determine whether fraud is an essential element of that claim.  If so, Rule 9(b) applies. . . .  If not, Rule 9(b) can nevertheless apply if “the claim is said to be ‘grounded in fraud’ or to ‘sound in fraud.’” . . .  As the Court of Appeals explained in Vess [v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003)], should a plaintiff allege a “unified course of fraudulent conduct” and rely “entirely on that course of conduct as the basis of a claim,” that claim is “grounded in fraud . . . and the pleading of that claim as a whole must satisfy the particularity requirement of Rule 9(b).”

Casey, 2020 WL 736306, at *4 (quoting Vess).  Applying the first step, fraud was not an essential element of the plaintiff’s claim for negligent misrepresentation, which is a separate tort under Arizona law “governed by the principles of . . . negligence.”  Id. at *5.

The second step, though, triggered Rule 9(b), as the Casey plaintiff’s claim was “grounded in fraud.”  Id.  The plaintiff alleged that the defendant consciously disregarded risks and consciously marketed its product despite awareness of an “unreasonably dangerous condition,” which echoes boilerplate descriptions of a product defect.  Id.  The court ruled that these allegation s were “more indicative of fraud” and further ruled that the plaintiff’s allegations were not sufficiently particular.  Id. at *5-*6.  She did not allege who made the alleged misrepresentations, who published and distributed allegedly false marketing materials, when they were published, and to whom.  “In short, Casey has not come close to averring the ‘who, what, when, where, and how of the misconduct charged.’”  Id. at *6 (quoting Vess).

Second, the district court dismiss the plaintiff’s prayer for punitive damages under an Arizona statute barring punitive damages where the product gained governmental approval or clearance, which is true for all implanted medical devices legally marketed in the United States.  The statute is Arizona Revised Statutes section 12-689, and we commend it to anyone litigating product liability claims under Arizona law.  For those who split hairs over the difference between an “approved” medical device and a “cleared” medical device, Arizona law should cover either kind:  The statute applies to products sold “according to the terms of an approval, conditional approval, clearance, license or similar determination of a government agency.”  Id. (emphasis added).  Because the FDA cleared the plaintiff’s hip devices under the 510k Premarket Notification process, and because none of the statute’s four exceptions applied, the district court dismissed the prayer for punitive damages without prejudice.  In all, a good result from the Valley of the Sun.