Clifton et al v. I-Flow Corporation
Filing
47
MEMORANDUM Opinion and Order Written by the Honorable Gary Feinerman on 10/26/2011.Mailed notice.(jlj)
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
OSCAR N. CLIFTON and DARLENE N. CLIFTON,
Plaintiffs,
vs.
I-FLOW CORPORATION,
Defendant.
)
)
)
)
)
)
)
)
)
11 C 627
Judge Feinerman
MEMORANDUM OPINION AND ORDER
Plaintiffs Oscar N. Clifton and Darlene N. Clifton brought this diversity suit against
Defendant I-Flow Corporation, alleging that Oscar sustained injuries from a medical device
manufactured and marketed by I-Flow and that Darlene suffered loss of consortium as a result.
In response to I-Flow’s motion to dismiss portions of the initial complaint under Federal Rule of
Civil Procedure 12(b)(6), Plaintiffs filed an amended complaint. I-Flow now moves under Rule
12(b)(6) to dismiss the amended complaint’s negligent misrepresentation, fraud, and implied
warranty claims, as well as what the parties call a punitive damages “count.” Plaintiffs have
stood on the amended complaint and oppose the motion. I-Flow’s motion is granted as to the
implied warranty claim and otherwise is denied.
Background
The well-pleaded facts alleged in the complaint are assumed true on a Rule 12(b)(6)
motion. See Reger Dev., LLC v. Nat’l City Bank, 592 F.3d 759, 763 (7th Cir. 2010); United
States ex rel. Main v. Oakland City Univ., 426 F.3d 914, 916 (7th Cir. 2005). On March 5, 2004,
Dr. James Hill performed shoulder surgery on Oscar. To help Oscar manage post-operative
pain, Dr. Hill affixed an I-Flow ON-Q pain pump to Oscar’s shoulder, which delivered
-1-
anesthetic via a catheter directly into the glenohumeral (shoulder) joint. In August 2004, during
a second operation, abnormalities were discovered in the joint. The shoulder continued to
worsen, and in April 2009 a different physician found that Oscar had “degenerative changes of
the glenohumeral joint.” According to the amended complaint, the delivery of anesthetic
directly into Oscar’s shoulder joint caused a condition called “chondrolysis,” which is the nearly
complete loss of cartilage in the joint. Oscar has undergone shoulder joint replacement and will
require additional surgeries.
Pain pumps traditionally were used to deliver anesthetic to the muscle but not to the joint.
In the 1990s, I-Flow and other pain pump manufacturers sought approval from the Food and
Drug Administration (“FDA”) to indicate pain pumps for intra-articular use—meaning with the
catheter inserted directly into the joint—but the FDA rejected the applications due to insufficient
data. Despite the FDA’s decision, and despite knowing that intra-articular use was not safe, IFlow promoted its pain pumps as safe and appropriate for such use. Oscar and Dr. Hill relied
upon those false representations in deciding to use the pain pump inter-articularly after Oscar’s
March 2004 surgery.
Discussion
The amended complaint has eight counts: negligence, negligent misrepresentation, fraud,
strict product liability (design defect), strict product liability (failure to warn), breach of implied
warranty, punitive damages, and loss of consortium. I-Flow has moved to dismiss the negligent
misrepresentation, fraud, implied warranty, and punitive damages counts.
A.
Fraud
As a general rule, Federal Rule of Civil Procedure 9(b) requires a fraud plaintiff to allege
“the identity of the person who made the misrepresentation, the time, place and content of the
-2-
misrepresentation, and the method by which the misrepresentation was communicated to the
plaintiff.” Vicom, Inc. v. Harbridge Merchant Servs., Inc., 20 F.3d 771, 777 (7th Cir. 1994).
“This ordinarily requires describing the ‘who, what, when, where, and how’ of the fraud,
although the exact level of particularity that is required will necessarily differ based on the facts
of the case.” AnchorBank, FSB v. Hofer, 649 F.3d 610, 615 (7th Cir. 2011). Rule 9(b)
recognizes that “[m]alice, intent, knowledge, and other conditions of a person’s mind may be
alleged generally.” Fed. R. Civ. P. 9(b); see also Burks v. Raemisch, 555 F.3d 592, 594 (7th Cir.
2009). Moreover, “[i]n alleging the time period during which the misrepresentations and
omissions are alleged to have been made, the plaintiff may allege an approximate time frame.”
Hernandez v. Childers, 736 F. Supp. 903, 912 (N.D. Ill. 1990).
I-Flow contends that the amended complaint “fails to set forth the circumstances of IFlow’s alleged misrepresentations, their contents, or their speakers, and how Plaintiffs or
Plaintiff Oscar Clifton’s physician heard and relied upon them.” Doc. 23 at 2. The contention is
incorrect. The amended complaint identifies I-Flow as the speaker, which suffices where the
defendant is a corporation and the corporation itself is alleged to have made fraudulent
misrepresentations. See Talavera v. Metabolife Int’l, Inc., 2004 WL 2260628, at *2 (N.D. Ill.
Sept. 24, 2004); AAR Int’l Inc. v. Vacances Heliades S.A., 202 F. Supp. 2d 788, 799 (N.D. Ill.
2002) (citing cases). The amended complaint also identifies the content and timing of I-Flow’s
alleged misrepresentations, including: (1) a press release on September 2, 1998, falsely claiming
that I-Flow received FDA approval to market its pain pump for orthopedic surgery applications;
(2) a PowerPoint presentation sent to physicians in May 2001 stating that pain pumps were
particularly useful in shoulder and other joint surgery; (3) a PowerPoint presentation prepared in
November 2001 stating that the catheter may be inserted into the joint; and (4) a guide developed
-3-
in July 2002 specifying that the pain pump’s catheter may be used intra-articularly. Doc. 21 at
¶¶ 66, 74. Finally, the amended complaint alleges that Oscar and Dr. Hill justifiably relied on IFlow’s false representations in deciding to insert the catheter into Oscar’s joint space after his
March 2004 shoulder surgery. Id. at ¶ 72. The evidence may defeat these allegations—in
particular, the allegation that Dr. Hill and Oscar were aware of and relied upon I-Flow’s alleged
misrepresentations—but at the pleading stage they are sufficient under Rules 9(b) and 12(b)(6).
I-Flow also contends that the fraud claim actually is a “fraud-on-the-FDA” claim and
therefore is preempted by the Federal Food, Drug, and Cosmetic Act (“FDCA”) under Buckman
Co. v. Plaintiffs’ Legal Committee, 531 U.S. 341 (2000). Doc. 23 at 4-8. In Buckman, the
Supreme Court held that the FDCA preempts state law claims alleging that the defendant made
fraudulent representations to the FDA to obtain approval for a drug or medical device and that,
had the defendant not made those misrepresentations, the FDA would not have approved the
drug or device and the plaintiff would not have been injured. 531 U.S. at 343-45. The amended
complaint makes no such claim—to the contrary, it alleges that the FDA declined to approve IFlow’s pain pumps for intra-articular use and that I-Flow, despite the FDA’s (correct) decision,
marketed its pain pumps for that use anyway. Because Plaintiffs allege not that I-Flow tricked
the FDA into approving pain pumps for a use that would have been rejected had I-Flow told the
truth, but rather that I-Flow made misrepresentations to the medical community and the public at
large, Buckman does not apply. See Lafaivre v. KV Pharm. Co., 636 F.3d 935, 944 (8th Cir.
2011) (rejecting Buckman preemption and explaining that “[t]he misrepresentation at issue in
Buckman was not made to the plaintiff—or consumers at large—but to the FDA itself”) (internal
quotation marks omitted); Hughes v. Bos. Scientific Corp., 631 F.3d 762, 775 (5th Cir. 2011)
(rejecting Buckman preemption where the plaintiff’s “claim does not depend on speculation that
-4-
the FDA would have taken any particular regulatory action in response to violation of the
regulations at issue”); Gaeta v. Perrigo Pharm. Co., 630 F.3d 1225, 1234 (9th Cir. 2011)
(rejecting Buckman preemption where “[t]he question before us is not whether [the defendant]
provided inaccurate or incomplete information to the FDA, but rather whether it complied with
its post-marketing obligations to warn consumers and health care professionals about additional
risks associated with its product”); Smith v. I-Flow Corp., 753 F. Supp. 2d 744, 750 n.1 (N.D. Ill.
2010).
B.
Negligent Misrepresentation
I-Flow seeks dismissal of the negligent misrepresentation claim on the ground that it does
not satisfy Rule 9(b). Doc. 23 at 1-4. The contention is meritless, as “a negligent
misrepresentation claim … is not governed by the heightened pleading standard of Rule 9(b).”
Tricontinental Indus., Ltd. v. PricewaterhouseCoopers, LLP, 475 F.3d 824, 833 (7th Cir. 2007).
I-Flow does not argue that the negligent misrepresentation claim fails to satisfy the ordinary
pleading standards of Rule 8(a)(2), so any such argument is forfeited. The argument would have
been rejected in any event; because the fraud claim satisfies Rule 9(b), the negligent
misrepresentation claim—which is based on the same alleged misrepresentations as the fraud
claim—surely satisfies the less stringent pleading requirements of Rule 8(a)(2). See Proctor v.
Metro. Money Store Corp., 645 F. Supp. 2d 464, 476 n.3 (D. Md. 2009) (“A fortiori, because
Plaintiffs meet the heightened burden under Rule 9(b), they have undoubtedly met the lower
threshold of ‘notice pleading’ under Rule 8(a)(2).”).
C.
Implied Warranty
I-Flow contends that the implied warranty claim is barred by the four-year statute of
limitations established by 810 ILCS 5/2-725(1). Plaintiffs’ claim accrued in March 2004, when
-5-
the pain pump was affixed to Oscar’s shoulder. See 810 ILCS 5/2-725(2) (“A cause of action
accrues when the breach occurs, regardless of the aggrieved party’s lack of knowledge of the
breach. A breach of warranty occurs when tender of delivery is made ….”); Lipinski v. Martin J.
Kelly Oldsmobile, Inc., 759 N.E.2d 66, 75 (Ill. App. 2001) (“the cause of action for breach of an
implied warranty accrues when tender of delivery was made”). Barring some tolling or
extension of the statute of limitations, the limitations period expired in March 2008, and this suit
was not filed until January 28, 2011, nearly three years later. In an effort to avoid dismissal,
Plaintiffs invoke 735 ILCS 5/13-215, which extends the limitations period where the defendant
has fraudulently concealed the plaintiff’s cause of action. See generally Horbach v. Kaczmarek,
288 F.3d 969, 975-76 (7th Cir. 2002). This effort fails because the amended complaint does not
adequately plead fraudulent concealment.
To prove fraudulent concealment, a plaintiff “must show affirmative acts or
representations by defendants which were designed to prevent and, in fact, did prevent, plaintiff
from discovering his claim.” Gredell v. Wyeth Labs., Inc., 803 N.E.2d 541, 548 (Ill. App. 2004)
(emphasis added); see also Clay v. Kuhl, 727 N.E.2d 217, 223 (Ill. 2000) (“As a general matter,
one alleging fraudulent concealment must show affirmative acts by the fiduciary designed to
prevent the discovery of the action.”) (internal quotation marks omitted). Plaintiffs devote a
section of the amended complaint to fraudulent concealment. Doc. 21 at ¶¶ 43-46. There,
Plaintiffs allege that their claims were concealed by I-Flow’s fraudulent conduct, but they do not
allege, as they must, that I-Flow intended to prevent them from discovering their claims or “to
lull or induce” them “into delaying the filing” of their claims. Rajcan v. Donald Garvey &
Assocs., Ltd., 807 N.E.2d 725, 728 (Ill. App. 2004) (internal quotation marks omitted). Without
such an allegation, Plaintiffs cannot adequately plead fraudulent concealment, and without
-6-
fraudulent concealment, the implied warranty claim is barred by the statute of limitations.
Because this is a matter of pleading, the court will give Plaintiffs a chance to re-plead their
fraudulent concealment allegations, although they are reminded that any allegation that I-Flow
intended to prevent them from discovering their claims must comply with Rule 11(b)(3).
D.
Punitive Damages
The amended complaint sets forth a separate “count” for punitive damages. The Illinois
Supreme Court has explained, however, that “a prayer for punitive damages is not, itself, a cause
of action,” but rather is “a type of remedy.” Vincent v. Alden-Park Strathmoor, Inc., 948 N.E.2d
610, 615 (Ill. 2011); see also Obi v. Chase Home Fin., LLC, 2010 WL 4810609, at *6 (N.D. Ill.
Nov. 19, 2010 (“Under Illinois law, punitive damages are a type of relief, not an independent
cause of action.”). Thus, I-Flow’s Rule 12(b)(6) motion to dismiss the punitive damages “count”
is really a Rule 12(f) motion to strike Plaintiffs’ request for punitive damages. See Taylor v.
Wal-Mart Stores, Inc., 2010 WL 146003, at *2 (S.D. Ill. Jan. 12, 2010).
The parties dispute whether the law of California (I-Flow’s principal place of business)
or Illinois (where Oscar was injured) governs the availability of punitive damages. Illinois
choice-of-law rules guide this inquiry. See Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487
(1941); Malone v. Corr. Corp. of Am., 553 F.3d 540, 542 (7th Cir. 2009). The first step in the
analysis is determining whether there is an actual conflict between the two States’ laws. See
Townsend v. Sears, Roebuck & Co., 879 N.E.2d 893, 898 (Ill. 2007) (“A choice-of-law
determination is required only when a difference in law will make a difference in the
outcome.”); Barron v. Ford Motor Co. of Can., Ltd., 965 F.2d 195, 197 (7th Cir. 1992) (“before
entangling itself in messy issues of conflict of laws a court ought to satisfy itself that there
actually is a difference between the relevant laws of the different states”). The parties do not
-7-
address this issue, let alone demonstrate the presence of a conflict, so for purposes of this motion
to strike, the court will assume that Illinois law applies. See Jean v. Dugan, 20 F.3d 255, 260
(7th Cir. 1994) (“Where there is no disagreement among the contact states, the law of the forum
state applies.”); compare Smith, 753 F. Supp. 2d at 747 (conducting choice-of-law analysis
because California law, which the plaintiff favored, allows punitive damages in product liability
cases while Michigan law, which the defendant favored, does not).
Illinois law holds that a plaintiff seeking punitive damages must show that the
defendant’s “tortious conduct evince[d] a high degree of moral culpability” and that the conduct
was “committed with fraud, actual malice, deliberate violence or oppression, or [that] the
defendant act[ed] willfully, or with such gross negligence as to indicate a wanton disregard of
the rights of others.” Slovinski v. Elliot, 927 N.E.2d 1221, 1225 (Ill. 2010) (internal quotation
marks omitted); see also LM Ins. Corp. v. Spaulding Enters. Inc., 533 F.3d 542, 551 (7th Cir.
2008) (punitive damages “are permissible where a duty based on a relationship of trust is
violated, the fraud is gross, or malice or willfulness are shown”) (internal quotation marks
omitted); Roboserve, Inc. v. Kato Kagaku Co., Ltd., 78 F.3d 266, 275 (7th Cir. 1996) (“Illinois
courts do not favor punitive damages and insist that plaintiffs must establish not only simple
fraud but gross fraud, breach of trust, or other extraordinary or exceptional circumstances clearly
showing malice or willfulness.”) (internal quotation marks omitted). The amended complaint
alleges that I-Flow “misled both the medical community and the public at large, including
Plaintiffs herein, by making false representations about the safety of its products”; that I-Flow
“downplayed, understated and/or disregarded its knowledge of the serious and permanent side
effects associated with the use of its products despite available information demonstrating these
products were likely to cause serious side effects”; that I-Flow “actually and consciously
-8-
considered whether intra-articular use of its pumps would be safe,” yet “did not notify physicians
that the safety of [such] use … was unknown, had not been studied[,] and had not been tested by
I-Flow”; that “[a]t the time of manufacture or distribution of its pain pumps, I-Flow had actual
knowledge that its pain pumps were defective and that there was substantial likelihood that the
defect would cause injury that is the basis of this action,” but that it “willfully disregarded that
knowledge in the manufacture or distribution of its pain pumps”; and that I-Flow knew before its
1999 promotional campaign expressly marketing its pain pumps for intra-articular use that the
safety of such use had not been proven and was dubious. Doc. 21 at ¶¶ 28, 31, 37, 66, 71.
These allegations, which plausibly suggest that I-Flow acted willfully, with malice, and
with conscious disregard of the right of others in representing that its pain pumps were safe for
intra-articular use, are sufficient to plead an entitlement to punitive damages. See LM Ins. Corp,
533 F.3d at 551; Roboserve, 78 F.3d at 275; Azimi v. Ford Motor Co., 977 F. Supp. 847, 854-55
(N.D. Ill. 1996). Whether the evidence adduced in discovery or at trial will support these
allegations, of course, is a different matter entirely.
Conclusion
For the foregoing reasons, Plaintiffs’ implied warranty claim is dismissed without
prejudice. If Plaintiffs wish to replead their fraudulent concealment allegations, which as
explained above are essential to the vitality of their implied warranty claim, they are allowed
leave to do so by November 9, 2011. I-Flow’s motion to dismiss otherwise is denied.
October 26, 2011
United States District Judge
-9-
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?