Opinion
ORDER DENYING DEFENDANT'S MOTION FOR PARTIAL SUMMARY JUDGMENT
HOWARD R. LLOYD, Magistrate Judge.
This is a products liability action based on the court's diversity jurisdiction. Plaintiff claims that she sustained injuries during cosmetic eye surgery as a result of defendant's failure to adequately warn of risks associated with its cautery device which was used during the surgery. On October 5, 2004, this court heard defendant's motion for summary judgment on plaintiff's claims for fraudulent concealment and punitive damages. Plaintiff opposed the motion. Based upon the papers filed by the parties, as well as the arguments of counsel, the motion is denied.
Pursuant to 28 U.S.C. § 636(c) and Fed.R.Civ.P. 73, all parties have expressly consented that all proceedings in this matter may be heard and finally adjudicated by the undersigned magistrate judge.
I. BACKGROUND
For purposes of the present motion, the following facts are not materially disputed by the parties:
On May 1, 2002, plaintiff Kwi C. Butler ("plaintiff") underwent cosmetic eye surgery at Travis Air Force Base. The surgery was performed by Dr. Amir Pirouzian. During the surgery, Dr. Pirouzian used a handheld cautery device - the Model AA03 High Temp Loop Cautery Device (the "AA03") - produced by defendant Aaron Medical Industries ("defendant"). During the surgery, the surgical drapes covering plaintiff's face caught fire. Plaintiff suffered facial burns and scarring.
Defendant claims that it was erroneously sued as "Aaron Medical Industries, Inc., " and that its correct name is Bovie Medical Corporation (also known as Aaron Medical Industries).
The parties characterize the facts about the fire differently, and draw different inferences from those facts as to defendant's alleged duty to warn of risks associated with the use of the AA03. Plaintiff contends that the intense heat or a spark from the AA03 ignited the oxygen flow from the nasal cannula. She claims that (1) the AA03 was approximately 20-22 centimeters from the nasal cannula at the time the fire ignited, and (2) defendant failed to provide an adequate warning as to the risk of fire.
Defendant claims that the fire was due to user error when Dr. Pirouzian held the AA03 in close proximity to the surgical drapes and dry gauze covering plaintiff's face while 100% oxygen was being administered to plaintiff. It argues that at the time of plaintiff's surgery Dr. Pirouzian was well aware of the risk of fire in connection with use of a cautery device, and that defendant had no duty to warn Dr. Pirouzian of any such facts.
The warning that appeared on the AA03 device and packaging used during the surgery stated:
WARNING: Do not use in the presence of flammable materials. Fire could result.
In August 2001, approximately eight months before plaintiff's surgery, defendant modified this warning to state:
WARNING: Do not use in the presence of flammable gases/materials or oxygen enriched environments. Fire could result.
Defendant did nothing to disclose the modified warning to Dr. Pirouzian, and there is no evidence that defendant recalled devices with the old warning.
On January 17, 2003, plaintiff filed this lawsuit in state court, asserting strict liability and negligence based on defendant's alleged failure to adequately warn of the risks associated with the use of the AA03. Defendant removed the matter to this court, asserting diversity jurisdiction under 28 U.S.C. § 1332. On July 28, 2004, plaintiff was given leave to amend her complaint to add claims for fraudulent concealment and punitive damages. She alleges that, among other things, a July 2001 FDA report ("FDA Report") produced in discovery demonstrates that defendant fraudulently failed to disclose the revised AA03 warning to Dr. Pirouzian.
Defendant now moves for partial summary judgment, arguing that plaintiff does not have sufficient evidence to raise a genuine issue of material fact as to her claims for fraudulent concealment and punitive damages.
Anticipating that plaintiff might seek to introduce evidence of "fraud on the FDA, " in its opening brief, defendant argued that there is no evidence of any such fraud. This appears to be a non-issue. Plaintiff does not claim that defendant perpetrated a fraud on the FDA.
II. LEGAL STANDARD
A motion for summary judgment should be granted if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. FED. R. CIV. P. 56(c)); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). The moving party bears the initial burden of informing the court of the basis for the motion, and identifying portions of the pleadings, depositions, answers to interrogatories, admissions, or affidavits which demonstrate the absence of a triable issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the moving party meets its initial burden, the burden shifts to the non-moving party to present specific facts showing that there is a genuine issue of material fact for trial. FED. R. CIV. P. 56(e); id. at 324.
In determining whether summary judgment is warranted, it is not the court's role to weigh the evidence. Anderson, 477 U.S. at 249. The evidence and all reasonable inferences must be viewed in the light most favorable to the nonmoving party. T.W. Elec. Service, Inc. v. P. Elec. Contractors Ass'n, 809 F.2d 626, 630-31 (9th Cir. 1987). Summary judgment is not appropriate if the nonmoving party presents evidence from which a reasonable factfinder could resolve the material issue in its favor. Anderson, 477 U.S. at 248.
In this diversity action, the court applies California substantive law and federal rules of procedure. See Motus v. Pfizer, Inc., 358 F.3d 659, 660 (9th Cir. 2004).
III. DISCUSSION
The necessary elements of a claim for fraudulent concealment are:
(1) the defendant must have concealed or suppressed a material fact; (2) the defendant must have been under a duty to disclose the fact to the plaintiff; (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff; (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact; and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage.
Lovejoy v. AT&T Corp., 92 Cal. App.4th, 85, 96 (2001) ( quoting Marketing West, Inc. v. Sanyo Fisher (USA) Corp., 6 Cal.App.4th 603, 612-13 (1992)). There is no dispute that plaintiff sustained injuries; but defendant argues that she does not have sufficient evidence to establish the first four elements of her claim.
A. Concealment/Duty to Disclose
The mere failure to disclose material facts known to one party and not the other ordinarily is not actionable fraud, unless there is a duty to disclose, or one party alone has knowledge of material facts that are not accessible to the other. See generally Weiner v. Fleischman, 54 Cal.3d 476, 483 (1991); Goodman v. Kennedy, 18 Cal.3d 335, 347-48 (1976).
In this case, the parties agree that defendant's duty to warn (if any) runs to Dr. Pirouzian, rather than to plaintiff herself. See generally Carlin v. Super. Ct., 13 Cal.4th 1104, 1116 (1996). A manufacturer may not be required to warn of a risk that is readily known and apparent to physicians or to the medical community. See generally id. ( citing Plenger v. Alza Corp., 11 Cal.App.4th 349, 362 (1992)). Here, there is no dispute that defendant did not disclose the revised warning to Dr. Pirouzian, but the parties vigorously disagree as to whether defendant had any duty to disclose that warning to him.
Defendant contends that plaintiff cannot establish concealment of any material fact because at the time of plaintiff's surgery Dr. Pirouzian was already aware of the risk of fire associated with the use of a cautery device. Here, it cites to portions of Dr. Pirouzian's deposition testimony in which he agreed that:
• a handheld disposable cautery device can be a source of ignition;
• a surgical drape can be a source of fuel for fire;
• there is a potential risk for fire in a facial surgery, particularly when oxygen is administered;
• he did not need additional warnings to accompany a Bovie handheld disposable cautery device to inform him that a fire could start if the cautery is on and is in too close proximity to 100% oxygen and a drape;
• the risk of fire may be reduced if the surgical drape is vented to permit oxygen to dissipate, the flow of oxygen is stopped immediately before and during cautery use, or if oxygen is delivered at concentrations equal to ambient air or at less than 100 percent; and
• it is the surgeon's responsibility, and not that of a manufacturer, to consider and balance various risks and make the appropriate determinations as to how best to perform surgery.
( See Dopson Decl., Ex. A (Pirouzian Depo. at 24:18-26:11, 26:22-27:8, 27:20-29:18, 43:17-44:4, 109:13-111:14)). Defendant also presents Dr. Pirouzian's testimony in which he agreed that adding the words "one hundred percent oxygen" to the old warning or seeing the words "oxygen enriched environment" from the revised warning would not have changed his behavior or the surgery he performed on plaintiff. ( See id. at 113:6-23, 144:9-20).
Based upon this testimony, defendant argues that it is entitled to summary judgment under Motus v. Pfizer, Inc., 196 F.Supp.2d 984 (C.D. Cal. 2001), aff'd 358 F.3d 659 (9th Cir. 2004). Indeed, it appears that "most cases do not permit a plaintiff to get past summary judgment where the doctor made unequivocal statements in a pre-trial deposition demonstrating that adequate warnings would not have affected his or her [conduct at issue]." Id. at 997-98. In Motus, summary judgment was entered in favor of the defendant manufacturer on a claim for failure to warn, where the physician testified that he did not rely on defendant's admittedly inadequate warning in prescribing the drug at issue, and plaintiff presented no evidence that the physician would have acted differently if defendant had provided an adequate warning.
However, the Motus court stated that summary judgment would not be warranted if plaintiff had presented any evidence putting the physician's credibility in question as to whether the claimed stronger warning would have changed his behavior. See id. at 997. Specifically, it noted that plaintiff should have asked the physician whether - even without reading the alleged inadequate warning - he would have acted differently if he had been given the warning plaintiff argued was necessary. Depending on the physician's answer, the court noted that it might well have reserved the issue of the physician's credibility for the jury. Id.
In the instant action, plaintiff has presented precisely such evidence. Here, she points out that Dr. Pirouzian testified that, if he had seen the revised warning before plaintiff's surgery, he still would have used the AA03, but he would have shut off the oxygen:
Q: And had you seen that warning prior to performing the surgery on Ms. Butler, you would have reconsidered the use of that high-temperature handheld cautery device for that procedure?
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A: The answer is yes, and I would have used it, however, with a different conjunction. I would have turned off the oxygen.
(Schrader Decl., Ex. G (Pirouzian Depo. at 120:21-121:7)).
Defendant contends that Dr. Pirouzian's testimony is merely "hindsight" and therefore irrelevant, citing Scarano v. Schnoor, 158 Cal.App.2d 612, 622 (1958), a medical malpractice action in which the court affirmed that "[n]egligence is not to be determined by hindsight nor by what a party subsequently learns." However, Motus, a failure to warn case, is closer to the instant case and is therefore, the more persuasive authority. The court concludes that the testimony presented by plaintiff raises a credibility issue for the jury's determination.
B. Fraudulent Intent
Even assuming there is a duty to disclose the revised warning to Dr. Pirouzian, defendant contends that there is no evidence that it acted with fraudulent intent. Fraudulent intent is ordinarily proved by inference rather than by direct evidence. See generally Bell v. Graham, 105 Cal.App.2d 765, 767 (1951).
Although defendant concedes that it did not provide the revised warning to Dr. Pirouzian, it argues that there is no evidence indicating that it acted with any intent to defraud. Here, it asserts, that it did not provide Dr. Pirouzian with the revised warning because (1) the revised warning did not contain any material fact that was not already well known to Dr. Pirouzian; and (2) it considered "Dear Dr." letters advising of a modification to be ineffective. In support of its argument, defendant cites the testimony of John Saron, defendant's president, in which he stated that (1) defendant has a system for modifying its products; (2) defendant might voluntarily recall any product if the warning was significantly modified; and (3) he did not remember any instance where defendant advised of a modified warning by letter, but doubted that such letters would be effective. ( See Dopson Decl., Ex. F 7:20-22, 45:5-24, 46:12-47:6, 48:10-18). Further, defendant argues - for the first time in its reply brief - that 21 U.S.C. § 360i(b)(3) precludes plaintiff from using information in the FDA Report to support her claims in this litigation.
21 U.S.C. § 360i(b)(3) provides that:
On the present record, it is not clear whether the information referenced in the FDA Report falls within the scope of 21 U.S.C. § 360i(b)(3). Even assuming that plaintiff cannot rely upon the FDA Report, she has presented other evidence that may give rise to an inference that defendant acted with fraudulent intent:
• Mr. Saron's deposition testimony indicating that Travis Air Force Base purchased AA03 devices from defendant within the past five years ( see Schrader Decl., Ex. E (Saron Depo. at 32:13-33:23);
• Mr. Saron's testimony that the AA03 has a shelf life of approximately four years ( see id. at 47:7-10);
• Mr. Saron's testimony that there were AA03 devices on the market potentially still in use with the old warning ( see id. at 47:14-48:9);
• Mr. Kozloff's testimony indicating that he was aware of prior fires that occurred since 1994 in surgeries where a Bovie cautery device was used ( see id., Ex. C (Kozloff Depo. at 71:6-23); and
• the undisputed fact that defendant did not disclose the revised warning to Dr. Pirouzian.
Viewing the evidence and drawing all inferences in the light most favorable to plaintiff, the evidence raises a genuine dispute of material fact as to whether defendant acted with fraudulent intent in failing to disclose the revised warning.
C. Reliance
Finally, defendant contends that plaintiff cannot establish a claim for fraud because she cannot show that Dr. Pirouzian relied on the allegedly defective original warning, citing to the following exchange at his deposition:
Q: And you never saw a warning in any Bovie medical device that you have used in connection with Ms. Butler's surgery?
A: That is correct.
(Dopson Decl., Ex. A (Pirouzian Depo. at 150:10-13)).
However, for purposes of establishing fraudulent concealment, the issue is whether Dr. Pirouzian was unaware of the revised warning and whether he would have acted differently if he had known about it. See Lovejoy, 92 Cal.App.4th at 96 (in order to establish a claim for fraudulent concealment, "plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact"). As noted above, there is a genuine issue of material fact as to whether the revised warning would have affected Dr. Pirouzian's conduct. Accordingly, summary judgment cannot be granted.
IV. ORDER
Based on the foregoing, defendant's motion for summary judgment on plaintiff's claims for fraudulent concealment and punitive damages is denied.
No report made under [21 U.S.C. § 360i(b)(1)] by
(A) a device user facility,
(B) an individual who is employed by or otherwise formally affiliated with such a facility, or
(C) a physician who is not required to make such a report,
shall be admissible into evidence or otherwise used in any civil action involving private parties unless the facility, individual, or physician who made the report had knowledge of the falsity of the information contained in the report.
The statute defines "device user facility" as "a hospital, ambulatory surgical facility, nursing home, or outpatient treatment facility which is not a physician's office." Id., § 360i(b)(6).