ORDER DENYING DEFENDANTS’ MOTION TO DISMISS PLAINTIFF’S SECOND AMENDED COMPLAINT FOR DAMAGES FILED 10/6/14, DOC. NO. 69
J. Michael Seabright United States District Judge
On December 16, 2013, Plaintiff Karla Beavers-Gabriel (“Plaintiff”) filed this diversity action against Medtronic, Inc. and Medtronic Sofamor Danek USA, Inc. (collectively, “Medtronic” or “Defendants”), asserting state law claims based on injuries she sustained after undergoing spinal surgery in which her surgeon used Defendants’ Infuse® Bone Graft (the “Infuse Device”), a Class III prescription medical device, in an off-label manner not approved by the Food and Drug Administration (“FDA”).
On April 10, 2014, the court granted Defendants’ Motion to Dismiss the Complaint, with leave to amend as to certain claims (the “April 10, 2014 Order”). See Beavers-Gabriel v. Medtronic, Inc., 15 F.Supp. 3d 1021 (D. Haw. 2014). The April 10, 2014 Order determined that several of Plaintiff’s claims were preempted by the Medical Device Amendments (“MDA”) of the Food, Drug, and Cosmetic Act (“FDCA”), and that the remaining claims were insufficiently pled to allege a plausible claim for relief. Plaintiff ultimately filed a Second Amended Complaint (“SAC”) attempting to correct the deficiencies outlined in the April 10, 2014 Order.
Currently before the court is Defendants’ Motion to Dismiss the SAC pursuant to Rule 12(b)(6), Doc. No. 69, arguing that the new claims are still preempted by the MDA and/or include insufficient allegations to assert a plausible claim for relief. Based on the following, the court DENIES Defendants’ Motion.
A. Factual Background
The SAC includes 203 pages, 539 paragraphs, and ten exhibits, including one exhibit consisting of a 190-page deposition transcript. Much of the SAC rehashes what was alleged in the original Complaint containing 141 pages and 414 paragraphs, with the additional material directed to addressing deficiencies in the Complaint outlined by the April 10, 2014 Order.
Similar to the Complaint, the SAC includes various allegations regarding (1) the general regulatory landscape for medical devices, Doc. No. 62, SAC at 18-50; (2) Medtronic’s promotion of the Infuse Device for off-label purposes, id. at 51-100; and (3) Medtronic’s knowledge and/or notice that the Infuse Device was not safe for unapproved purposes. Id. at 101-146. Because the April 10, 2014 Order outlined these background facts in detail, the court does not detail them again here, and instead discusses Plaintiff’s specific allegations in more detail below as they relate to each claim.
Rather, suffice to say that the SAC alleges that (1) the FDA approved the Infuse Device to be used in anterior lumbar interbody fusion (“ALIF”) surgeries at L4-S1, using all components of the device (the two components being the Infuse Bone Graft Component and the LT-Cage); (2) Medtronic promoted the Infuse Device for off-label purposes while at the same time hiding known side effects; (3) Plaintiff underwent a transforaminal lumbar interbody fusion (“TLIF”) and posterolateral fusion at L5-S1 in which the Infuse Device was used in an off-label manner by using a transforaminal and posterolateral approach as well as by placing the active ingredient, rhBMP-2, both inside and outside of non-LT-Cages; (4) Plaintiff’s surgeon, Dr. Jon Graham, was induced to use the Infuse Device in an off-label manner by Medtronic’s false representations and omissions; and (5) Plaintiff developed heterotopic bone growth, secondary to the Infuse Device, causing her injury. With regard to Dr. Graham’s decision to use the Infuse Device in an off-label manner, the SAC attaches his deposition transcript, which was taken after Plaintiff filed this action. See Doc. No. 67, SAC Ex. 10.
B. Procedural History
On December 16, 2013, Plaintiff filed this action alleging eight causes of action titled (1) Fraudulent Misrepresentation and Fraud in the Inducement; (2) Strict Products Liability -- Failure to Warn; (3) Strict Products Liability -- Design Defect; (4) Strict Products Liability -- Misrepresentation; (5) Products Liability -- Negligence; (6) Breach of Express Warranty; (7) Breach of Hawaii’s Consumer Protection Statutes; and (8) Punitive Damages.
The parties subsequently stipulated to dismissal of the claim for Breach of Hawaii’s Consumer Protection Statutes, Doc. No. 21, and Plaintiff conceded to dismissal of the Strict Products Liability -- Misrepresentation claim. The April 10, 2014 Order dismissed the remaining claims as preempted by the MDA and/or insufficiently pled, with leave for Plaintiff to amend as to specific theories of relief as to Plaintiff’s claims for Fraudulent Misrepresentation and Fraud in the Inducement, Strict Products Liability -- Failure to Warn, Products Liability -- Negligence, and Breach of Warranty.
Plaintiff’s counsel subsequently took the deposition of Dr. Graham to obtain evidence in support of an amended complaint and in particular, to determine whether Plaintiff could establish the connection between Defendants’ alleged misrepresentations and omissions, and Dr. Graham’s decision to use the Infuse Device in an off-label manner for Plaintiff’s surgery. See Doc. No. 44. On September 2, 2014, Plaintiff filed her Amended Complaint, Doc. No. 50, which the court struck for failure to follow the April 10, 2014 Order -- Plaintiff had included claims and theories of relief that were dismissed without leave to amend. See Doc. No. 62.
On October 6, 2014, Plaintiff filed her SAC. Doc. No. 63. The SAC alleges claims titled (1) Fraudulent Misrepresentation and Fraud by Omission (Count I); (2) Negligent Misrepresentation (Count II); (3) Strict Products Liability -- Failure to Warn the FDA (Count III); (4) Negligent Failure-to-Warn the FDA (Count IV); and (5) Breach of Express Warranty (Count V). Plaintiff seeks general, consequential, and punitive damages, as well as attorneys’ fees and costs.
On October 20, 2014, Defendants filed their Motion to Dismiss the SAC. Doc. No. 69. Plaintiff filed her Opposition on November 17, 2014, Doc. No. 72, and Defendants filed a Reply on November 24, 2014. Doc. No. 75. A hearing was held on December 8, 2014.
After the December 8, 2014 hearing, the court directed the parties to submit supplemental briefing regarding the plausibility of the failure-to-warn claims, Doc. No. 77, and Plaintiff submitted her supplemental brief on December 16, 2014, Doc. No. 79, and Defendants submitted their supplemental reply on December 23, 2014. Doc. No. 82.
III. STANDARDS OF REVIEW
A. Rule 12(b)(6): Failure to State a Claim
Federal Rule of Civil Procedure 12(b)(6) permits a motion to dismiss a claim for “failure to state a claim upon which relief can be granted[.]”
“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)); see also Weber v. Dep’t of Veterans Affairs, 521 F.3d 1061, 1065 (9th Cir. 2008). This tenet -- that the court must accept as true all of the allegations contained in the complaint -- “is inapplicable to legal conclusions.” Iqbal, 556 U.S. at 678. Accordingly, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. (citing Twombly, 550 U.S. at 555); see also Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011) (“[A]llegations in a complaint or counterclaim may not simply recite the elements of a cause of action, but must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively.”).
Rather, “[a] claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). In other words, “the factual allegations that are taken as true must plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation.” Starr, 652 F.3d at 1216. Factual allegations that only permit the court to infer “the mere possibility of misconduct” do not show that the pleader is entitled to relief as required by Rule 8. Iqbal, 556 U.S. at 679.
B. Federal Rule of Civil Procedure 9(b)
Federal Rule of Civil Procedure 9(b) requires that “[i]n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity.” “Rule 9(b) requires particularized allegations of the circumstances constituting fraud.” In re GlenFed, Inc. Sec. Litig., 42 F.3d 1541, 1547 (9th Cir. 1994) (en banc), superseded on other grounds by 15 U.S.C. § 78u-4.
In their pleadings, Plaintiff must include the time, place, and nature of the alleged fraud; “mere conclusory allegations of fraud are insufficient” to satisfy this requirement. Id. at 1548 (citation and quotation signals omitted). However, “[m]alice, intent, knowledge, and other condition of a person’s mind may be alleged generally.” Fed.R.Civ.P. 9(b); see also In re GlenFed, Inc. Sec. Litig, 42 F.3d at 1547 (“We conclude that plaintiffs may aver scienter . . . simply by saying that scienter existed.”); Walling v. Beverly Enter., 476 F.2d 393, 397 (9th Cir. 1973) (Rule 9(b) “only requires the identification of the circumstances constituting fraud so that the defendant can prepare an adequate answer from the allegations.” (citations omitted)).
A motion to dismiss for failure to plead with particularity is the functional equivalent of a motion to dismiss under Rule 12(b)(6). Vess v. Ciba- Geigy Corp. USA, 317 F.3d 1097, 1107 (9th Cir. 2003). In considering a motion to dismiss, the court is not deciding the issue of “whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims.” Jackson v. Carey, 353 F.3d 750, 755 (9th Cir. 2003) (quoting Scheuer v. Rhodes, 416 U.S. 232, 236 (1974)).
Due to the sheer number of the allegations in the SAC -- 539 paragraphs in total -- both Defendants and this court are faced with the daunting task of determining the precise basis for each of Plaintiff’s claims and whether each claim alleges a plausible basis for relief. This task is further compounded by the facts that (1) the SAC includes a significant number of allegations that simply provide background information as opposed to a basis for a claim for relief, and (2) each claim incorporates by reference every paragraph alleged in the SAC without regard to which allegations actually make up the basis of each claim. To assist in wading through this sea of allegations, the court finds that the April 10, 2014 Order is a natural starting point to focus the parties’ arguments on the claims now alleged in the SAC -- the April 10, 2014 Order detailed the legal framework for express preemption and implied preemption, and applied this framework in determining what claims and theories of relief Plaintiff was permitted to amend. Further, in striking Plaintiff’s First Amended ...