Healey v. I–Flow, LLC

• Decision Date: 10 April 2012
• Docket Number: Civ. No. 09–3541 (JRT/JJK).
• Citation: 853 F.Supp.2d 868
• Parties: Joseph L. HEALEY, III, an individual, Plaintiff, v. I–FLOW, LLC, formerly known as I–Flow Corporation; DJO, LLC; and DJO Incorporated, Defendants.
• Court: U.S. District Court — District of Minnesota

853 F.Supp.2d 868

Joseph L. HEALEY, III, an individual, Plaintiff,

v.I–FLOW, LLC, formerly known as I–Flow Corporation; DJO, LLC; and DJO Incorporated, Defendants.

Civ. No. 09–3541 (JRT/JJK).

United States District Court,

D. Minnesota.

April 10, 2012.

Charles H. Thronson, James T. Blanch, Richard E. Mrazik, Parsons Behle & Latimer, Colin P. King, Jessica A. Andrew, Paul M. Simmons, Dewsnup, King & Olsen, Salt Lake City, UT, Richard A. Lockridge, Yvonne M. Flaherty, Lockridge Grindal Nauen PLLP, Minneapolis, MN, for Plaintiff.

Christian M. Ryba, Mitchell P. Morinec, Robert J. McLaughlin, Segal McCambridge Singer & Mahoney, Chicago, IL, Michael C. Lindberg, Benjamin A. Johnson, Johnson & Lindberg, PA, Bradley J. Lindeman, Bryan R. Browning, Elizabeth Snyder Poeschl, Jon R. Russell, Meagher & Geer, PLLP, Minneapolis, MN, for Defendants.

ORDER AND MEMORANDUM

JEFFREY J. KEYES, United States Magistrate Judge.

This matter is before the Court on Plaintiff's Motion for Leave to Amend his Complaint to Assert a Claim for Punitive Damages (Doc. No. 66). Based on the files, and all the records and proceedings herein, and on the arguments of counsel, IT IS HEREBY ORDERED that:

1. Plaintiff's Motion for Leave to Amend his Complaint to Assert a Claim for Punitive Damages (Doc. No. 66), is DENIED; and

2. The attached Memorandum is incorporated by reference.

MEMORANDUM

I. Background

I–Flow manufactures Pain Buster® pain pumps, which are “medical device[s] intended to deliver, via catheter, a continuous dose of pain medication directly into the operative site immediately following shoulder surgery.” (Doc. No. 1, Compl. ¶ 8.) It got into the business of manufacturing pain pumps in 1996 when it acquired the pain pump product line of another manufacturer. DJO, LLC is a pain pump distributor, and DJO Incorporated is a holding company of DJO, LLC (collectively, “DJO”).

In 1998, I–Flow submitted a 510(k) application to the FDA for clearance to market its own version of the pain pump with the indication that it was intended for use in intraoperative sites for postoperative pain management after surgery, and this application was approved. Also in 1998, I–Flow entered into a “Distribution Agreement” with DJO, LLC, which provided that DJO, LLC would become the exclusive United States and Canadian distributor for orthopedic surgery applications of I–Flow's PainBuster® pain pumps. Pursuant to the Distribution Agreement, I–Flow was responsible for obtaining all regulatory clearances, including those with the FDA, for the pain pumps distributed by DJO, LLC. I–Flow then submitted a new 510(k) application to the FDA in August 1998 to obtain clearance to expand the indications for use that would appear on the labeling of its product to state that: “The PainBuster Infusion Kit is intended to provide continuous infusion of a local anesthetic directly into the intraoperative or intra-articular site for postoperative pain management.” (Doc. No. 69, Declaration of Paul Simmons (“Simmons Decl.”) ¶ 3, Ex. 2.) The addition of “intra-articular site” to the indications for use was a reference to utilizing the pain pump to infuse an anesthetic in the joint space—the “intra-articular site”—for a twenty-four to forty-eight hour period after orthopedic surgery. The FDA did not, however, grant I–Flow the clearance to market its products with the specific indication for use in an intra-articular site.

Plaintiff had shoulder surgeries on October 1, 2002, and May 18, 2004, and alleges that his doctors implanted I–Flow manufactured Pain Buster® pain pumps in his shoulder joint following the surgeries to administer an anesthetic for several days immediately after the surgeries to relieve pain. Plaintiff claims that this continuous injection of anesthetic medication into the shoulder joint space (the “intra-articular space” or the “synovial cavity”) destroyed his shoulder cartilage—a debilitating condition known as glenohumeral chondrolysis.

Plaintiff filed this case against Defendants on December 11, 2009, asserting claims for negligence and civil conspiracy between I–Flow and DJO. (Doc. No. 1.) According to Plaintiff, “Defendants never performed any safety testing or inquiry for [intra-articular space] application, and three times the FDA turned down I–Flow's applications for clearance to market the pumps for orthopedic or intra-articular uses because of the lack of safety data.” (Doc. No. 68, Mem. in Supp. of Pl.'s Mot. for Leave to Amend his Compl. to Assert a Claim for Punitive Damages (“Pl.'s Mem.”) 1.) Plaintiff asserts that even though Defendants had not established the safety of the use of the I–Flow pain pump in orthopedic surgery in an intra-articular space and had not obtained FDA clearance to market it for that use, “Defendants engaged in a lucrative and longstanding nationwide campaign to do precisely what the FDA had told Defendants they could not do: Promote their pain pumps to orthopedic surgeons for intra-articular uses, which Defendants successfully did with nary a word to anyone about the untested, uncleared, and literally experimental nature of their product for shoulder stabilization procedures.” ( Id.) Plaintiff further contends that if I–Flow had done a meaningful review of the medical literature to determine whether use of a pain pump in the joint space following orthopedic surgery was safe, “I–Flow would have learned that continuously exposing articular cartilage to anesthetics, or even to normal saline, can have a toxic effect on cartilage cells.” ( Id. at 6.) Plaintiff alleges that I–Flow learned about an association between pain pumps and chondrolysis in 2005 or early 2006 (i.e., after Plaintiff's second surgery in 2004), but did nothing about it until January 2007, when it added a warning about chondrolysis to the directions for use of the product.

On November 15, 2011, Plaintiff filed a Motion for Leave to Amend his Complaint to Assert a Claim for Punitive Damages, which is the motion currently pending before the Court. (Doc. No. 66.) In that motion, Plaintiff contends that he should be allowed to amend his Complaint to seek punitive damages because Defendants acted with deliberate disregard of his rights and safety by marketing and promoting the pain pump without researching or testing the safety of its use in intra-articular sites, by disregarding the FDA's denial of clearance, and by failing to inform doctors and patients of the FDA's denial.

II. AnalysisA. Standard of Review

In diversity actions in this Court, the pleading of punitive damage claims must generally conform to the requirements of Minnesota Statutes section § 549.191. Ulrich v. City of Crosby, 848 F.Supp. 861, 866 (D.Minn.1994); see also Bunker v. Meshbesher, 147 F.3d 691, 696 (8th Cir.1998). Specifically, section 549.191 provides:

Upon commencement of a civil action, the complaint must not seek punitive damages. After filing the suit a party may make a motion to amend the pleadings to claim punitive damages. The motion must allege the applicable legal basis under section 549.20 or other law for awarding punitive damages in the action and must be accompanied by one or more affidavits showing the factual basis for the claim. At the hearing on the motion, if the court finds prima facie evidence in support of the motion, the court shall grant the moving party permission to amend the pleadings to claim punitive damages. For purposes of tolling the statute of limitations, pleadings amended under this section relate back to the time the action was commenced.

Section 549.191 thus requires the court to perform a gatekeeping function to screen out “unmeritorious claims for punitive damages.” Swanlund v. Shimano Indus. Corp., 459 N.W.2d 151, 154 (Minn.Ct.App.1990). Our federal court utilizes section 549.191's gatekeeping procedure in diversity cases because it discourages forum shopping between state and federal court. This also reduces the influence that a “plaintiff's ability to brandish a claim for punitive damages as a tool for promoting an advantageous settlement or otherwise advancing his claims” may have on his selection of a federal forum. Zeelan Indus., Inc. v. deZeeuw, 706 F.Supp. 702, 705 (D.Minn.1989).

Under section 549.191, a plaintiff who seeks to assert a punitive damage claim must first obtain leave of the Court to do so, based on a prima facie showing of entitlement. See Ulrich, 848 F.Supp. at 867. A plaintiff need not demonstrate an entitlement to punitive damages per se, but only an entitlement to allege such damages. If the Court finds such prima facie evidence, “the court shall grant the moving party permission to amend the pleadings to claim punitive damages.” Id.

“[A] prima facie case simply means one that prevails in the absence of evidence invalidating it.” Blumberg v. Palm, 238 Minn. 249, 253, 56 N.W.2d 412, 415 (1953); McKenzie v. N. States Power Co., 440 N.W.2d 183, 184 (Minn.Ct.App.1989) (“Prima facie evidence is evidence which, if unrebutted, would support a judgment in the party's favor.”). Thus, under the strictures of section 549.191, “the Court reviews the evidence in support of a Motion to Amend as the Court would review a Motion for a Directed Verdict—now denominated in the Federal Rules of Civil Procedure as a Motion for the Entry of Judgment as a matter of law.” Ulrich, 848 F.Supp. at 867;see also Nw. Airlines, Inc. v. Am. Airlines, Inc., 870 F.Supp. 1499, 1502–03 (D.Minn.1994) (stating that evidence submitted in opposition to the motion is not considered). In other words, in reaching the determination whether Plaintiff has established a prima facie case for punitive damages, the Court makes no credibility rulings, and does not consider any challenge, by cross-examination or otherwise, to the Plaintiff's proof, but the Court must carefully scrutinize the evidence presented by the moving party to make sure that it amounts to a prima facie showing that the substantive requirements for punitive damages have been met. Ulrich, ...