Meza v. Southern California Physicians Ins. Exchange
| Decision Date | 26 March 1998 |
| Docket Number | No. C026203,C026203 |
| Citation | 62 Cal.App.4th 709,73 Cal.Rptr.2d 91 |
| Court | California Court of Appeals Court of Appeals |
| Parties | , 98 Cal. Daily Op. Serv. 2211, 98 Daily Journal D.A.R. 3039 Katherine MEZA, Plaintiff and Appellant, v. SOUTHERN CALIFORNIA PHYSICIANS INSURANCE EXCHANGE, Defendant and Respondent. |
Latham & Watkins, Milton A. Miller and Michael Bruce Abelson, Los Angeles, for Defendant and Respondent.
In June 1994 Dr. Rumi Lakha proposed to treat a wart on Katherine Meza's left index finger by injecting melaleuca oil (commonly known as tea tree oil), a natural distillate of the leaves and bark of the melaleuca tree, into the finger. Meza agreed to this procedure. When she next visited Dr. Lakha's office, he performed the injection. Less than 24 hours later, necrosis and infection in Meza's finger, caused by the injection, forced the partial amputation of the finger.
Meza sued Dr. Lakha for malpractice. During discovery in that action (which was subsequently stayed by Lakha's filing for bankruptcy), Meza learned that Southern California Physicians Insurance Exchange (SCPIE), Lakha's malpractice carrier, was defending him but denying coverage based on the following policy exclusion: "SCPIE will ... [not] pay damages because of any claim which arises out of or results from any of the following: [p] ... The use, administration or prescription of any drug ... disapproved or not yet approved by the United States Food and Drug Administration for treatment of human beings, unless the named insured physician has requested approval from SCPIE for the use, administration or prescription of such drug ..., and SCPIE has given such approval in writing."
Meza then filed this declaratory relief action against SCPIE, seeking a declaration that the policy afforded coverage.
At a trial to the court, the evidence showed the following:
Melaleuca oil is a traditional homeopathic remedy intended to be applied topically to the skin. The FDA has never approved melaleuca oil as a drug, and its manufacturers and distributors have never sought such approval. Dr. Lakha never requested or received approval from SCPIE to use or administer melaleuca oil.
The trial court awarded judgment to SCPIE as follows:
Meza appeals. We shall affirm the judgment.
Was the trial court's interpretation of the exclusion correct? Meza contends that the court misconceived the fundamental issue. According to her, the question is not whether the FDA has approved melaleuca oil as a drug but whether it is a drug at all. If no therapeutic claims have ever been made for a substance, she reasons, then the substance never comes within the FDA's purview for approval or disapproval as a drug. Therefore it makes no sense to say that the FDA has "not yet approved" the substance as a drug--it simply does not fall within the category "drug." Furthermore, according to Meza, if a substance is not a drug as defined by the FDA, a physician's use or administration of the substance cannot turn it into a drug for purposes of SCPIE's policy exclusion. Therefore, Meza concludes, the exclusion cannot apply.
We reject Meza's conclusion because it ultimately depends on the false premise that the term "drug" denotes an inherent property which a substance either has or lacks. This premise does not comport with the ordinary understanding of the term, which would normally control our interpretation of the term in an insurance policy. (AIU Ins. Co. v. Superior Court (1990) 51 Cal.3d 807, 821-822, 274 Cal.Rptr. 820, 799 P.2d 1253.) Nor does it comport with the definition contained in the Federal Food, Drug, and Cosmetic Act (21 U.S.C. § 301 et seq. [hereafter "the Act"] ), administered by the FDA. (Cf. Montrose Chemical Corp. v. Admiral Ins. Co. (1995) 10 Cal.4th 645, 666-667, 42 Cal.Rptr.2d 324, 913 P.2d 878 [].) According to either definition, a substance's actual or intended use or administration may determine whether it is a drug within SCPIE's policy exclusion in a given set of circumstances.
We may consult the dictionary to determine the ordinary understanding of a term used in an insurance policy. (A.B.S. Clothing Collection, Inc. v. Home Ins. Co. (1995) 34 Cal.App.4th 1470, 1480, 41 Cal.Rptr.2d 166.) Doing so, we find that a drug is, among other things, " ... a chemical substance used in the treatment, cure, prevention, or diagnosis of disease or used to otherwise enhance physical or mental well-being...." (Random House Dict. (2d ed.1987) p. 600), or " ... a substance used as a medicine or in making medicines for internal or external use...." (Webster's New Internat. Dict. (3d ed.1993) p. 695), or "[t]he general name of substances used in medicine; any substance, vegetable, animal, or mineral, used in the composition or preparation of medicines; any substance used as a medicine" (Black's Law Dict. (6th ed.1990) p. 497). 1 Under all of these definitions it is the use of a substance for medical purposes, not some inherent property of that substance, which makes it a "drug." Because Dr. Lakha used melaleuca oil for a medical purpose, it was a drug in the ordinary meaning of the word, and one which had not been approved by the FDA; thus the policy exclusion applies.
If we presume, however, that the policy exclusion's reference to the FDA implicitly incorporates by reference the Act's definition of "drug" and apply that definition (Montrose Chemical Corp., supra, 10 Cal.4th at pp. 666-667, 42 Cal.Rptr.2d 324, 913 P.2d 878), we arrive at the same result.
As relevant, the Act provides: "The term 'drug' means (A) articles recognized in the official United States Pharmacopoeia, official Homeopathic Pharmacopoeia of the United States, or official National Formulary, or any supplement to any of them; and (B) articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man or other animals; and (C) articles (other than food) intended to affect the structure or any function of the body of man or other animals; and (D) articles intended for use as a component of any article specified in clause (A), (B), or (C) ...." (21 U.S.C. § 321(g)(1); italics added.) It is undisputed that melaleuca oil is not recognized in any of the publications listed in section 321(g)(1)(A). Thus the case turns on whether, under the facts presented here, melaleuca oil was "intended for use" in any of the ways described in section 321(g)(1)(B), (C), or (D).
Meza contends that the only intent relevant to this question is that of the substance's manufacturers or distributors, as shown by whether or not they have claimed that the substance is safe and efficacious for medical use. The statute does not say so in plain terms, however, and Meza cites no authority supporting her construction of the statute. Instead, she distills a "proposition" to this effect from federal court decisions construing the Act originally cited by SCPIE, none of which actually so holds. Those decisions, which stem either from governmental in rem seizures of "misbranded" substances or from challenges to proposed FDA regulations, cast manufacturers or distributors of challenged substances as the litigants; therefore it is necessarily the manufacturers' or...
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