This post is from the non-Reed Smith side of the blog.

Way back at the start of this year, we posted about a great preemption win on express warranty. Well, that case has worked its way through the appellate process and the Fifth Circuit unfortunately has reversed the decision. But, we aren’t going to rage against the decision as you might expect us to. We aren’t going to laud it either. Rather, we are taking the decision for what it is – the narrowest of preemption escapes based on the unusually detailed nature of what the manufacturer actually said in the alleged warranty. Good luck to plaintiffs trying to use this decision elsewhere. For 99.9% of express warranty cases, this case’s rationale actually is a positive result.

The facts of the case are straightforward. Plaintiff alleged that a neurostimulator implanted in his spine stopped working after one and a half years, had to be explanted, and that he suffered complications from the revision surgery. Wildman v. Medtronic, Inc., 2017 U.S. App. LEXIS 21655 at *2-3 (5th Cir. Oct. 31, 2017). Plaintiff’s only claim was that the defendant breached its express warranty guaranteeing the device for 9 years. The alleged warranty language is important. The defendant’s website said that in addition to battery life, “many other factors and components are involved in determining the overall longevity of an implanted medical device.” And that based on extensive testing of many components, not just the battery, defendant had “confidence that [its] device is reliable for 9 years.” Id. at *4. Plaintiff alleged these statements were not reviewed or approved by the FDA. The device’s reference manual did undergo FDA review and approval as part of the PMA process. The manual contains an approved FDA statement that the device’s “battery life” was 9 years. Id. at *5. It is the distinction between “battery life” and “device life” that is at the crux of the court’s decision.

Why is that so important? Because that Fifth Circuit stated definitively that “when a claim challenges a representation the FDA blessed in the approval process, it is preempted.” Id. at *8. Could not be any clearer. Hence the reason this decision is probably more beneficial to defendants generally than to plaintiffs. Because the manufacturer’s website drew a distinction between the battery and the rest of the components, the court found the language was guaranteeing the reliability of the latter but that the FDA had only evaluated the former. Id. at *9. A verdict that the defendant’s representation was misleading or untruthful would therefore not run counter to any safety finding by the FDA. Instead, it would parallel federal regulations prohibiting false or misleading statements about medical devices.  Id. at *10-12.

The Fifth Circuit goes on to point out that where an express warranty claim survives preemption, it also still has to meet the TwIqbal pleadings standards. Therefore, an express warranty claim based on “vague allegations about representations . . . made to doctors or consumers” isn’t enough. Id. at *13. Another defense-favorable holding emphasizing that Wildman is an aberration.

Even though the case is being remanded, plaintiff hasn’t proven anything yet. Far from it. As the court points out, to prove his express warranty claim under Texas law is going to require both reliance and notice. Id. at *8n.3. It’s also going to require proof that something other than the battery caused the device to fail. Id. at *13-14. Plaintiff already amended his complaint to change from his more specific allegation that the device failed due to the battery to a more general allegation that the “neurostimulator did not conform to a nine-year device life.” Id. at *5. But does that general allegation meet the mark on the TwIqbal yardstick? The only claim that escapes preemption is a narrow one – did defendant breach a warranty about the longevity of some component other than the battery. On remand, the first issue for the district court is to determine whether plaintiff’s complaint sufficiently alleges facts to support such a claim. Again we say good luck on that.

The case may be, for the moment, revitalized, but the opinion bringing it back to life had enough juice worth the squeeze for defendants.

The warranty is “express.”

Before you say, “Well, duh,” this sometimes actually does matter. Here’s how.

Most complaints in product liability actions involving prescription medical products that include express warranty counts do so as one of a bunch of different causes of action, all pleaded seriatim (“one after another,” in non-lawyer speak).  Believe it or not, lawyers get tired of repeating themselves – especially those (like our adversaries) who don’t bill by the hour.  Thus, in complaints, we usually see each cause of action in multi-count complaints begin with a paragraph “incorporating by reference” facts that were pleaded earlier in the document.

That can be fatal to express warranty claims – because the warranty must be “express” – whereas other claims, such as failure to warn, can be maintained on the basis of allegedly omitted facts.  Thus, incorporation by reference (or pleaded facts) that only incorporates allegations of omitted facts isn’t enough to plead express warranty.  This is one more way to make express warranty claims go bye-bye (see our TwIqbal cheat sheet for others), and it appears that, increasingly, plaintiffs have been called out for this failing.

The only appellate prescription medical product case that we’ve seen on this point is Rite Aid Corp. v. Levy-Gray, 876 A.2d 115 (Md. App. 2005), aff’d on other grounds, 894 A.2d 563 (Md. 2006).  In Levy-Gray, an omission by the defendant pharmacist of a statement in the manufacturer’s labeling didn’t cut it as a basis for express warranty:

[I]n order to have an express warranty there must be an affirmative statement of fact by the seller about the goods.  A claim that there is a warranty by omission is at odds with the UCC definition of an express warranty.  Here, the manufacturer’s package insert . . . contained, inter alia, the following statement:  [statement omitted]  The omission of this statement, which was relevant to the negligence claim asserted by Plaintiff, and is of some relevance to the medical causation issues, is not relevant to the creation of an express warranty.

Id. at 126 (citation omitted) (emphasis added).

Several federal district courts have made the same point.  The issue arose in the Testosterone MDL, where the “plaintiffs have pointed to no statement that constitutes an express warranty.”  In re Testosterone Replacement Therapy Products Liability Litigation, 2014 WL 7365872, at *8 (N.D. Ill. Dec. 23, 2014).  “[P]laintiffs must plead more than misstatements and omissions to state a claim for breach of express warranty.”  Rather, plaintiff “must point to a specific affirmation or promise.”  Id.  In Young v. Bristol-Myers Squibb Co., 2017 WL 706320 (N.D. Miss. Feb. 22, 2017), the court raised the issue sua sponte (meaning “on its own”), pointing out:

[T]he Court notes that, while not raised by the defendants, [plaintiff’s] breach of express warranty claim must fail to the extent it is based on alleged omissions in [the drug’s] prescribing information. An omission is neither an affirmation of fact nor a promise.

Id. at *15 n.10 (citation omitted).

Non-express “express” warranty claims also failed in House v. Bristol-Myers Squibb Co., 2017 WL 55876 (W.D. Ky. Jan. 4, 2017), because allegations of omissions were insufficient:

[Plaintiff] cannot base her express warranty claim on allegations that the Prescribing Information fails to include the “true risks” of the drugs and does not contain “adequate information[.]”  An express warranty is created by an “affirmation of fact or promise,” not an omission.

Id. at *6 (citations omitted).  In Vakil v. Merck & Co., 2016 WL 7175638 (D.N.J. Dec. 7, 2016), the court disposed of a warranty claim under Virginia law (significant because Virginia doesn’t have strict liability) observing that “during oral argument” plaintiff “indicated that his theory was more akin to an omission. Therefore, summary judgment is granted to Defendants as to the breach of express warranty claim.”  Id. at *5.

We also looked outside the drug/device sphere, and were surprised by the relative paucity of precedent.  Either plaintiffs aren’t pleading omissions in express warranty claims or defendants are letting them get away with it.  There’s one citable appellate decision, and it’s almost 30 years old.  Sidco Products Marketing, Inc. v. Gulf Oil Corp., 858 F.2d 1095, 1099 (5th Cir. 1988) (“Omissions, however, are not affirmative representations of any sort and thus cannot support a warranty claim, because express warranties must be explicit.”) (applying Texas law).  Young cited Sidco.  So did the next two cases – coincidentally, both from Missouri:

Plaintiffs repeatedly allege that the press releases and advertisements all failed to disclose the defect, so, to the extent their express warranty claims are based on advertisements and promotional materials, these claims are based on omissions. A breach of express warranty claim, however, cannot be premised on an omission.

In re General Motors Corp. Anti-Lock Brake Products Liability Litigation, 966 F. Supp. 1525, 1531 (E.D. Mo. 1997), aff’d on other grounds, 172 F.3d 623 (8th Cir. 1999)

Plaintiff, therefore, bases liability not on what the documents provide, but on what they do not provide.  The law is clear that [plaintiff] may not recover under this theory because omissions are not affirmative representations of any sort and thus cannot support a warranty claim, because express warranties must be explicit.

Cambridge Engineering, Inc. v. Robertshaw Controls Co., 966 F. Supp. 1509, 1524 (E.D. Mo. 1997) (quoting Sidco).

Likewise, defendants in tobacco product liability cases have not allowed plaintiffs to pass off “warranty by omission” as an “express warranty.”  Witherspoon v. Philip Morris, Inc., 964 F. Supp. 455, 465 (D.D.C. 1997).  Omissions of this and that are “at odds with the definition of express warranty.  Plaintiff has not pleaded an express promise on the part of Defendant.”  Id.  Accord Hughes v. Tobacco Institute, 2000 WL 34004261, at *10 (E.D. Tex. May 5, 2000) (“nondisclosure . . . does not create an express warranty”), aff’d on other grounds, 278 F.3d 417 (5th Cir. 2001).

Another appellate decision actually exists, but it’s non-citable:

Essentially, [plaintiff] bases his claim not upon an express affirmation of fact or description of the goods, but instead, upon the omission of language such as simulated or imitation.  [Plaintiff] has presented no authority that an omission of fact can create an express warranty.

Pocino v. Jostens, Inc., 2006 WL 1163785, at *5 (Cal. App. May 3, 2006).

Finally, we found one other case, on point, not citing anything beyond the relevant UCC section, but reaching the same result:  “[A] failure to include information in the specification sheet is the exact opposite of an express warranty.”  “[O]missions . . . are simply insufficient to support a breach of warranty.”  Cannon Technologies, Inc. v. Sensus Metering Systems, Inc., 734 F. Supp.2d 753, 769-70 (D. Minn. 2010).

Express warranty claims deserve attention in prescription medical product liability litigation.  Some courts allow such claims to escape preemption.  Others give express warranty claims a longer (or at least different) statute of limitations.  Such claims should not be allowed to persist when there is no basis for them, so any express warranty claim based on omissions should be challenged at the first opportunity.