In re Breast Implant Product Liability

• Decision Date: 01 June 1998
• Docket Number: No. 24793.,24793.
• Citation: 331 S.C. 540,503 S.E.2d 445
• Parties: In re BREAST IMPLANT PRODUCT LIABILITY LITIGATION.
• Court: South Carolina Supreme Court

331 S.C. 540

503 S.E.2d 445

In re BREAST IMPLANT PRODUCT LIABILITY LITIGATION.

No. 24793.

Supreme Court of South Carolina.

Heard February 2, 1998.

Decided June 1, 1998.

Terry E. Richardson, Jr., and A. Hoyt Rowell, III, both of Ness, Motley, Loadholt, Richardson & Poole, Charleston; D. Michael Parham, of Parham & Smith, Greenville; Kenneth M. Suggs, of Suggs & Kelly, Columbia; Joseph G. Wright, of Wright Law Offices, Anderson; Liaison Counsel for Plaintiffs.

Ernest J. Nauful, Jr.; William L. Pope, of Pope & Rodgers; and Andrew F. Lindemann, of Ellis, Lawhorne, Davidson & Sims, Columbia, Liaison Counsel for Healthcare Defendants.

William M. Grant, Jr., of Grant & Leatherwood, P.A., Greenville, Liaison Counsel for Manufacturer Defendants.

Heyward E. McDonald, of McDonald, McKenzie, Rubin, Miller & Lybrand, Columbia, for Amicus South Carolina Dental Association.

Alexia Pittas-Giroux, of Cordray Law Firm, Charleston, for South Carolina Trial Lawyers.

William A. Prince, West Columbia, for Amicus South Carolina Hospital Association.

Stephen P. Williams, Columbia, for Amici South Carolina Medical Association & American Medical Association.

TOAL, Acting Chief Justice:

We granted a writ of certiorari to review certain questions pertaining to the liability of health care providers ("Healthcare Defendants") for use of medical devices, such as breast implants.

FACTUAL/PROCEDURAL BACKGROUND

In August 1993, Chief Justice David W. Harwell assigned Judge Henry F. Floyd to dispose of all pre-trial motions and other matters arising out of the breast implant litigation then pending, and to be subsequently filed, in this state's court system. In April 1995, Chief Justice Ernest A. Finney, Jr. issued an order granting permission to Judge Floyd to promulgate a Case Management Order regulating pre-trial proceedings in the breast implant cases.

In November 1996, Judge Floyd issued an order addressing the defendants' motion to dismiss the master complaint. The circuit court dismissed certain of the causes of action in the master complaint. Among the causes of action not dismissed were those for strict liability, breach of implied warranties, and breach of express warranty.¹ After Plaintiffs proposed an amended master complaint, adding a cause of action for the common law warranty of soundness and quality, the defendants again moved to dismiss the complaint. Judge Floyd denied the motion. The circuit court then, sua sponte, moved to certify to this Court two questions related to the applicability of S.C.Code Ann. § 15-73-10 (1976) and Restatement (Second) of Torts § 402A to Healthcare Defendants.

In addition, Healthcare Defendants petitioned this Court for a writ of certiorari to review Judge Floyd's orders regarding the applicability of strict liability and warranty causes of action to Healthcare Defendants. In March 1997, we issued an order granting Healthcare Defendants' petition. We found that there is no provision, under Rule 228(a), SCACR, for this Court to answer questions certified by a state circuit judge; however, we agreed with Judge Floyd that very important questions of law need to be answered at this time. Accordingly, the request for certification was denied, but the petition for a writ of certiorari was granted.² Accordingly, the following questions are before us:

1. May a health care provider be held strictly liable under S.C.Code Ann. § 15-73-10 for a medical device or instrument used in the course of treating a patient?

2. May a health care provider be held liable for the breach of implied warranties under Article II of the Uniform Commercial Code with regard to a medical device or instrument used in the course of treating a patient?

3. May a health care provider be held liable for the breach of an express warranty under Article II of the Uniform Commercial Code with regard to a medical device or instrument used in the course of treating a patient?

4. May a health care provider be held liable for the breach of a common law warranty of soundness and quality with regard to a medical device or instrument used in the course of treating a patient?

LAW/ANALYSIS

A. STRICT PRODUCTS LIABILITY

In his November 1996 order, Judge Floyd ruled that a health care provider may be held strictly liable under the Defective Products Act, S.C.Code Ann. § 15-73-10 to -30 (1976). Before this Court, Healthcare Defendants argue that a health care provider cannot be held strictly liable under S.C.Code Ann. § 15-73-10 for a medical device or instrument used in the course of treating a patient. We agree.

1. SOUTH CAROLINA AUTHORITY

Section 15-73-10 provides:

(1) One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm caused to the ultimate user or consumer, or to his property, if

(a) The seller is engaged in the business of selling such a product, and

(b) It is expected to and does reach the user or consumer without substantial change in the condition in which it is sold.

(2) The rule stated in subsection (1) shall apply although

(a) The seller has exercised all possible care in the preparation and sale of his product, and

(b) The user or consumer has not bought the product from or entered into any contractual relation with the seller.

S.C.Code Ann. § 15-73-10. This provision, which was adopted by the General Assembly in 1974, codified, nearly verbatim, Restatement (Second) of Torts § 402A.

The determinative issue in this case is whether a health care provider, such as a hospital or physician, is a "seller" within the meaning of section 15-73-10. Plaintiffs argue that section 15-73-10 does not provide an exemption for health care providers; therefore, the statute is binding upon all "sellers," including health care providers. They assert that unlike S.C.Code Ann. § 44-43-10 (1985),³ which specifically exempts providers of items such as blood products from implied warranties of merchantability and fitness,⁴ no such exemption has been set forth in section 15-73-10. This is a reasonable argument based on rules of statutory construction; however, it fails to take into account case precedent that has specifically addressed this issue. South Carolina cases, as well as persuasive authority from other jurisdictions, dictate that health care providers are not "sellers" under Restatement § 402A. DeLoach v. Whitney, 275 S.C. 543, 273 S.E.2d 768 (1981) provides the analytic starting point for answering the question before us. In DeLoach, the plaintiff had won four of defendant's tires in a raffle. The defendant installed these tires on plaintiffs car. During the installation, a deteriorated valve stem, not a part of the tire, was left on the wheel. Some time later, the valve stem ruptured while the car was being driven, causing the car to go off the road, thereby injuring plaintiff. The plaintiff brought an action against the defendant under strict tort liability. The defendant moved for a directed verdict on the issue of strict liability, arguing there had been no sale to bring the transaction within section 15-73-10. The trial court denied the motion, finding services to be included within the scope of section 15-73-10. We disagreed. Thus, DeLoach held that services are not included within the scope of section 15-73-10.

However, DeLoach also contains language which rejects the argument that strict liability includes the negligent installation of a non-defective product. Thus, the opinion is not entirely clear whether it was deciding that services generally were excluded from the scope of section 15-73-10, or whether just negligent services provided in connection with non-defective products were excluded from section 15-73-10.

This question was clarified by Samson v. Greenville Hospital System, 297 S.C. 409, 377 S.E.2d 311 (1989), wherein we explicitly stated that section 15-73-10 did not apply to services. Citing DeLoach, we declared:

South Carolina Code Ann. § 15-73-10 (1976), which is based on Section 402A of the Restatement (Second) of Torts, imposes strict liability in tort upon the suppliers of defective products. This section applies only to products and not to services.

Samson, 297 S.C. at 410, 377 S.E.2d at 311 (emphasis added). The issue in Samson was whether blood was a product or service under section 15-73-10. We found that the Legislature did not intend for blood to be classified as a product. Thus, when analyzed together, DeLoach and Samson teach that providers of services may not be held liable under section 15-73-10. The pivotal question then, in this case, is whether health care providers, including those who perform breast implant procedures, offer services or products. In analyzing this question, we must consider whether the essence of the transaction is the provision of a service or a product. We hold that health care providers who perform breast implant procedures are, in essence, providing a service. Although the breast implant procedure requires the use of a product, the implant, the health care provider is fundamentally and predominantly offering a service. The provider must have medical knowledge and skill to conduct the procedure. He must advise the patient of the medical consequences and must recommend to the patient the preferable type of procedure. The product may not be purchased independently of the service. One does not "buy" a breast implant procedure in the same way as one would buy a product, such as a lawnmower. At its heart, the breast implant procedure is a service and not a product.

Case law from other jurisdictions supports the product/service distinction delineated in South Carolina cases: "In general, the courts have refused to apply the concept of strict liability in tort to a person rendering professional or nonprofessional services, where injury occurs through a defective product used by the person rendering such services, or as a result of allegedly defective...