Kinetic Co., Inc, The v. Medtronic, Inc

Filing 115

ORDER - Based on the foregoing, and on all of the files, records, and proceedings herein, IT IS HEREBY ORDERED THAT: Defendant's motion for judgment on the pleadings 91 is GRANTED IN PART and DENIED IN PART. Defendant's motion is GRANTED as to Counts I, II, III, IV, V, VI, VII and IX in plaintiff's amended complaint 57 with respect to all devices at issue except the Model 7285 device, and those claims are DISMISSED WITH PREJUDICE AND ON THE MERITS. Defendant's motion is DENIED in all other respects. (Written Opinion). Signed by Judge Patrick J. Schiltz on 04/19/11. (bjs)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
THE KINETIC CO., INC.,
on behalf of itself and others similarly
situated,

Case No. 08-CV-6062 (PJS/AJB)

Plaintiff,

ORDER

v.
MEDTRONIC, INC.,
Defendant.
Lauren Guth Barnes, Thomas M. Sobol, HAGENS BERMAN SOBOL SHAPIRO
LLP; Thomas I. Hara; Vernon J. Vander Weide, HEAD, SIEFERT & VANDER
WEIDE; Joseph H. Meltzer, Terence S. Ziegler, Casandra A. Murphy,
BARROWAY TOPAZ KESSLER MELTZER & CHECK, LLP, for plaintiff.
David M. Gossett, MAYER BROWN LLP; Michael T. Nilan, Andrew J. Sveen,
NILAN JOHNSON LEWIS PA; Stephen J. Immelt, Steven F. Barley, Lauren S.
Colton, HOGAN LOVELLS US LLP, for defendant.
Plaintiff The Kinetic Co., Inc. (“Kinetic”) brings this putative class action asserting
numerous state-law claims on behalf of itself and other similarly situated third-party payors of
health-care expenses against defendant Medtronic, Inc. (“Medtronic”). Medtronic moves for
judgment on the pleadings on the ground that Kinetic’s state-law claims are preempted by
federal law. For the reasons explained below, the Court largely agrees with Medtronic and
therefore dismisses Kinetic’s claims, with only a couple of exceptions.
I. BACKGROUND
Medtronic is a manufacturer of medical devices, including implantable cardiac
defibrillators (“ICDs”) and cardiac resynchronization therapy devices (“CRT-Ds”). Am. Compl.
¶ 6. ICDs and CRT-Ds are used to treat cardiovascular and peripheral disease, cardiac
arrhythmias, heart failure, and slow heartbeats. Id. ¶ 10. ICDs monitor, regulate, and stabilize

the heart in the event of sudden heart failure or a change in the heart’s rhythm. Id. ¶ 11. CRTDs supply mild electrical impulses to the lower chambers of the heart to treat heart-failure
symptoms and allow the heart to beat in a normal sequence. Id. ¶ 14.
In April 2004, the FDA announced a Class I recall of two models of Medtronic ICDs.1
Id. ¶ 19. In February 2005, Medtronic initiated a recall of four additional models of ICDs and
four models of CRT-Ds. Id. ¶¶ 22-23. All of these devices experienced a problem with their
batteries that could cause the devices to fail. Id. ¶ 25. Kinetic alleges that Medtronic knew of
this battery problem as early as January 2003, but failed to immediately advise the FDA or the
public about it. Id. ¶ 29. Instead, in fall 2003, Medtronic sought and received the FDA’s
permission to make a change in the batteries. Id. But Medtronic continued to sell its existing
stock of defective devices at least until February 2005.2 Id. ¶ 30.
Kinetic brings nine claims against Medtronic based on Medtronic’s sales of these
defective ICDs and CRT-Ds: (1) violation of Minnesota’s False Statement in Advertising statute,
Minn. Stat. § 325F.67; (2) violation of Minnesota’s Deceptive Trade Practices Act, Minn. Stat.
§ 325D.44; (3) violation of Minnesota’s Prevention of Consumer Fraud Act, Minn. Stat.
§ 325F.69; (4) unfair and deceptive trade practices under the laws of the other 49 states and the
District of Columbia; (5) unjust enrichment; (6) breach of express warranty; (7) breach of

1

A Class I recall is instituted when there exists a reasonable probability that use of the
product will cause serious injury or death. Am. Compl. ¶ 19.
2

Kinetic does not allege that Medtronic’s continued sale of these devices violated the
terms of the recalls. According to Medtronic, neither the Class I recall nor Medtronic’s later
recall (which Medtronic characterizes as nothing more than a voluntary letter to physicians
recommending certain patient-management options) required Medtronic to replace the devices or
withdraw them from the market.
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implied warranty; (8) breach of assumed contractual warranty obligations; and
(9) misrepresentation by omission.
II. ANALYSIS
A. Standard of Review
In reviewing a motion for judgment on the pleadings under Fed. R. Civ. P. 12(c), a court
applies the same standard used in reviewing a motion to dismiss for failure to state a claim under
Fed. R. Civ. P. 12(b)(6). Ashley Cnty. v. Pfizer, Inc., 552 F.3d 659, 665 (8th Cir. 2009). Under
this standard, the court must accept as true all of the factual allegations in the complaint and
draw all reasonable inferences in the plaintiff’s favor. Id. Although the factual allegations in the
complaint need not be detailed, they must be sufficient to “raise a right to relief above the
speculative level . . . .” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007).
B. Preemption
Medtronic moves for judgment on the pleadings on the ground that all of Kinetic’s claims
are preempted under the 1976 Medical Device Amendments (“MDA”), 21 U.S.C. §§ 360c et
seq., to the Food, Drug, and Cosmetic Act (“FDCA”), 21 U.S.C. §§ 301 et seq.3 The Eighth

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Medtronic previously litigated and lost the preemption issue in a related case. See In re
Medtronic, Inc. Implantable Defibrillators Litig., 465 F. Supp. 2d 886 (D. Minn. 2006). Kinetic
contends that, under the doctrine of offensive nonmutual collateral estoppel, Medtronic should
be precluded from relitigating the preemption issue in this case. The Court disagrees. There are
a host of reasons why offensive nonmutual collateral estoppel should not apply here, the most
important of which is that the decision of a judge of this Court in Implantable Defibrillators
predated both the Supreme Court’s decision in Riegel v. Medtronic, Inc., 552 U.S. 312 (2008),
and the Eighth Circuit’s decision in In re Medtronic, Inc., Sprint Fidelis Leads Products Liability
Litigation, 623 F.3d 1200 (8th Cir. 2010). Both of those decisions significantly changed and
clarified the law of preemption. Under these circumstances, giving preclusive effect to the
Implantable Defibrillators decision would be unjust. See Berger Transfer & Storage v. Cent.
States, Se. & Sw. Areas Pension Fund, 85 F.3d 1374, 1377 (8th Cir. 1996) (“If application of
(continued...)
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Circuit recently summarized the law regarding federal preemption of state-law claims concerning
Class III medical devices:4
In the Medical Device Amendments to the Federal Food,
Drug and Cosmetic Act (“MDA”), Congress authorized the Food
and Drug Administration (“FDA”) to regulate the safety and
effectiveness of medical devices. . . . Before a new Class III device
may be marketed, the manufacturer must assure the FDA through a
rigorous Pre-Market Approval (“PMA”) process that the device is
safe and effective. Once the product is approved, the manufacturer
may not change its design, manufacturing process, labeling, or
other attributes that would affect safety or effectiveness without
filing a PMA Supplement. 21 C.F.R. § 814.39(a). The PMA
Supplement is reviewed using the same standard as the original
PMA. See generally [Riegel v. Medtronic, Inc., 552 U.S. 312,
315-19 (2008)] . . . .
The MDA contains an express preemption provision: no
State “may establish or continue in effect with respect to a
device . . . 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.” 21 U.S.C. § 360k(a). In Riegel, the Court held that,
for § 360k(a) preemption purposes, (i) FDA pre-market approval is
“federal safety review” that results in federal “requirements”
specific to the approved device, and (ii) common law product
liability claims result in “state requirements” that are preempted to
the extent they relate to the safety and effectiveness of the device
and are “different from, or in addition to,” the federal requirements
established by PMA approval. 552 U.S. at 322-24, 128 S. Ct. 999.
However, the Court noted, § 360k “does not prevent a State from
providing a damages remedy for claims premised on a violation of

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(...continued)
offensive issue preclusion would be unfair to a defendant, a trial judge should not allow the use
of offensive issue preclusion.”).
4

A Class III device is “one that presents a potentially unreasonable risk of injuring
patients or that is used to sustain life.” In re Medtronic, Inc., Sprint Fidelis Leads Prods. Liab.
Litig., 623 F.3d 1200, 1203 (8th Cir. 2010); see 21 U.S.C. § 360c(a)(1)(C).
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FDA regulations; the state duties in such a case ‘parallel,’ rather
than add to, federal requirements.” Id. at 330, 128 S. Ct. 999.
The MDA also provides that all actions to enforce FDA
requirements “shall be by and in the name of the United States,” 21
U.S.C. § 337(a). In Buckman Co. v. Plaintiffs’ Legal Comm., 531
U.S. 341, 349 n.4, 121 S. Ct. 1012, 148 L. Ed. 2d 854 (2001), the
Court construed § 337(a) as barring suits by private litigants “for
noncompliance with the medical device provisions.” Read
together —
Riegel and Buckman create a narrow gap through
which a plaintiff’s state-law claim must fit if it is to
escape express or implied preemption. The plaintiff
must be suing for conduct that violates the FDCA
(or else his claim is expressly preempted by
§ 360k(a)), but the plaintiff must not be suing
because the conduct violates the FDCA (such a
claim would be impliedly preempted under
Buckman).
In re Medtronic, Inc., Sprint Fidelis Leads Prods. Liab. Litig., 623 F.3d 1200, 1203-04 (8th Cir.
2010) [hereinafter Sprint Fidelis] (footnotes omitted) (quoting Riley v. Cordis Corp., 625 F.
Supp. 2d 769, 777 (D. Minn. 2009).
With respect to all of the medical devices at issue in this case save one (the Model
72855), there is no dispute that they are Class III devices that were approved by the FDA
pursuant to the PMA process and that, as a result, the FDA has established federal requirements
applicable to these devices. Under the MDA, then, Kinetic’s claims are preempted to the extent

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Medtronic does not move for judgment on preemption grounds with respect to the
Model 7285, which Medtronic believes is a CRT-D that was never sold in the United States and
was thus not subject to FDA approval. See Docket No. 93 at 10 n.1. At oral argument, Kinetic
agreed that, if the Model 7285 was never sold in the United States and no members of the class
paid for a Model 7285, Kinetic would voluntarily dismiss its claims with respect to that device.
But Kinetic is not yet willing to concede that the Model 7285 was never sold in the United
States. For the time being, therefore, Kinetic’s claims survive insofar as they relate to the Model
7285.
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that they would impose requirements that relate to the safety or effectiveness of these devices
and that are either different from or in addition to the requirements imposed under the FDCA.
All but two of Kinetic’s claims are based on allegations that Medtronic failed to disclose
the defects in the devices and that Medtronic affirmatively misrepresented the safety and
effectiveness of the devices. At times in its complaint, Kinetic seems to focus on
misrepresentations and omissions allegedly made to doctors and patients. At other times,
Kinetic seems to focus on misrepresentations and omissions allegedly made to the FDA. Under
either theory, though, Kinetic’s claims are squarely preempted under § 360k, Riegel, and Sprint
Fidelis.
With respect to Medtronic’s communications to doctors and patients, Kinetic does not
claim that Medtronic failed to include FDA-approved warnings and disclosures with the devices.
Rather, Kinetic seeks to hold Medtronic liable for failing to include additional warnings —
specifically, a warning about the devices’ battery problems and resulting high risk of failure.
But Kinetic admits that there is no federal requirement that Medtronic disclose this information
to doctors or patients. Because there is no such requirement under the FDCA, Kinetic is seeking
to use state law to impose requirements on Medtronic that are “different from, or in addition to,”
the requirements imposed by the FDCA. 21 U.S.C. § 360k(a)(1); see Sprint Fidelis, 623 F.3d at
1205. Kinetic cannot do this under § 360k.
With respect to Medtronic’s communications to the FDA, Kinetic alleges that Medtronic
violated federal regulations that required Medtronic to disclose the battery problems to the FDA.
See, e.g., 21 C.F.R. § 803.50. But to avoid being impliedly preempted under Buckman, a claim
must “rely[] on traditional state tort law which had predated the federal enactments in

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question[].” Buckman Co., 531 U.S. at 353. “In other words, the conduct on which the claim is
premised must be the type of conduct that would traditionally give rise to liability under state
law — and that would give rise to liability under state law even if the FDCA had never been
enacted.” Riley v. Cordis Corp., 625 F. Supp. 2d 769, 777 (D. Minn. 2009). Obviously, a claim
premised on a defendant’s violation of an FDA regulation requiring that information be reported
to the FDA is not a claim “that would give rise to liability under state law even if the FDCA had
never been enacted.” Id. It is, instead, “simply an attempt by private parties to enforce the
MDA” — an attempt that is preempted under Buckman. See Sprint Fidelis, 623 F.3d at 1205-06.
Kinetic’s claims that Medtronic falsely represented and warranted the safety of the
devices are likewise preempted. The amended complaint relies entirely on general warranties
and representations by Medtronic that the devices were “safe,” Am. Compl. ¶¶ 31, 35, 45(l), 55,
59, 67, 93,109, “sound,” id. ¶¶ 36, 49, 55, 59, 107, “reliable,” id. ¶¶ 36, 49, 61, 107, 109,
“effective,” id. ¶¶ 67, 93, “non-defective,” id. ¶ 60, and “fit and proper for [their] intended use,”
id. ¶ 93. These allegations are materially indistinguishable from the allegations in Sprint Fidelis
that Medtronic had warranted and represented the Sprint Fidelis leads as “safe, effective, fit and
proper for their intended use.”6 Sprint Fidelis, 623 F.3d at 1207. The Eighth Circuit held that
claims based on such representations are preempted: “To succeed on the express warranty claim
asserted in this case, Plaintiffs must persuade a jury that Sprint Fidelis Leads were not safe and
effective, a finding that would be contrary to the FDA’s approval of the PMA Supplement.”

6

To be sure, Kinetic sometimes uses the adverb “mechanically” to modify these
adjectives. See, e.g., Am. Compl. ¶¶ 36, 55. But representations about the soundness and
reliability of mechanical devices necessarily include their mechanical qualities; adding the
qualifier “mechanically” does not change the nature of the representation.
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Sprint Fidelis, 623 F.3d at 1208. Similarly, to succeed on their consumer-protection, expresswarranty, and unjust-enrichment claims in this case, Kinetic would have to persuade a jury that
the devices were not “safe,” “sound,” “reliable,” “effective,” “non-defective,” and “fit and
proper for [their] intended use” — which is no different than persuading a jury that the devices
are not “safe and effective.” These claims are therefore preempted under Sprint Fidelis.
Kinetic suggests that it should be allowed to take discovery to determine whether
Medtronic made any warranties or representations beyond the general ones regarding safety and
effectiveness alleged in the amended complaint. Kinetic misunderstands the purpose of
discovery. A plaintiff is permitted to take discovery to find evidence to support a properly
pleaded claim for relief; a plaintiff is not permitted to take discovery to fish for claims of which
it is not aware. Because the misrepresentation, express-warranty, and unjust-enrichment claims
pleaded by Kinetic are clearly preempted (with the exception of the claims related to the Model
7285 device), Kinetic is not entitled to take discovery on those claims.
As noted, two of Kinetic’s claims are not based on Medtronic’s alleged
misrepresentations and omissions about the safety and effectiveness of the devices. Those
claims are for breach of implied warranty (Count VII) and “breach of assumed contractual
warranty obligations” (Count VIII).
Count VII alleges that, in breach of the implied warranty of merchantability, the devices
were unsafe and defective. As Kinetic more or less conceded at oral argument, this claim is
clearly preempted by § 360k. If a jury were to agree with Kinetic that the devices were unsafe
and defective, then state law would impose liability on Medtronic for selling devices that
Medtronic is authorized to sell under federal law — a result that would obviously impose state-

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law requirements “different from, or in addition to” the requirements imposed under the FDCA.
See In re Medtronic, Inc., Sprint Fidelis Leads Prods. Liab. Litig., 592 F. Supp. 2d 1147, 1164
(D. Minn. 2009) (rejecting implied-warranty claim), aff’d, 623 F.3d 1200 (8th Cir. 2010).
In Count VIII, Kinetic claims that Medtronic breached certain “assumed contractual
warranty obligations.” The amended complaint leaves unclear the exact basis of this claim. At
oral argument, however, Kinetic clarified that it is alleging that Medtronic promised patients in
whom the devices had been implanted that Medtronic would pay certain costs associated with
removing and replacing the devices. Kinetic apparently alleges that, by not making such
payments to third-party payors (such as Kinetic), Medtronic breached the promise that it made to
patients. At oral argument, Medtronic conceded that, as clarified by Kinetic, Count VIII has
nothing to do with the safety or effectiveness of the devices and thus is not preempted by § 360k.
The Court therefore denies Medtronic’s motion with respect to Count VIII.
ORDER
Based on the foregoing, and on all of the files, records, and proceedings herein, IT IS
HEREBY ORDERED THAT:
1.

Defendant’s motion for judgment on the pleadings [Docket No. 91] is GRANTED
IN PART and DENIED IN PART.

2.

Defendant’s motion is GRANTED as to Counts I, II, III, IV, V, VI, VII and IX in
plaintiff’s amended complaint [Docket No. 57] with respect to all devices at issue
except the Model 7285 device, and those claims are DISMISSED WITH
PREJUDICE AND ON THE MERITS.

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3.

Defendant’s motion is DENIED in all other respects.

Dated: April 19 , 2011

s/Patrick J. Schiltz
Patrick J. Schiltz
United States District Judge

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