32 Ucc Rep - Serv.2d 1101, Prod - Liab.rep. (CCH) P 14,986 John M. Martin, Sr. v. American Medical Systems, Incorporated, 116 F.3d 102, 4th Cir. (1997)

116 F.
3d 102
32 UCC Rep.Serv.2d 1101, Prod.Liab.Rep. (CCH) P 14,986

John M. MARTIN, Sr., Plaintiff-Appellant,
v.
AMERICAN MEDICAL SYSTEMS, INCORPORATED,
Defendant-Appellee.
No. 96-1627.
United States Court of Appeals,

Fourth Circuit.
Argued April 9, 1997.
Decided June 19, 1997.
ARGUED: David Michael Deutsch, David M. Deutsch, Co., L.P.A.,

Dayton, Ohio, for Appellant. Barbara Ann Williams, Wright, Robinson,
Osthimer & Tatum, Richmond, Virginia, for Appellee. ON BRIEF: Mark
D. Brynteson, David & Brynteson, P.C., Chesapeake, Virginia, for
Appellant.
Before HALL and MURNAGHAN, Circuit Judges, and BUTZNER,
Senior Circuit Judge.
Vacated and remanded by published opinion. Judge K.K. HALL wrote the
opinion, in which Judge MURNAGHAN and Senior Judge BUTZNER
joined.
OPINION
K.K. HALL, Circuit Judge:
John M. Martin appeals a summary judgment entered for defendant American

Medical Systems in Martin's personal injury suit. In light of a recent controlling
decision of the Supreme Court, we vacate the judgment and remand.
I.
2
Martin suffers from erectile dysfunction. He consulted a urologist about his
problem, and the urologist recommended that he use an inflatable penile

prosthesis. He gave Martin some literature and a videotape about defendant
American Medical Systems' prostheses. After reviewing these materials, Martin
chose to use defendant's "Dynaflex" product.
On June 2, 1993, the Dynaflex was surgically implanted. Soon thereafter,

Martin developed a severe infection. On June 25, his urologist prescribed
intravenous antibiotics, but to no avail. Martin then underwent a second surgery
to remove the Dynaflex.
The infection raged on, however. He was again treated with intravenous
antibiotics in August. From November 29, 1993, through May 13, 1994, he was
hospitalized five times for surgery, including debridement of dead tissue, skin
grafts, removal of a cyst and an abscess, and subtotal phallic reconstruction. His
penis is now disfigured and shortened.
Martin filed this personal injury suit in state court in Chesapeake, Virginia. He
alleged several tort and warranty theories against American Medical Systems,
the gravamen of all of which was that the defendant failed to ensure that the
Dynaflex would be sterile and hence safe for implantation in the human body.
The defendant removed the case to district court based on diversity of
citizenship.
After limited discovery, American Medical Systems moved for summary

judgment. It argued that Martin's claims were preempted by the Medical Device
Amendments of 1976, 21 U.S.C. 360. The district court held that all claims
were preempted except breach of express warranty. On that claim, it held that
Martin could not show that he relied on the express "Limited Warranty"
American Medical made to his urologist.1 To the extent that Virginia law
precluded manufacturers from limiting warranties to those in privity of contract,
the district court held that it, too, would be preempted. Summary judgment was
entered for the defendant.
Martin appeals.
II.
8
Martin first attacks the district court's holding that his tort and implied warranty
claims are preempted. This issue dominates Martin's brief, but, in its response,
American Medical Systems concedes that under the Supreme Court's decision
in Medtronic, Inc. v. Lohr, 518 U.S. 470, 116 S.Ct. 2240, 135 L.Ed.2d 700
(1996), Martin is right: the Medical Device Amendments of 1976 do not

preempt his common-law claims.
9
For context's sake, we will briefly describe what this issue was all about.
Before 1976, the Food and Drug Administration (FDA)'s rigorous premarketing
approval did not extend to medical devices. The Dalkon Shield disaster, among
others, prompted Congress to change that. Today, the maker of a new "Class
III" device--the most potentially dangerous--must apply for FDA approval and
must cool its heels while the FDA thoroughly investigates the device's
effectiveness. 21 U.S.C. 360e(d)(2). The Dynaflex is a Class III device.
10
Because the 1976 amendments so abruptly changed the status quo, Congress
was compelled to take the existing market into account. Any device on the
market at the time was permitted to stay on the market until and unless the
FDA, after conducting a review like that for new devices, ordered otherwise. 21
U.S.C. 360e(b)(1)(A).
11
This grandfather clause took care of assuring the continued availability of

necessary equipment; on the other hand, it locked up market power in the
current manufacturers, and it posed a risk that, if the manufacturer of some
device went out of business, a much-needed product might be unavailable
during the time it would take a new manufacturer to go through the FDA
premarket approval process. Accordingly, Congress also exempted from
premarket approval "substantially equivalent devices" to those on the market in
1976. 21 U.S.C. 360e(b)(1)(B). Under this exemption, a manufacturer need
only notify the FDA of its intent to market a device. If the FDA concludes that
the device is "substantially equivalent," it notifies the manufacturer, which is
then free to market its product. This limited FDA review is called "510(k)" after
its section number in the original act.2 The Dynaflex reached the market in this
way.
12
In assuming federal responsibility for the safety of medical devices, Congress

expressly preempted the power of the states:
13
Except
[where the FDA has exempted a particular state requirement], 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-14 which is different from, or in addition to, any requirement applicable under this
(1)
chapter to the device, and
(2) which relates to the safety or effectiveness of the device or to any other matter
15
included in a requirement applicable to the device under this chapter.

16
21 U.S.C. 360k(a). Manufacturers of medical devices have argued that

requirements imposed by state tort law are among the things preempted. This
court, in Duvall v. Bristol-Myers-Squibb Co., 65 F.3d 392 (4th Cir.1995),
agreed. The district court relied on Duvall in granting the summary judgment
here.
17
Subsequently, the Supreme Court decided Medtronic. In that case, the Court
held that, as regards 510(k) devices, state-law claims are not preempted. The
Court reasoned that the 510(k) process does not constitute FDA approval of the
safety or effectiveness of the device, but was rather merely the preservation of
the pre-1976 status quo, which included potential liability under state law.3
18
Thus, an intervening decision of the Supreme Court requires that we set aside
the summary judgment on all of Martin's claims except the one for breach of
express warranty. On the latter claim, to which we now turn, the summary
judgment did not rest solely on Duvall, and American Medical Systems
contends that it can be affirmed notwithstanding Medtronic.
III.
19
Under Duvall, some warranty claims could be brought against the manufacturer
of a 510(k) device. Because the Medical Device preemption provision relates to
state laws that add safety and quality requirements in excess of FDA premarket
approval, we reasoned that a manufacturer could voluntarily make claims about
its product and thereby incur contractual liability; an obligation freely assumed
by contract is not one required by general state law.
20
Here, the district court correctly held that Martin's warranty claim was not
preempted per se. However, the court held that summary judgment for the
defendant was appropriate, because (1) Martin was unaware of the Limited
Warranty when he got the implant, and (2) language in the Limited Warranty
restricting it to the direct purchaser and disclaiming liability for consequential
damages was effective, notwithstanding contrary Virginia law. On this second
point, the court reasoned that any warranty coverage for Martin would be on
account of state law, not American Medical Systems' voluntary undertaking,
and so the state law was preempted.
21
Medtronic overturned this analysis; Martin is entitled to rely on state law

concerning the scope and validity of the defendant's warranty. Va.Code 8.2-
318 states:
22 of privity between plaintiff and defendant shall be no defense in any action
Lack
brought against the manufacturer or seller of goods to recover damages for breach of
warranty, express or implied, or for negligence, although the plaintiff did not
purchase the goods from the defendant, if the plaintiff was a person whom the
manufacturer or seller might reasonably have expected to use, consume, or be
affected by the goods[.]
23
Obviously, American Medical Systems knows that the direct purchaser of its
Dynaflex prosthesis--a surgeon or hospital--is not the ultimate user. It therefore
cannot rely on language in its "Limited Warranty" restricting coverage to the
direct purchaser.
24
Likewise, Virginia law prohibits the exclusion of consequential damages where

such an exclusion is unconscionable. Va.Code 8.2-719(3). The statute
explicitly provides that such an exclusion for "injury to the person in the case of
consumer goods is prima facie unconscionable." There is nothing in the current
record to rebut the prima facie unconscionability of this exclusion.
25
Having concluded that Virginia law applies and would extend any express
warranty to Martin, we turn to whether an express warranty was even made.
The district court pointed out that Martin did not know of the express warranty
that the prosthesis was sterile until this litigation began; therefore, he could not
have relied upon it.
26
Clear Virginia authority is to the contrary. Any description of the goods, other
than the seller's mere opinion about the product, constitutes part of the basis of
the bargain and is therefore an express warranty. It is unnecessary that the
buyer actually rely upon it. Daughtrey v. Ashe, 243 Va. 73, 413 S.E.2d 336
(1992). In Daughtrey, a jeweler had described a gem as being of higher quality
than it actually was. In a subsequent breach of warranty suit, the jeweler
asserted that the buyer had not been aware of the description and had not relied
upon it. The Virginia Supreme Court held that it did not matter. The express
warranty inquiry focuses on what it is that the seller agreed to sell, and, absent
clear proof that the parties did not intend their bargain to include the seller's
description of the goods, that description is an express warranty. 413 S.E.2d at
338-339.
27
The facts of this case militate even more strongly in favor of an express
warranty than in Daughtrey. In both cases, the seller described the goods, but
the buyer was unaware of the description. Here, though, unlike in Daughtrey,
Martin surely did rely on and expect the fact warranted to be true: i.e. the
implant was sterile. Martin may assert a claim for breach of express warranty.
28
The judgment of the district court is vacated, and the case is remanded for
further proceedings consistent with this opinion.
29
VACATED AND REMANDED.
The relevant warranty is "The AMS Dynaflex Penile Prosthesis ... [is] delivered
to the hospital prefilled and sterile."
"510(k)" is codified at 21 U.S.C. 360(k)
The Court later vacated Duvall v. Bristol-Myers Squibb Co., --- U.S. ----, 116
S.Ct. 2575, 135 L.Ed.2d 1090 (1996), and remanded it for our reconsideration.
For our decision on remand, see Duvall v. Bristol-Myers-Squibb Co., 103 F.3d
324 (4th Cir.1996)

32 Ucc Rep - Serv.2d 1101, Prod - Liab.rep. (CCH) P 14,986 John M. Martin, Sr. v. American Medical Systems, Incorporated, 116 F.3d 102, 4th Cir. (1997)

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32 Ucc Rep - Serv.2d 1101, Prod - Liab.rep. (CCH) P 14,986 John M. Martin, Sr. v. American Medical Systems, Incorporated, 116 F.3d 102, 4th Cir. (1997)

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116 F.

32 UCC Rep.Serv.2d 1101, Prod.Liab.Rep. (CCH) P 14,986

United States Court of Appeals,

ARGUED: David Michael Deutsch, David M. Deutsch, Co., L.P.A.,

John M. Martin appeals a summary judgment entered for defendant American

Martin suffers from erectile dysfunction. He consulted a urologist about his

problem, and the urologist recommended that he use an inflatable penile

On June 2, 1993, the Dynaflex was surgically implanted. Soon thereafter,

After limited discovery, American Medical Systems moved for summary

(1996), Martin is right: the Medical Device Amendments of 1976 do not

This grandfather clause took care of assuring the continued availability of

In assuming federal responsibility for the safety of medical devices, Congress

included in a requirement applicable to the device under this chapter.

21 U.S.C. 360k(a). Manufacturers of medical devices have argued that

Medtronic overturned this analysis; Martin is entitled to rely on state law

Likewise, Virginia law prohibits the exclusion of consequential damages where

VACATED AND REMANDED.

"510(k)" is codified at 21 U.S.C. 360(k)

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