Stengel v. Medtronic Inc.

• Decision Date: 10 January 2013
• Docket Number: No. 10–17755.,10–17755.
• Parties: Richard STENGEL; Mary Lou Stengel, Plaintiffs–Appellants, v. MEDTRONIC INCORPORATED, a foreign corporation, Defendant–Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

704 F.3d 1224

Richard STENGEL; Mary Lou Stengel, Plaintiffs–Appellants,

v.MEDTRONIC INCORPORATED, a foreign corporation, Defendant–Appellee.

No. 10–17755.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Sept. 19, 2012.

Filed Jan. 10, 2013.

Thomas G. Cotter, Haralson Miller Pitt Feldman & McAnally, PLC, Tucson, AZ, for Appellants.

Michael Kevin Brown, Lisa Marie Baird, Reed Smith, LLP, Los Angeles, CA; Timothy James Casey, Schmitt, Schneck, Smyth & Herrod PC, Phoenix, AZ, for Appellee.

Elizabeth Jean Erwin, Office of the Washington Attorney General, Seattle, WA; Steve Bullock, Office of the Montana Attorney General, Helena, MT; Lawrence Garth Wasden, Office of the Idaho Attorney General, Boise, ID, Mary–Christine Sungaila, Snell & Wilmer LLP, Costa Mesa, CA; Kelly Harrison Dove, Snell & Wilmer LLP, Las Vegas, NV; Jessice E. Yates, Snell & Wilmer LLP, Denver, CO; Mary Massaron Ross, Plunkett Cooney, Bloomfield Hills, MI; Alan Jay Lazarus and Sally F. White, Drinker Biddle & Reath, LLP, San Francisco, CA; Hugh F. Young, Jr., Product Liability Advisory Council, Inc., VA, for amici curiae.

Appeal from the United States District Court for the District of Arizona, Raner C. Collins, District Judge, Presiding. D.C. No. 4:10–cv–00318–RCC.

Before: ALEX KOZINSKI, Chief Judge; SIDNEY R. THOMAS, BARRY G. SILVERMAN, SUSAN P. GRABER, M. MARGARET McKEOWN, WILLIAM A. FLETCHER, RONALD M. GOULD, JOHNNIE B. RAWLINSON, RICHARD R. CLIFTON, N. RANDY SMITH, and PAUL J. WATFORD, Circuit Judges.

Opinion by Judge W. FLETCHER; Concurrence by Judge WATFORD.

OPINION

W. FLETCHER, Circuit Judge:

Plaintiffs Richard and Mary Lou Stengel sued Medtronic under state law when a medical device manufactured by Medtronic rendered Richard permanently paraplegic. Medtronic moved to dismiss the Stengels' complaint, contending that the Medical Device Amendments (“MDA”) to the Food, Drug, and Cosmetic Act (“FDCA”) preempted their state-law claims. The Stengels moved to amend their complaint to add a new state-law negligence claim. That claim alleged that Medtronic had violated a state-law duty of care by failing to report known risks associated with use of its medical device to the Food and Drug Administration (“FDA”). The MDA required Medtronic to report those risks to the FDA. Medtronic contended that the MDA also preempted the Stengels' new negligence claim.

The district court held that the MDA preempted all of the Stengels' claims, including the new negligence claim. Stengel v. Medtronic, Inc., No. CV 10–318–TUC–RCC, 2010 WL 4483970, at *3–4 (D.Ariz. Nov. 9, 2010). It denied the Stengels' motion to amend the complaint and dismissed their suit under Federal Rule of Civil Procedure 12(b)(6). Id. The Stengels appealed the denial of their motion to amend, as well as denial of an evidentiary ruling. A panel of this court affirmed over a dissent. 676 F.3d 1159 (9th Cir.2012). We granted rehearing en banc. 686 F.3d 1121 (9th Cir.2012).

The central question in this appeal is whether the MDA preempts a state-law claim in which the state-law duty of care “parallels” a federal-law duty imposed by the MDA. We conclude that such a state-law claim is not preempted and reverse the district court.

I. Background

Congress enacted the MDA to extend the coverage of the Food, Drug, and Cosmetic Act (“FDCA”) to medical devices. See Riegel v. Medtronic, Inc., 552 U.S. 312, 315, 128 S.Ct. 999, 169 L.Ed.2d 892 (2008). The MDA divides medical devices into three classes according to user risk. Class I devices pose the least risk; Class III devices pose the most. See id. at 316–17, 128 S.Ct. 999;see also21 U.S.C. § 360c(a)(1). Class I devices are subject to “general controls” such as labeling requirements. Id. § 360c(a)(1)(A); Riegel, 552 U.S. at 316, 128 S.Ct. 999. Class II devices are subject not only to “general controls,” but also to “special controls” such as “performance standards, postmarket surveillance, [and] patient registries.” 21 U.S.C. § 360c(a)(1)(B); Riegel, 552 U.S. at 316–17, 128 S.Ct. 999. If a device cannot be determined to provide a reasonable assurance of safety and effectiveness under Class I or II controls and is either marketed as a life-supporting device or may cause an unreasonable risk of illness or injury, it is a Class III device. A Class III device is subject to a pre-market approval process of the FDA. 21 U.S.C. § 360c(a)(1)(C); Riegel, 552 U.S. at 317, 128 S.Ct. 999. The Medtronic pain pump and catheter that caused Richard Stengel's injury was a Class III device.

The FDA's pre-market approval process of a Class III device is “rigorous.” Riegel, 552 U.S. at 317, 128 S.Ct. 999. The FDA performs a risk-benefit assessment of the device and determines the adequacy of the manufacturer's proposed label. Id. at 318, 128 S.Ct. 999. The FDA then denies, approves, or approves with conditions on distribution, marketing, or sale. See21 U.S.C. § 360e(d); 21 C.F.R. § 814.82; see also Riegel, 552 U.S. at 318–19, 128 S.Ct. 999. Once the FDA approves a device, the manufacturer is required to report any information that reasonably suggests that the device (1) “[m]ay have caused or contributed to a death or serious injury” or (2) “[h]as malfunctioned” and that any recurring malfunction “would be likely to cause or contribute to a death or serious injury.” 21 C.F.R. § 803.50(a); see21 U.S.C. § 360i(a); see also Riegel, 552 U.S. at 319, 128 S.Ct. 999.

For purposes of this appeal, we assume that all allegations in the Stengels' proposed amended complaint are true. Medtronic obtained pre-market approval of its SynchroMed Pump & Infusion System in 1988. Medtronic obtained supplemental pre-market approval for its SynchroMed EL Pump and Catheter in 1999.

On October 10, 2000, Richard Stengel had a SynchroMed EL Pump and Catheter surgically implanted in his abdomen to deliver pain relief medication directly into his spine. In February 2005, Stengel collapsed at home. At the hospital, he reported feeling heaviness and decreased sensation in his right leg. He was diagnosed with ascending paralysis in his lower body. A neurosurgeon removed the catheter, but Stengel was left permanently paraplegic. Medtronic's medical device caused the paralysis.

When it received FDA approval of its SynchroMed EL Pump and Catheter, Medtronic was not aware of certain risks associated with the device. Before Stengel was paralyzed, however, Medtronic had become well aware of those risks but had failed to inform the FDA, even though the MDA required Medtronic to do so. The FDA discovered the risks, and discovered that Medtronic already knew about them, when it inspected a Medtronic facility in late 2006 and early 2007. The FDA sent a Warning Letter to Medtronic in July 2007, stating that Medtronic had “misbranded” its Class III device by concealing known risks, in violation of 21 C.F.R. §§ 803.50(a)(1), 806.10(a)(1). In response to the FDA's Warning Letter, Medtronic sent a Medical Device Correction letter to doctors in January 2008. Medtronic recalled the device in March 2008. This advice and recall came too late to help Richard Stengel, who had been paralyzed in 2005.

II. Standards of Review

We review de novo a district court's legal conclusions regarding the sufficiency of a complaint. Martinez v. Wells Fargo Home Mortg., Inc., 598 F.3d 549, 553 (9th Cir.2010). We ordinarily review for abuse of discretion a denial of a motion to amend a complaint. Alvarez v. Chevron Corp., 656 F.3d 925, 931 (9th Cir.2011). But here, where the district court denied the motion to amend because of its conclusion that the claim in the proposed complaint was preempted as a matter of law, we review de novo. We have appellate jurisdiction pursuant to 28 U.S.C. § 1291.

III. Discussion

There is a presumption against federal preemption of state laws that operate in traditional state domains. “In all preemption cases, and particularly those in which Congress has ‘legislated ... in a field which the States have traditionally occupied,’ we ‘start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.’ ” Medtronic, Inc. v. Lohr, 518 U.S. 470, 485, 116 S.Ct. 2240, 135 L.Ed.2d 700 (1996) (citations omitted) (omission in original). Parties seeking to invalidate a state law based on preemption “bear the considerable burden of overcoming ‘the starting presumption that Congress does not intend to supplant state law.’ ” De Buono v. NYSA–ILA Med. & Clinical Servs. Fund, 520 U.S. 806, 814, 117 S.Ct. 1747, 138 L.Ed.2d 21 (1997) (citation omitted). “[T]he historic police powers of the State include the regulation of health and safety.” Id. “Throughout our history the several States have exercised their police powers to protect the health and safety of their citizens. Because these are ‘primarily, and historically, ... matter[s] of local concern,’ the ‘States traditionally have had great latitude under their police powers to legislate as to the protection of the lives, limbs, health, comfort, and quiet of all persons.’ ” Lohr, 518 U.S. at 475, 116 S.Ct. 2240 (citations omitted) (omission and alteration in original).

The MDA contains an explicit preemption clause that provides as follows:

Except as provided in subsection (b) of this section, no State or political subdivision of a State may establish or continue in effect with respect to a device intended for human use any requirement—

(1) which is different from, or in addition to, any requirement applicable under this chapter to the device, and

(2) which relates to the safety or effectiveness of the device or to any other matter included in a requirement applicable to the device under this chapter.

21 U.S.C. § 360k(a). Subsection (b) is not relevant to this appeal.

An implementing regulation provides:

State or local requirements are preempted only when the Food and Drug Administration has established specific counterpart regulations or there...