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Supreme Court May Resolve Liability Preemption Dilemma

Medical Device & Diagnostic Industry
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Originally published March 1996

Product Liability

The most important court case in the recent history of the medical device industry is scheduled to begin this spring. "There are a lot of medical device manufacturers, particularly small ones, that are in danger of being driven into bankruptcy by the ballooning number of lawsuits against device manufacturers," says Richard Samp, chief counsel for the Washington Legal Foundation (WLF; Washington, DC). "Many of them look upon this case as their only hope for salvation."

The case is Medtronic, Inc. v. Lohr, which is set to be argued before the U.S. Supreme Court in April. For the individuals involved, the case involves simply the recovery of damages for an allegedly defective pacemaker. But for the medical device industry, there is much more at stake, namely the protection--or lack of it--afforded by the preemption provision written into the Medical Device Amendments of 1976.

In recent tort cases pursued in state courts, medical device companies have tried to use the amendments as a shield from liability, contending that successfully navigating either the premarket notification (510(k)) or premarket approval (PMA) process means they have met rigorous safety standards established by FDA--standards that preempt any that the individual states may set as part of tort law. But that argument has met with varied and limited success.

"It has been widely held that some of FDA's labeling regulations and good manufacturing practices (GMP) regulations may preempt failure-to-warn claims and claims regarding failure to manufacture properly," says Donald R. Stone, a partner in the food and drug department of McKenna & Cuneo (Washington, DC), the law firm retained by Medtronic. "But fewer courts have held that design claims are preempted."

This variability extends to opinions rendered in several appeals courts. Stone cites four design-related cases involving 510(k)-cleared devices. Two of the cases were decided in favor of the medical device companies, two against. "That is the kind of issue that interests the Supreme Court, when the lower courts are clearly not of the same mind and the high court needs to straighten out the conflict," Stone says.

The case being heard by the Supreme Court this spring could do just that. The opportunity is to establish a precedent of uniformity by which the Medical Device Amendments can be interpreted. The upcoming legal battle, which could set the tone for innovation well into the next century, is being driven by a specific action brought in a specific state, Florida, where plaintiff Lora Lohr has charged Medtronic with negligent design, negligent manufacture, and failure to warn, and has issued liability claims against the company for an allegedly defective pacemaker. "Our position is that the preemption provision should operate to prohibit three of those actions--defective design, manufacture, and failure to warn," Stone says.

The case stems from the implantation in 1987 of a Medtronic pacemaker in Lohr. The pacemaker, which had been cleared for sale by FDA in 1982, allegedly malfunctioned some three years later due to a defect in the lead that carried electrical impulses from the device to the heart. Emergency surgery was necessary to replace the device.

Medtronic won the initial round, when a federal judge dismissed the lawsuit on the grounds that Florida courts had no jurisdiction over the issue because of the 1976 law that governed FDA's regulation of medical devices. The company lost ground in the U.S. appeals court, however, which found that Lohr could pursue her case on two counts--negligent design and liability claims arising from an unreasonably dangerous design. Two other counts, negligent manufacture and failure to warn, were disallowed. The decision made neither side happy and both appealed.

On January 19, the Supreme Court decided to hear the case. The high court will actually rule on two motions: the appeal by Medtronic that neither claim allowed by the appeals court is permissible in the context of the Medical Device Amendments; and the appeal by Lohr that federal law does not preempt liability claims made under state law to recover damages due to injury as the result of a defective medical device. "So the issue before the Court is whether the preemption provision in the Medical Device Amendments was intended to preempt state tort claims regarding product warranty liability," Stone says.

But there is also the possibility that this case will not yield as uniform a precedent as industry would like. Medtronic, Inc. v. Lohr specifically raises the question of whether clearance of a medical device through FDA's 510(k) process insulates the manufacturer from product liability suits. Whether the decision will be extended to cover devices approved through the PMA process is not certain. "Generally, the courts have supported the broadest preemption for those devices that underwent PMA review, and there have been lesser degrees of protection afforded to those devices that were 510(k) cleared," Stone says. But the decision rendered in this case might be tightly applied only to devices that have been cleared through the 510(k) process, since that's how the pacemaker that spurred the action was cleared.

It is also possible that the high court will find totally in favor of the plaintiff. That outcome would seem unlikely, in that 9 of the 10 circuit appeals courts that have ruled on the issue of medical device liability have come out in favor of some type of preemption. But there is a wild card in this game, and that wild card is FDA.

In connection with recent preemption decisions, the agency has offered an opinion only once, in a federal appeals case involving C. R. Bard that took place in Boston about a year ago. In that case, the agency opined that there should be no preemption. WLF's Samp points out that the case was unusual because there was strong evidence of criminal activity by the device company. But it also indicates, he says, that "when the federal government is asked for its position on preemption, it files in support of the plaintiff."

In Medtronic, Inc. v. Lohr, Samp expects that the Supreme Court will ask the United States government, in this case FDA, to provide an opinion--and he expects that opinion to favor the plaintiff. If that happens, he says, it could have serious consequences for the medical device industry. "Generally, what government agencies have to say gets a fair amount of deference from the Supreme Court," says Samp. "If FDA comes out strongly against preemption, it would be supporting not only FDA regulation, but al-so whatever regulation the states want to impose."

These and other uncertainties may be cleared up in short order. Unlike lower court trials, cases brought before the U.S. Supreme Court do not involve witnesses or the presentation of evidence directly related to the claims involved in the case. Rather, court presentations focus entirely on legal arguments in support of or against opposing motions. As a result, cases are often presented expeditiously and decisions rendered quickly. In the Medtronic case, briefs are scheduled to be filed in March and oral arguments are set to follow in April. "We would expect the Court to decide the case before it adjourns for the summer at the beginning of July," Stone says.

Even so, the Supreme Court's decision may be only the beginning for Medtronic and plaintiff Lohr, since it will determine only whether a suit can be brought in the Florida courts. If Medtronic does not win total victory, it will soon find itself back in the lower courts and on the defensive again. --Greg Freiherr

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