District Court Erred By Not Allowing Plaintiff to Amend Complaint After 12(b)(6) Dismissal

December 23, 2010

On December 23, 2010, the Seventh Circuit dealt with federal preemption and sufficient pleading of a plaintiff’s claim that she has been injured by a medical device allegedly manufactured in violation of federal law in Bausch v. Stryker Corp., 630 F.3d 546 (7th Cir. 2010), Case No. 09-3434. We will not be addressing the specifics of the preemption issues here, because we find the Court’s discussion of the pleading standards to be more generally applicable for Indiana lawyers.

In Bausch, the plaintiff sued, alleged that the defendants violated federal law in manufacturing a hip replacement (the “Trident”). The Trident was implanted in her body six days after the United States Food and Drug Administration informed the defendants that a component of the Trident was “adulterated” and that the companies’ manufacturing processes failed to comply with federal standards. The Trident implanted in the plaintiff failed, requiring surgical removal and replacement of the product and leading to a host of serious and painful medical problems. The defendants later recalled a component of the Trident bearing the same catalogue number as the one that had been implanted in the plaintiff’s body. The defendants moved to dismiss the action under Rule 12(b)(6). The trial court granted that motion and did not allow plaintiff a requested opportunity to amend her complaint. The plaintiff appealed.

On appeal, the Court first discussed preemption issues and held that the plaintiff’s claim was not preempted. The Court then turned to whether the plaintiff sufficiently plead her claim under federal law.

In this discussion, the court appears to lessen the pleading standard that a plaintiff must meet if the information that a plaintiff would need to prove her case is legally required to be kept confidential.

In applying that standard to claims for defective manufacture of a medical device in violation of federal law, moreover, district courts must keep in mind that much of the product-specific information about manufacturing needed to investigate such a claim fully is kept confidential by federal law. Formal discovery is necessary before a plaintiff can fairly be expected to provide a detailed statement of the specific bases for her claim.

[I]n the context of Class III medical devices, much of the critical information is kept confidential as a matter of federal law. The specifications of the FDA’s premarket approval documents, for example, are confidential, and there is no public access to complete versions of these documents. An injured patient cannot gain access to that information without discovery. If the problem turns out to be a design feature that the FDA approved, section 360k will protect the manufacturer. But if the problem turns out to be a failure to comply with the FDA’s legally enforceable conditions for approval of the device, section 360k will not protect the manufacturer.

Here, there has not yet been an opportunity for discovery, and Bausch never waived discovery. For her to plead with any more detail that her claims were “based entirely on a specific defect in the Trident that existed outside the knowledge and regulations of the FDA,” she would need access to the confidential materials in the premarket approval application setting forth the medical device’s specifications. This is simply not possible without discovery. It is also unreasonable to expect that Bausch could have pled more specifically without access to the failed Trident itself, but accessing the Trident outside of a discovery process would risk charges of spoliation of evidence, as Bausch’s counsel acknowledged at oral argument.

The Court held that the plaintiff sufficiently pled her claim.

Finally, the Court addressed the district court’s refusal to allow the plaintiff to amend her complaint. It held that the district court abused its discretion because “the plaintiff was entitled to wait and see if any pleading problems the court might find could be corrected.”

One objective of Rule 8 is to decide cases fairly on their merits, not to debate finer points of pleading where opponents have fair notice of the claim or defense. Generally, if a district court dismisses for failure to state a claim, the court should give the party one opportunity to try to cure the problem, even if the court is skeptical about the prospects for success.

We can learn a couple of things from this decision. First, plaintiffs will use this to argue that they cannot be expected to plead specifics when those specifics are kept confidential by the defendant. Defendants will, in turn, argue that this only applies when the information is legally required to be kept confidential.

Second, the Seventh Circuit does not look favorably on dismissing a complaint under Rule 12(b)(6) without giving the plaintiff an opportunity to amend.

Lessons:

  1. A plaintiff cannot be expected to plead details that are legally required to be kept confidential.
  2. A district court which dismisses a complaint under Rule 12(b)(6) should generally give the plaintiff an opportunity to amend.
Brad A. Catlin
Price Waicukauski & Riley, LLC
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