Ministry of Health v. Shiley

• Decision Date: 01 August 1994
• Docket Number: No. SACV 93-691-GLT[GJ].,SACV 93-691-GLT[GJ].
• Parties: MINISTRY OF HEALTH, PROVINCE OF ONTARIO, CANADA; Her Majesty in Right of the Province of Manitoba, Plaintiffs, v. SHILEY INCORPORATED, a California corporation, formerly known as Pfizer Hospital Products Group, Inc., a Delaware corporation, Defendants.
• Court: U.S. District Court — Central District of California

858 F. Supp. 1426

MINISTRY OF HEALTH, PROVINCE OF ONTARIO, CANADA; Her Majesty in Right of the Province of Manitoba, Plaintiffs, v. SHILEY INCORPORATED, a California corporation, formerly known as Pfizer Hospital Products Group, Inc., a Delaware corporation, Defendants.

No. SACV 93-691-GLTGJ.

United States District Court, C.D. California.

August 1, 1994.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

James T. Capretz, Law Offices of James T. Capretz, Newport Beach, CA, for plaintiffs.

Pierce O'Donnell, Kenneth A. Freeling, Kaye, Scholer, Fierman, Hays & Handler, Los Angeles, CA, Frank C. Rothrock, John R. Lister, Palimieri, Tyler, Wiener, Wilhelm & Waldron, Irvine, CA, for defendants.

RULING ON MOTION TO DISMISS

TAYLOR, District Judge.

In this defective heart valve case brought by Canadian plaintiffs, the court rejects a consistent line of developing authority, and holds plaintiffs' claims are not subject to blanket preemption by the Medical Device Amendments of 1976 (21 U.S.C. § 301 et seq.). However, under the Piper rule, the court applies the forum non conveniens doctrine, holding that Canada is the proper trial forum.

I. BACKGROUND

Plaintiffs, the Canadian provinces of Manitoba and Ontario, provide health care insurance for all of their citizens. Eight hundred of their insureds have received the Shiley Convexo-Concave heart valve, which fractures in a small percentage of patients. Plaintiffs seek 1) a judicial declaration that they are entitled to reimbursement by Defendants for past and future medical services and benefits paid to their insureds because of valve-related injuries, and 2) damages for medical services that have been paid in the past. Plaintiffs assert diversity jurisdiction under 28 U.S.C. § 1332.

Defendants move to dismiss the claim, asserting three arguments: (1) This court lacks subject matter jurisdiction because the claims fall below the requisite $50,000 in controversy; (2) The claims are all preempted by the Medical Device Amendments of 1976 (21 U.S.C. § 301 et seq.); and (3) Canada is a more appropriate forum under the forum non conveniens doctrine.

II. DISCUSSION

For the reasons stated below the court concludes it has subject matter jurisdiction and the claims are not subject to blanket preemption. However, the court determines Canada is the appropriate forum under the forum non conveniens doctrine.

1. SUBJECT MATTER JURISDICTION

Defendants argue that plaintiffs have failed to allege the requisite amount in controversy for the damage claims already incurred. Further, they argue that plaintiffs' declaratory relief claims fail to state a "case or controversy" as required by Article III of the Constitution.

a. Case or Controversy

Article III requires that, as a prerequisite to standing, a plaintiff present a "case or controversy." As the Supreme Court has explained:

Abstract injury is not enough. The plaintiff must show that he "has sustained or is immediately in danger of sustaining some direct injury" ... and the injury or threat of injury must be both "real and immediate," not "conjectural" or "hypothetical."

City of Los Angeles v. Lyons, 461 U.S. 95, 101-2, 103 S.Ct. 1660, 1664-65, 75 L.Ed.2d 675 (1983) (citations omitted).

Despite the seemingly clear statement of the rule, its application to individual situations is highly contextual: "It is difficult to characterize the point at which a threat of future injury becomes `credible,' and the caselaw defies easy generalization." Smith v. City of Fontana, 818 F.2d 1411, 1421 (9th Cir.1987), citing Sample v. Johnson, 771 F.2d 1335, 1340-43 (9th Cir.1985).

In Nelsen v. King County, 895 F.2d 1248 (9th Cir.1990) the Ninth Circuit noted: "While it is generally acknowledged that the threat of future harm may confer standing on a litigant, the degree of threat that is required has never been precisely articulated." Id. at 1250. The court reviewed cases that had attempted to iron out the requisite risk of future harm, and concluded: "Whether the standard employed is defined as `credible threat,' `sufficient likelihood,' or `demonstrated probability,' our analysis is assisted by a few basic principles that serve to guide our inquiry." Id. According to one of these principles, a plaintiff must show more than "a probabilistic estimate that the general circumstances to which the plaintiff is subject may produce future harm, but rather an individualized showing that there is `a very significant possibility' that the future harm will ensue." Id. at 1250 (citation omitted). The court also observed that "there is a trend towards imposing tighter restrictions on claims of standing for injunctive claims predicated on allegedly recurrent injuries." Id. at 1251. Accord Stewart v. M.M. & P. Pension Plan, 608 F.2d 776, 785 (9th Cir. 1979), ("For a case or controversy in the constitutional sense, there must be an issue which is not remote and hypothetical but which is real and present.")

However, the Ninth Circuit has upheld claims for declaratory relief for future harm. Coral Construction Co. v. King County, 941 F.2d 910 (9th Cir.1991) (permitting construction company's declaratory and injunctive relief action challenging the validity of a minority set-aside program). Of particular relevance to the instant case is Sample v. Johnson, 771 F.2d 1335, 1340-43 (9th Cir.1985), in which the court dismissed as moot¹ two longshoremens' claims for a declaration that the government had an obligation to conduct claim hearings and render timely decisions. In dicta the court discussed what bearing statistical evidence would have on the "case or controversy" requirements:

The instant matter is the paradigmatic case for a statistical showing of likely recurrent injury. Here, the predicate to a claim is a physical injury. There are few occurrences that are more assiduously recorded than physical injuries.... There are many likely sources for establishing the probability that a longshoreman will be seriously injured.... With such statistics, a prediction could be made as to whether one with the same work-life expectancy as plaintiff is likely to experience another claimable injury.

The cases have also not indicated what degree of probability is required where a plaintiff can show a likely recurrence of injury. Query whether the test should be one of more likely than not, i.e.... more than fifty-fifty, or whether the test should be one where probability, in the strict sense, is not required, but merely some significant possibility.... We prefer to describe "probability" qualitatively, as requiring a very significant possibility, and not quantitatively, as mandating a "greater than fifty percent" likelihood.

Id. at 1343.

In the present case, plaintiffs present statistical evidence showing a significant possibility of future injury to plaintiffs' insureds, which gives them standing. According to the showing made, the estimated fracture rate for one type of subject heart valve ranges from .02 percent to 1.24 percent per year, depending on the valve size and the "weld date" (date of manufacture). The estimated fracture rate for the other type of valves involved, which were implanted only in Canada, ranges from .19 to 2.25 percent per year. Given these statistics and the fact that 800 Canadians have been implanted with one of the two valves, plaintiffs have shown future harm that is more than hypothetical. If the overall fracture rate were one percent per year, plaintiffs could expect eight implantees to experience fracture and attendant medical complications after one year. After five years, approximately forty implantees would have experienced fracture. These injuries are statistically predictable, and thus are "significantly possible" in plaintiffs' citizens. Since plaintiffs will have to pay for the medical care of any injured implantee, their injury is "real and present" and meets Article III's case or controversy requirement.

b. Amount in Controversy

Defendants further argue that, since the only actual damages requested by plaintiffs are $7,900 for a single insured's valve replacement, plaintiffs have failed to meet the jurisdictional minimum. However, since the court has concluded plaintiffs have standing for their declaratory relief claim, plaintiffs may meet their jurisdictional minimum through that claim instead of their claim for present damage. Hunt v. Washington State Apple Advertising Commission, 432 U.S. 333, 97 S.Ct. 2434, 53 L.Ed.2d 383 (1977).

Although Hunt involved federal question jurisdiction, 28 U.S.C. § 1331, its analysis of the amount in controversy requirement for declaratory relief actions is applicable here. The court stated, "it is well established that the amount in controversy is measured by the value of the object of the litigation." Id. at 347, 97 S.Ct. at 2443 (emphasis added).

In this case, the "value of the object of the litigation" is the amount of money that plaintiffs will have to pay for medical care of their insureds should a heart valve fracture. Obviously, neither the exact number of fractures nor the time period of fracture is a known quantity. However, if the fracture rate were one percent per year, eight implantees would experience fracture within the first year after implantation.

Defendants argue that the $50,000 amount in controversy requirement is not met because aggregation of individual claims to reach the required amount is not permitted, citing Zahn v. International Paper Company, 414 U.S. 291, 94 S.Ct. 505, 38 L.Ed.2d 511 (1973). However, Zahn does not apply, as it stands for the proposition that each plaintiff in a class action must individually meet the amount in controversy and aggregation of class members' claims is not permitted. This case is not a class action; rather, plaintiffs are insurers who seek a declaration of their own right to subrogate future liability. If that future liability is potentially greater than $50,000, jurisdiction is present.

The parties have shown that...