Wamsley v. LifeNet Transplant Services, Inc., et al
Filing
34
MEMORANDUM OPINION AND ORDER GRANTING in part Defendant's 20 Motion to Dismiss Amended Complaint, DENYING in part Defendant's motion for costs and fees, and DISMISSES this case WITH PREJUDICE from the Court's docket. Signed by Judge Thomas E. Johnston on 11/10/2011. (cc: attys; any unrepresented party) (tmh)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
CHARLESTON DIVISION
THOMAS G. WAMSLEY,
Plaintiff,
v.
CIVIL ACTION NO. 2:10-cv-00990
LIFENET TRANSPLANT SERVICES INC., et al.
Defendants.
MEMORANDUM OPINION AND ORDER
Pending before the Court is Defendant LifeNet Transplant Services Inc.’s and Defendant
LifeNet Health’s Motion to Dismiss Amended Complaint and a motion for costs and fees. [Docket
20.] For the reasons that follow, the Court GRANTS Defendants’ Motion to Dismiss Amended
Complaint, DENIES Defendants’ motion for costs and fees, and DISMISSES this case WITH
PREJUDICE from the Court’s docket.
I. BACKGROUND
On March 22, 2010, Plaintiff sued Defendant LifeNet Transplant Services, Inc. and
Defendant LifeNet Health—both Virginia-based, non-profit corporations. (Docket 1.) Based on the
parties’ filings, it appears that Defendants are suppliers and distributors of human tissue products,
such as human tendons. (Docket 1, 1-1, 21.) Plaintiff’s original complaint alleged that he underwent
surgery to repair a rupture to the Achilles tendon in his left ankle, a procedure that involved the
implantation of a human tendon obtained from Defendants. (Docket 1-1 at 3.) Plaintiff alleged that
“a defective 23.0 cm right Achilles tendon” was implanted into his left ankle and the tendon implant
was “infected.” (Id.) Consequently, Plaintiff had to undergo additional surgeries “to correct the
damage caused by the defective tendon . . . .” Id. Plaintiff claimed that Defendants’ supplying an
“infected tendon constitutes an unfair method[ ] of competition and unfair or deceptive act[ ] or
practice[ ] as defined by W. Va. Code § 46A-6-102(7) made illegal by W. Va. Code § 46A-6-104.”1
(Id.) Plaintiff sought to recover past and future economic and consequential damages, and fees and
costs. (Id. at 4.)
On August 12, 2010, Defendants moved to dismiss the complaint on the grounds that
Plaintiff failed to allege “any action or inaction on the part of the Defendants which would constitute
unfair competition, unfair acts or practices, deceptive acts or practices, or fraudulent acts or
practices.” (Docket 7 at 3.) Rather, Defendants contended that Plaintiff “only formulaically recited
the elements of a cause of action” under the West Virginia Consumer Credit Protection Act
(WVCCPA). (Id. at 4.) Defendants further argued that Plaintiff’s WVCCPA claim is “a products
liability claim in disguise” brought only because the statute of limitations had run on Plaintiff’s
traditional tort remedies. (Id. at 4.)
In ruling on Defendants’ motion to dismiss (Docket 6) Plaintiff’s original complaint, the
Court noted that Plaintiff did not identify in his complaint the unlawful conduct in which Defendants
allegedly engaged. The Court also noted that the complaint failed to establish any nexus between that
unidentified conduct and Plaintiff’s loss. (Docket 15 at 4.) Thereupon, the Court denied Defendants’
motion to dismiss without prejudice and granted leave for the Plaintiff to amend his complaint. (Id.)
1
The pertinent provisions of the West Virginia Consumer Credit Protection Act are set forth
in W. Va. Code §§ 46A-6-101 to -110.
2
On April 14, 2011, Plaintiff filed an Amended Complaint in which he added averments that
Defendants “concealed from plaintiff, his doctors, and his hospital, that the tendon was infected.”
(Docket 17 at 2.)
He claims the alleged concealment
that a tendon provided for human implantation is infected constitutes an unfair
method of competition and unfair or deceptive act[ ] or practice[ ] as defined by W.
Va. Code § 46A-6-102(7) made illegal by W. Va. Code § 46A-6-104 in that, inter
alia, it constitutes an act, use, or employment of a deception, fraud, false pretense,
false promise or misrepresentation, or concealment, suppression or omission of any
material fact with intent that others rely upon such concealment, suppression or
omission, in connection with the sale or advertisement of any goods or services.
(Id.) Plaintiff further alleges that “but for the concealment, suppression or omission of the fact that
the tendon was infected, Plaintiff would never have had the tendon implanted into his body” and that
“as a proximate result of the concealment, suppression or omission of the fact that the tendon
distributed by [Defendants] was infected,” Plaintiff had to undergo additional corrective surgeries
and sustained economic losses. (Id. at 2-3.)
Defendants then filed a motion to dismiss the amended complaint arguing that Plaintiff’s
amended complaint fails to meet the pleading standards articulated in Ashcroft v. Iqbal, 556 U.S. 662
(2009), and Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). (Docket 21 at 3.)
Defendants further contend that Plaintiff did not have a private cause of action under the WVCCPA
because “no causal connection exists between the alleged unlawful conduct and the [Plaintiff’s]
ascertainable loss.” (Id. at 4.) More particularly, Defendants, relying on White v. Wyeth, 705 S.E.2d
828, 837 (W. Va. 2010), argue that because a physician (a “learned intermediary”) made “the
decision as to what product to use to repair [Plaintiff’s] ruptured Achilles tendon,” Plaintiff could
not establish the necessary causal connection between the alleged unlawful practice by Defendants
3
and Plaintiff’s injury. (Id. at 4.) Defendants again argue that the only reason Plaintiff filed his claim
under the WVCCPA was because the statutes of limitations on other causes of action had run. (Id.
at 5.)
In response, Plaintiff argues that the “elements Defendants claim are missing . . . are not
required elements of a claim under the [WVCCPA]” and that with respect to his averments of
concealment, “[n]o further specifics are necessary to satisfy notice pleading.” (Docket 25.) He
further states that in product liability cases, West Virginia has rejected the learned intermediary
doctrine, and for several other reasons he urges the Court not to extend the reasoning in White v.
Wyeth to the facts of this case. (Id.)
II. DISCUSSION
A.
Legal Standards
A motion to dismiss for failure to state a claim upon which relief may be granted tests the
legal sufficiency of a civil complaint. Fed. R. Civ. P. 12(b)(6). While “the requirements for
pleading a proper complaint are substantially aimed at assuring that the defendant be given adequate
notice of the nature of a claim being made against him, they also provide criteria for defining issues
for trial and for early disposition of inappropriate complaints.” Francis v. Giacomelli, 588 F.3d 186,
192 (4th Cir. 2009) (citing 5 Charles Alan Wright & Arthur R. Miller, Federal Practice and
Procedure, § 1202 (3d ed. 2004)).
“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.’ ” Iqbal, 129 S.Ct. at 1949 (quoting
Twombly, 550 U.S. at 570)). A court decides whether this standard is met by separating the legal
conclusions from the factual allegations, assuming the truth of only the factual allegations, and then
4
determining whether those allegations allow the court to reasonably infer that “the defendant is liable
for the misconduct alleged.” Id. In other words, the factual allegations (taken as true) must “permit
the court to infer more than the mere possibility of misconduct.” Id. A plaintiff’s “[f]actual
allegations must be enough to raise a right to relief above the speculative level,” thereby “nudg[ing]
[the] claims across the line from conceivable to plausible.” Twombly, 550 U.S. at 555, 570. “The
plausibility standard requires a plaintiff to demonstrate more than ‘a sheer possibility that a
defendant has acted unlawfully’ . . . [i]t requires the plaintiff to articulate facts, when accepted as
true, to ‘state a claim to relief that is plausible on its face.’ ” Francis, 588 F. 3d at 193 (quoting
Twombly, 550 U.S. at 570). While a court must accept the material facts alleged in the complaint
as true, Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999), statements of bare legal
conclusions “are not entitled to the assumption of truth” and are insufficient to state a claim, Iqbal,
556 U.S. at ___. Facts pled that are “merely consistent with” liability are not sufficient. Iqbal at
1949 (quoting Twombly, 550 U.S. at 557). “Threadbare recitals of the elements of a cause of action,
supported by mere conclusory statements, do not suffice” because courts are not bound to accept
as true a legal conclusion couched as a factual allegation. Id. (internal quotation marks omitted);
see also Nemet Chevrolet, Ltd. v. Consumeraffairs.com, Inc., 591 F.3d 250, 256 (4th Cir. 2009).
“[D]etermining whether a complaint states a plausible claim is context-specific, requiring the
reviewing court to draw on its experience and common sense.” Id. The question of whether a
complaint is legally sufficient
is measured by whether it meets the standards for a pleading stated in Rule 8
(providing general rules of pleading), Rule 9 (providing rules for pleading special
matters), Rule 10 (specifying pleading form), Rule 11 (requiring the signing of a
pleading and stating its significance), and Rule 12(b)(6) (requiring that a complaint
state a claim upon which relief can be granted).
5
Francis, 588 F.3d at 192.
Pursuant to Fed. R. Civ. P. 8(a)(2), a complaint must contain “a short and plain statement of
the claim showing that the pleader is entitled to relief.” Allegations “must be simple, concise, and
direct” and “no technical form is required.” Fed.R.Civ.P. 8(d)(1). Where, however, a claim alleges
fraud or mistake, a party must “state with particularity the circumstances constituting fraud or
mistake.” Fed.R.Civ.P. 9(b). To satisfy Rule 9(b)’s heightened pleading standard, a plaintiff must
allege facts establishing the “who, what, when, where, and how” of the claimed fraud. U.S. ex rel.
Wilson v. Kellogg Brown & Root, Inc., 525 F.3d 370, 379 (4th Cir. 2008)(citations omitted).
Because Rule 9(b) applies to averments of fraud, the determination of whether its heightened
standards apply depends on the complaint’s factual allegations. Borsellino v. Goldman Sachs Grp.,
Inc., 477 F.3d 502, 507 (7th Cir. 2007) (citing In re Daou Sys., Inc., 411 F.3d 1006, 1027-28 (9th
Cir. 2005); Cal. Pub. Employee’ Ret. Sys. v. Chubb Corp., 394 F.3d 126, 160-61 (3d Cir. 2004)).
In evaluating whether a cause of action must be pled with particularity, a court should examine
whether the claim requires an essential showing of fraud. Baltimore Cnty. v. Cigna Healthcare, 238
F. App’x 914, 921 (4th Cir. 2007).
Fraud is a generous tort, encompassing affirmative misrepresentations and omissions alike,
its boundaries limited only by the imaginations of crafty and unprincipled minds. See Black’s Law
Dictionary 731 (9th ed. 2009) (defining fraud as a “knowing misrepresentation of the truth or
concealment of a material fact to induce another to act to his or her detriment”). A claim that
“sounds in fraud” must satisfy Rule 9(b)’s more rigorous pleading standards. Cozzarerelli v. Inspire
Pharms., Inc., 549 F.3d 618, 629 (4th Cir. 2008) (stating that where claims have “the substance of
fraud,” Fed.R.Civ.P. 9(b) applies even though fraud may not be an element) .
6
Rule 9(b)’s heightened pleading standards advance several interests, including “protecting
defendants’ reputations from baseless accusations, eliminating unmeritorious suits that are brought
only for their nuisance value, discouraging fishing expeditions brought in the dim hope of
discovering a fraud, and providing defendants with detailed information in order to enable them to
effectively defend against a claim.” Pub. Emps. Ret. Ass’n of Colo. v. Deloitte & Touche
Accountants, 551 F.3d 305, 311 (4th Cir. 2009); see also 5A Wright & Miller § 1296. In Harrison
v. Westinghouse Savannah River Co., 352 F. 3d 908, 921-22 (4th Cir. 2003) the Fourth Circuit
stated that
Rule 9(b) has four purposes: First, the rule ensures that the defendant has sufficient
information to formulate a defense by putting it on notice of the conduct complained
of . . . . Second, Rule 9(b) exists to protect defendants from frivolous suits. A third
reason for the rule is to eliminate fraud actions in which all the facts are learned after
discovery. Finally, Rule 9(b) protects defendants from harm to their goodwill and
reputation.
Id. (quoting United States ex rel. Stinson, Lyons, Gerlin & Bustamante, P.A. v. Blue Cross Blue
Shield of Ga., Inc., 755 F. Supp. 1055, 1056-57 (S.D. Ga. 1990)).
A court should hesitate to dismiss a complaint under Rule 9(b) if the court believes that “the
defendant has been made aware of the particular circumstances for which she will have to prepare
a defense at trial” and that the “plaintiff has substantial prediscovery evidence of those facts.”
Harrison, 176 F.3d at 784; see also Dunn v. Borta, No. 03–1362, 2004 WL 1110424 (4th Cir. May
19, 2004) (finding that where the complaint provided fair notice of the claims made against
defendant, the fraud claims should not have been dismissed); Westinghouse Savannah River Co., 352
F.3d 908, 921–22 (4th Cir. 2003) (same).
7
Pursuant to Fed.R.Civ.P. 11(b), a lawyer, when filing a pleading, motion, or “other paper,”
certifies that “to the best of [his or her] knowledge, information, and belief, formed after an inquiry
reasonable under the circumstances” that “the claims, defenses, and other legal contentions therein
are warranted by existing law or by a nonfrivolous argument for the extension, modification, or
reversal of existing law or the establishment of new law” and that “the allegations and other factual
contentions have evidentiary support or, if specifically so identified, will likely have evidentiary
support after a reasonable opportunity for further investigation or discovery.” Fed.R.Civ.P.
11(b)(2)& (3). “A legal argument fails to satisfy Rule 11(b)(2) when ‘in applying a standard of
objective reasonableness, it can be said that a reasonable attorney in like circumstances could not
have believed his actions to be legally justified.’ ” Morris v. Wachovia Secs., Inc., 448 F.3d 268, 277
(4th Cir. 2006) (citing Hunter v. Earthgrains Co. Bakery, 281 F.3d 144, 153 (4th Cir. 2002)). “The
legal argument must have absolutely no chance of success under the existing precedent” to
contravene the rule. Id. (punctuation omitted). Factual allegations fail to satisfy Rule 11(b)(3) when
they are “unsupported by any information obtained prior to filing.” Id. (citing Brubaker v. City of
Richmond, 943 F.2d 1363, 1373 (4th Cir. 1991)).
Finally, in reviewing the sufficiency of a complaint a court may consider sources beyond the
four corners of the complaint, including “documents incorporated into the complaint by reference,
and matters of which a court may take judicial notice” or sources “whose accuracy cannot reasonably
be questioned.” Katyle v. Penn Nat. Gaming, Inc., 637 F.3d 462, 466 (4th Cir. 2011) (citation
omitted).
8
B.
Analysis
1.
Plaintiff’s Amended Complaint is Legally Insufficient under the Federal
Rules of Civil Procedure
Plaintiff’s amended complaint fails as a matter of law. In his amended complaint, Plaintiff
states that his cause of action is premised on W. Va. Code §§ 46A-6-104 and 46A-6-102(7). (Docket
17 at 2.) Section 46A-6-104 provides: “Unfair methods of competition and unfair or deceptive acts
or practices in the conduct of any trade or commerce are hereby declared unlawful.” Section 46A-6102(7) lists sixteen separate illustrations of “[u]nfair methods of competition and unfair or deceptive
acts or practices.” In his amended complaint, Plaintiff does not specify upon which sub-section of
§ 46A-6-102(7) he bases his claim. It is clear, however, that Paragraph 9 of his amended complaint
closely tracks the conduct proscribed in § 46A-6-102(7)(M). Sub-section 102(7)(M) makes
unlawful:
The act, use or employment by any person of any deception, fraud, false pretense,
false promise or misrepresentation, or the concealment, suppression or omission of
any material fact with intent that others rely upon such concealment, suppression or
omission, in connection with the sale or advertisement of any goods or services,
whether or not any person has in fact been misled, deceived or damaged thereby.
Plaintiff’s sole factual allegation concerning Defendants’ alleged unlawful conduct is: “That
the defendants LifeNet Transplant and/or LifeNet Health concealed from plaintiff, his doctors, and
his hospital, that the tendon was infected.” He offers not a single fact in support of his theory that
Defendants concealed from surgeons the fact that the human tissue they provided was “infected” and
knew that the surgeons would implant the diseased tendon into a human body. Indeed, the serious
nature of this allegation makes it more at home in a criminal court than a consumer fraud action.
Such an unadorned, conclusory averment leashed to not a single supporting fact fails to meet the
9
basic pleading standards announced in Iqbal and Twombly. As pleaded, Plaintiff’s threadbare
allegations are speculative, at best, and fail to permit the Court to infer plausible misconduct by
Defendants.
Moreover, Plaintiff’s allegation that Defendants concealed a material fact sounds in fraud
and, thus, triggers rigorous pleading requirements under Fed.R.Civ.P. 9(b). Jones v. Sears, Roebuck
and Co., 301 F. App’x. 276, 287 (4th Cir. 2008) (unpublished) (stating that where a claim is brought
under W. Va. Code § 46A-6-102(7)(M) “a plaintiff is obliged to plead with particularity” that a
defendant has fraudulently misrepresented or omitted material facts); see also Pirelli Armstrong Tire
Corp. Retiree Med. Benefits Trust v. Walgreen Co., 631 F.3d 436, 437 (7th Cir. 2011) (finding that,
where plaintiff’s consumer fraud allegations concerned misrepresentations and concealment, Rule
9(b)’s heightened pleading requirements governed); In re Sony Grand Wega KDF-E A10/A12 Series
Rear Projection HDTV Television Litigation, 758 F. Supp. 2d 1077, 1088-89 (S.D. Cal. 2010)
(finding that Rule 9(b) applied to claims relating to consumer protection statute and claims of
consumer fraud); Meserole v. Sony Corp. of Amer., No. 08 Cv. 8987 (RPP), 2009 WL 1403933
(S.D.N.Y. May 19, 2009) (same); Thorogood v. Sears, Roebuck and Co., No. 06 C 1999, 2006 WL
3302640 (N.D. Ill. 2006) (same); Archdiocese of San Salvador, v. FM Int’l,LLC., No. 05-cv-237-JD,
2006 WL 2583262 (D.N.H. 2006) (same); Meadowlands v. CIBC World Markets Corp., No. 04 Civ.
7328(DAB), 2005 WL 2347856 (S.D.N.Y.2005) (same); Nasik Breeding v. Merck & Co., Inc., 165
F. Supp.2d 514 (S.D.N.Y. 2001) (same); Tuttle v. Lorillard, 118 F. Supp.2d 954, 963 (D. Minn.
2000) (same).
This shoot-and-ask-questions-later lawsuit offends the policies underlying Fed. R. Civ. P.
9(b). “The clear intent of Rule 9(b) is to eliminate fraud actions in which all the facts are learned
10
through discovery after the complaint is filed.” Harrison, 176 F.3d at 789. Plaintiff offers no facts
to support a good faith belief that Defendants knowingly distributed diseased or “infected” human
body parts to Plaintiff’s health care providers. He offers nothing that would provide Defendants with
sufficient information to defend against Plaintiff’s claim: he provides no names, places, dates, or
times, and no concrete facts to support the alleged conduct. He offers no narrative on what was
medically deficient about the tendon implant except to state that it was “infected.” Plaintiff offers
no reason for the Court to infer that Defendants—and not some other entity or person in the
chain—was responsible. Fed. R. Civ. P. 9(b) is designed to require plaintiffs to conduct responsible
pre-litigation investigation before filing suit. Nothing in Plaintiff’s complaint convinces the Court
that this was done. The Court’s determination is buttressed by the fact that, in Plaintiff’s responses
to Defendants’ motions to dismiss, Plaintiff’s statement of the factual background of the dispute
simply parrot the same unsupported conclusory allegations set forth in his pleadings. As presented,
it appears to the Court that there was no substantial prediscovery evidence of Defendants’ alleged
misconduct and that this case is a fishing expedition “brought in the dim hope of discovering a
fraud.” Pub. Emps. Ret. Ass’n of Colo., 551 F.3d at 311. Nor does Plaintiff qualify his allegation of
misconduct, as required by Fed.R.Civ.P. 11, by stating he will likely have evidentiary support for
his claim after a reasonable opportunity for further investigation or discovery.
In sum, Plaintiff’s theory of liability, as alleged, fails to cross “the line between possibility
and plausibility of entitlement to relief.” Twombly, 550 U.S. at 557 (internal quotation marks
omitted). Where the crux of Plaintiff’s claim is that Defendants concealed their knowledge that the
human tendon implant they supplied to Plaintiff’s physicians was “infected, and where Plaintiff
offers no facts—concrete or otherwise—to support his allegation, his amended complaint fails as a
11
matter of law because it satisfies neither Rule 8's basic pleading standard, much less Rule 9(b)’s
heightened particularity pleading requirements that are required in this case.
2.
Plaintiff’s Claim is Not Cognizable under the West Virginia Consumer Credit
Protection Act
Even if Plaintiff’s amended complaint were the model of perfect pleading under the Rules
of Civil Procedure, it would still fail because it does not state a cognizable claim under the
WVCCPA.
Pursuant to W. Va. Code § 46A-6-106:
Any person who purchases or leases goods or services and thereby suffers any
ascertainable loss of money or property, real or personal, as a result of the use or
employment by another person of a method, act or practice prohibited or declared to
be unlawful by the provisions of this article may bring an action in the circuit court
of the county in which the seller or lessor resides or has his principal place of
business or is doing business, or as provided for in sections one and two, article one,
chapter fifty-six of this code, to recover actual damages or two hundred dollars,
whichever is greater. The court may, in its discretion, provide such equitable relief
as it deems necessary or proper.
Unlawful conduct under the WVCCPA is defined as “[u]nfair methods of competition and
unfair or deceptive acts or practices in the conduct of any trade or commerce. . . .” W. Va. Code §
46A-6-104. As noted supra, § 46A-6-102(7)(A)-(M) lists sixteen illustrative types of “unfair
methods of competition and unfair or deceptive acts or practices.” Pursuant to § 46A-6-102(2), a
“consumer” is “a natural person to whom a sale or lease is made in a consumer transaction and a
‘consumer transaction’ means a sale or lease to a natural person or persons for a personal, family,
household or agricultural purpose.”
To state a private cause of action under W. Va. Code §§ 46A-6-106 and 46A-6-102(7)(M)
a consumer has to allege: 1) unlawful conduct by a seller; 2) an ascertainable loss on the part of the
12
consumer; and 3) a causal connection between the ascertainable loss and the conduct forming the
basis of the lawsuit. Syl. Pt. 5, White v. Wyeth, 705 S.E.2d 828 (W. Va. 2010).
Plaintiff cannot shoulder his burden of stating a claim upon which relief can be granted
because, within the meaning of the WVCCPA, the provisioning of blood and human tissue by the
non-profit Defendants to Plaintiff’s health care providers is not “trade or commerce”; the service
provided by the Defendants was not performed “in connection with the sale or advertisement of any
goods or services”; Plaintiff is not a “consumer”; and Plaintiff and Defendants did not enter into a
“consumer transaction.” See W. Va. Code §§ 46A-6-102(2), -102(7)(M), -104.
The West Virginia Legislature, in accord with many other jurisdictions, expressed its intent
that suppliers of human blood and tissue products be held to different legal standards than those
businesses that manufacture, distribute, and sell conventional goods and services. For example,
nearly forty years ago, the West Virginia Legislature shielded distributors of human blood and tissue
products from strict liability in tort and breach of warranty suits. West Virginia Code § 16-23-1
provides:
The procuring, furnishing, donating, processing, distributing or the using of human
whole blood, blood plasma, blood products, blood derivatives, corneas, bones or
organs or other human tissue for the purpose of injecting, transfusing or transplanting
any of them in the human body, is declared for all purposes to be the rendition of a
service by every person, firm or corporation participating therein, whether or not any
remuneration is paid therefor, and is declared not to be a sale of any such items and
no warranties of any kind or description shall be applicable thereto.
(emphasis added). By broadly declaring “for all purposes” that blood and tissue distributors are
rendering a service— and not making a sale—when they provide human blood and tissue products
the West Virginia Legislature intended to limit the liability of such distributors in contract warranty
and strict liability tort claims, plainly distinguishing human body products from ordinary goods. This
13
statute reflects a legislative judgment that, in the absence of negligence or intentional acts, exposing
procurers of human body parts, fluids, organs and tissue to liability would likely discourage the
provisioning of life-saving and other critical medical services. As one court explained, “[t]o ensure
that such services remain adequate and affordable, legislatures have chosen to limit liability to
defects that are the result of negligence, thus bringing the provision of such services necessary for
medical treatment into the same category as the provision of other medical services. Zichichi v.
Middlesex Mem’l Hosp., 528 A.2d 805, 811 (Conn. 1987) (interpreting Connecticut’s former blood
shield statute C.G.S.A. § 19a-280) (provisions of repealed blood shield statute that exempted blood
and human tissue procurement organizations from liability based on implied warranty theories are
presently set forth in Connecticut’s anatomical donation statute, Conn. Gen. Stat. Ann. § 19a-289q);
see also Cryolife, Inc. v. Superior Court of Santa Cruz, 2 Cal. Rptr.3d 396, 402 (Cal. Ct. App. 2003)
(stating that “the public policy in favor of promoting an adequate supply of blood militates against
liability in the absence of negligence or intentional misconduct.”).
This same legislative intent is also evinced in West Virginia’s Revised Anatomical Gift Act.
W. Va. Code § 16-19-1 et seq. There, the state legislature criminalized the purchase and sale of
human organs, eyes and tissue. W. Va. Code § 16-19-16(a). The Act also grants blanket immunity
to any “person, including a medical examiner, who acts in accordance with this article or with the
applicable anatomical gift law of another state, or attempts in good faith to do so [and such person]
is not liable for the act in a civil action, criminal prosecution or administrative proceeding.” W. Va.
Code § 16-19-17.
In Foster v. Memorial Hospital Ass’n of Charleston, 219 S.E.2d 916, 920 (W. Va. 1975), the
court addressed a claim of implied warranty against a hospital arising from the transfusion of impure
14
blood. The incident occurred just prior to the enactment of West Virginia’s blood shield statute, and
thus, the court analyzed the case under the law of warranty. Id. at 918. The court found that the
“great weight of authority” was that “a transaction involving the sale of blood is not a ‘sale’ creating
an implied warranty of fitness.” Id. (citing Perlmutter v. Beth David Hosp., 123 N.E.2d 792 (N.Y.
1954). In rejecting the plaintiff’s contention that the risk of infection from blood should be borne
by the defendant hospital, the court noted:
Unlike standard commercial products, however, blood is dispensed under a wide
variety of circumstances which do not lead to the imposition of the type of uniform
standard of care envisaged by the law of warranty. In this regard blood which is
manufactured in the human body can be distinguished from standardized drugs in
that the latter are amenable to quality control by the manufacturer while human blood
is obviously not. One can imagine a situation in which a patient needs a large
quantity of blood over a protracted period of time, and in which blood is taken from
one donor after another to be transfused almost immediately into the patient.
Obviously under circumstances such as this the degree of ‘reasonable care’ necessary
to protect the hospital from liability must be lower than in other circumstances
because the exigencies of the situation demand speed, and the time necessary for the
performance of tests is not available. Otherwise the hospital leaves the healing
business and enters the insurance business.
Id. at 921.
In the case at hand, the Defendants are distributors— not a hospital or a physician; the human
product is an Achilles tendon—not blood; and the procedure, while intended to be life-enhancing,
was probably not necessary to sustain Plaintiff’s life. These distinguishing facts, however, do not
change the Court’s view that the state legislature intended to proscribe the sale of human body parts
on public policy grounds and also broadly intended to limit lawsuits against those firms and
organizations that distribute human body fluids and parts. Allowing Plaintiff to morph what is most
naturally a products liability or breach of warranty action into a purported statutory consumer
15
protection claim would permit an end-run around the state’s blood shield statute. That tactic plainly
subverts the state legislature’s intended purpose in enacting W. Va. Code § 16-23-1.
This conclusion is buttressed by West Virginia’s highest court’s decision in White v. Wyeth
705 S.E.2d at 828. In White, plaintiffs brought a class action under the WVCCPA. The plaintiffs
alleged that the defendants, a pharmaceutical company and its marketing firm, used unfair and
deceptive business practices in promoting hormone replacement therapy drugs to doctors and
patients. Id. at 830-31, n. 2. Plaintiffs claimed that the defendants used misleading statements in
“advertising, marketing and labeling of the products.” Id. The Supreme Court of Appeals of West
Virginia, answering a certified question from the trial court, found that where the WVCCPA claim
involves affirmative misrepresentations, then a plaintiff must prove that he relied on the
misrepresentation in order to satisfy the element of causation. Id. at 837. Where, however, the
WVCCPA claim is predicated on concealment or omissions of material facts, a plaintiff proves
causation “by presentation of facts showing that the deceptive conduct was the proximate cause of
the loss.” In applying these principles to the facts of the case, the court found that “the private cause
of action afforded consumers under West Virginia Code § 46A-6-106(a) does not extend to
prescription drug purchases.” Id. at 838. The court stated that “[p]rescription drug cases are not the
type of private causes of action contemplated under the terms and purposes of the WVCCPA because
the consumer can not and does not decide what product to purchase.” Id. The court reasoned that
because a physician exercises independent judgment whether to prescribe a particular medication
consumers have a protective buffer that is non-extant in advertising campaigns for other products.
Id. Additionally, the court noted consumer protection laws were never intended to encompass
industries that are closely monitored and regulated by a federal government regulatory scheme. Id.
16
Plaintiff contends that White has no application to his case. (Docket 25 at 4-6). His reasons
are not persuasive. First, Plaintiff argues that White’s holding that prescription drug cases fall
outside the ambit of the WVCCPA is “essentially dicta” because that determination was unnecessary
to answering the certified question posed to the court by the trial judge. (Id. at 4.) The West Virginia
Supreme Court’s determination that prescription drugs cases are exempted from the WVCCPA is
hardly obiter dictum: the court characterized its finding as a “new point of law.” White, 227 S.E.2d
at 838. Indeed, the “new point of law” was made a syllabus point in the opinion.2 Syl. Pt. 6, id.
Similarly unpersuasive is Plaintiff’s additional contention that “this Court should be hesitant
to expand the White holding” because “two of the five active members of the court” were not
members of the panel. Under West Virginia law, a decision from the West Virginia Supreme Court
of Appeals is binding authority where three or more justices concur in the decision. W. Va. Const.
Art. 8, § 4 (“No decision rendered by the court shall be considered as binding authority upon any
court, except in the particular case decided, unless a majority of the justices of the court concur in
such decision.”). White was unanimously decided by three-member panel of the court. Plaintiff
tenders no rule or law to support the notion that court opinions delivered by a panel comprised in
part of jurists sitting by temporary designation lack precedential authority. Logic dictates that, as
in the federal system, a state court judge sitting by temporary assignment has concomitant powers
2
Article VIII, section 4, of the Constitution of West Virginia provides:
When a judgment or order of another court is reversed, modified or affirmed by the
court, every point fairly arising upon the record shall be considered and decided; the
reasons therefor shall be concisely stated in writing and preserved with the record;
and it shall be the duty of the court to prepare a syllabus of the points adjudicated in
each case in which an opinion is written and in which a majority of the justices
thereof concurred, which shall be prefixed to the published report of the case.
17
to decide or join in opinions of that court. See 28 U.S.C. § 296 (stating that, with the exception of
two specified ministerial tasks,“a [federal] justice or judge shall have all the powers of a judge of
the court, circuit or district to which he is designated and assigned during the period of temporary
assignment). In the absence of any state law or rule limiting the precedential weight of opinions
joined or written by judges serving by temporary designation, and in light of White’s persuasive
reasoning, the Court rejects Plaintiff’s contention.
Plaintiff also contends without elaboration that while White’s reasoning that the intervention
of a physician in the decision-making process “may makes (sic) sense in the context of a failure to
warn case . . . it loses its persuasive value in the context of a case where the service results in a
provision of tissue that is not what the physician intended to implant—tissue free from infection.”
(Docket 25 at 5.)
This reasoning is unconvincing. White stands for the common-sense proposition that where
there is a protective intermediate decision-making buffer the patient-consumer is insulated from the
wrongs the WVCCPA seeks to redress. In White, it was a physician who made the decision what
product the patient-consumer purchased. And “because the consumer can not and does not decide
what product to purchase,” the court found that the physician’s intervention in the consumer’s
decision-making process severed any causal connection between the defendants’ conduct and the
plaintiffs’ injury. This fact, along with the high degree of federal regulation of the pharmaceutical
industry, caused the court to determine that the state legislature did not intend to extend a private
cause of action under the WVCCPA relating to prescription drug purchases. Id. at 838. After all,
a purpose of the WVCCPA is, among others, to “protect consumers who purchase goods or services
for cash or credit from, and to give them remedies for, defective or shoddy goods and services and
18
unfair and deceptive selling practices.” State ex rel. McGraw v. Bear, Stearns & Co., Inc., 618
S.E.2d 582, 587 (W. Va. 2005) (quoting Vincent P. Cardi, The West Virginia Consumer Credit and
Protection Act, 77 W. Va. L. Rev. 401 (1974-75)).
Here, based on the averments in his complaint, Plaintiff, like the plaintiffs in White, was not
a consumer who was left to tackle on his own the complex medical decision as to which tendon
implant was medically appropriate and which human tissue procurement organization to utilize.
Rather, those decisions were undoubtedly made entirely by Plaintiff’s health care providers. There
is no principled difference between carving out an exception for liability under the WVCCPA for
a physician who determines which drug to prescribe and a physician who decides which human
blood or tissue products are medically appropriate and safe.
Finally, in White the Court noted that a pertinent factor in deciding whether a claims falls
within the scope of the WVCCPA is whether the safety of the product is already closely monitored
and regulated by the government. Id. at 838. Mortgage lenders and brokers, pawnbrokers, insurance
sales, regulated public utility transactions are expressly exempted by W. Va. Code § 46A-1-105.
Investment advisors, too, are exempted. State v. Bear, Stearns & Co., Inc., 618 S.E.2d 582, 588 (W.
Va. 2005)(finding that securities industry is “so pervasively regulated by the federal government”
it is doubtful that the legislature “intended to give securities investors an added measure of protection
above that already provided by the various” federal and states laws.).
One rationale underlying the relevance of this “regulated industry” factor is that “government
enforcement or administrative systems are preferable to civil litigation” in that government
enforcement “allows publicly-accountable officials to determine policy” and offer an “effective
screening mechanism for claims that are without merit in law or fact.” Victor E. Schwartz, Cary
19
Silverman, Christopher E. Appel, “That’s Unfair!” Says Who—The Government or the Litigant?:
Consumer Protection Claims Involving Regulated Conduct,” 47 Washburn L.J. 93, 101-02 (2007).
Where regulatory agencies have the power to enforce a range of civil and criminal penalties in order
to achieve compliance, these “well-developed procedures fall to the wayside when claims falling
within the jurisdiction of the agency go straight into the judicial system.” Id.
The procurement of human blood, organs and tissue is highly regulated by state and federal
authorities alike. See e.g., W. Va. Code § 16-19-15 (requiring hospitals to enter into agreements
with procurement organizations for procuring and use of anatomical gifts); id. § 16-19-14 (setting
forth the rights and responsibilities of human organ and tissue procurement organizations and
others); id. 16-19-17 (providing immunity for persons complying with statute); id. § 16-19-19
(permitting the division of motor vehicles to establish or contract for a donor registry and requiring
any registry to be accessible to procurement organizations twenty-four hours a day, seven days a
week); id. 16-19-21 (requiring cooperation between the state medical examiner and procurement
organization); see also e.g., 42 U.S.C. § 262 (regulating biological products; establishing licensing
requirements, facility inspection rules, and civil and criminal penalties); id. § 264 (regulating the
transmission and spread of communicable diseases); 42 U.S.C. § 273-274g (regulating organ
procurement organizations and related matters; providing criminal penalties for sale of human organs
for transplantation); 21 C.F.R. §§ 1270.1-43 (regulating human tissue intended for transplantation
to a human for the diagnosis, cure, mitigation, treatment, or prevention of any condition or disease;
establishing required testing procedures for viruses and infectious diseases and record-keeping
procedures; and authorizing Federal Drug Administration inspections of human tissue establishments
covered by the regulations). Thus, where extensive state and federal regulatory schemes cover
20
human blood, organ and tissue procurement organizations, compelling public policy
reasons—including maintaining consistency in federal and state regulatory goals and the availability
of alternative fora for addressing consumer complaints such as Plaintiff’s—all weigh in favor of
exempting Defendants’ alleged conduct from the WVCCPA. See “That’s Unfair!” Says Who—The
Government or the Litigant?: Consumer Protection Claims Involving Regulated Conduct,” 47
Washburn L.J. at 101-02
Finally, Plaintiff, correctly noting the legal unavailability of a products liability action,
contends that if his WVCCPA complaint is dismissed, he will be left with no adequate legal remedy.
(Docket 25 at 5.) It is true that the WVCCPA was intended “to protect consumers from unfair,
illegal, and deceptive acts or practices by providing an avenue of relief for consumers who would
otherwise have difficulty proving their case under a more traditional cause of action.” State ex rel.
McGraw v. Scott Runyan Pontiac-Buick, Inc., 461 S.E.2d 516, 523 (W. Va. 1995). Here, however,
any difficulty Plaintiff might having pursuing more traditional causes of action is likely his own
fault. Defendants claim that the reason Plaintiff brought his WVCCPA claim is because he failed
to pursue negligence and medical malpractice claims in a timely fashion. (Docket 27 at 4.) The
legislature, however, did not intend that WVCCPA serve as a Plan B litigation backstop for ultra
vires consumer claims when a plaintiff had—but squandered —appropriate traditional causes of
action.
III. CONCLUSION
For the foregoing reasons, the Court GRANTS Defendants’ Motion to Dismiss Amended
21
Complaint [Docket 20], DENIES Defendants’ motion for costs and fees, and DISMISSES this case
WITH PREJUDICE from the Court’s docket.
IT IS SO ORDERED.
The Court DIRECTS the Clerk to send a copy of this Order to counsel of record and any
unrepresented party.
ENTER:
22
November 10, 2011
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