Law

Express warranty can assume greater importance in preemption cases.  Some courts view “express warranty” as based on voluntarily-made statements that aren’t governed by the FDA and thus don’t involve preemptive “requirements” when made by manufacturers of PMA medical devices.  That sentiment is particularly strong in the Third Circuit.  See Horn v. Thoratec Corp., 376 F.3d 163, 168 n.7 (3d Cir. 2004); Michael v. Shiley, Inc., 46 F.3d 1316, 1325 (3d Cir. 1995).  Also, a number of states have tort reform statutes that abolish just about all pre-existing common-law causes of action.  Express warranty is often one of the few exceptions allowed in addition to the statutory cause(s) of action.

The latter scenario was the occasion of the Third Circuit’s excellent smack down of an exclusively express warranty class action in In re Avandia Marketing, Sales Practices & Products Liability Litigation (D’Apuzzo), ___ F. Appx. ___, 2014 WL 5334729 (3d Cir. Oct. 21, 2014).  Plaintiff D’Apuzzo, a New Jersey resident, sought to bring a no-damages class action for purely economic loss to recover “for the higher cost, including co-payments” that he allegedly suffered because the drug in question was more expensive but purportedly no better.  Id. at *1.  New Jersey, however, has a comprehensive product liability statute that both abolishes common-law causes of action and prohibits actions for purely economic loss.  Id. at *1 & nn.7-8.  The statute was clear, and New Jersey authority controlling, so plaintiff appealed only the dismissal of his express warranty claims.

The district court had Twiqballed the express warranty claims because, as we’ve already mentioned, plaintiff failed to plead any language that constituted an express warranty.  Id. at *2.  The Third Circuit could have rendered a TwIqbal decision on express warranty, but avoided doing so:

The substantive elements of a UCC express warranty claim are:  “(1) [defendant] made an affirmation of fact, promise, or description about the product; (2) this affirmation of fact, promise, or description became part of the basis of the bargain for the product; and (3) the product ultimately did not conform to the affirmation of fact, promise, or description.”  Id. at *3 (citing New Jersey UCC, §12A:2-313).  The only statement that plaintiff pointed to as supposedly constituting an express warranty was a general statement that the drug at issue was “safe and effective.”  Id.

Thus the question that the Third Circuit decided is of general interest – “whether the statement that [a drug] is ‘safe and effective’ for its intended use − contained on a label disclosing contraindications, risk factors, and potential side effects − is sufficient to create an express warranty.”  Id. at *4.  Notably this “safe and effective” information is required by the FDA.  Id. at *3 (“FDA regulations required [the manufacturer] to disclose the highest dose for which the safety and efficacy of [its drug] had been established in clinical trials”).

The Third Circuit held as a matter of law that no espress warranty was created, and thus affirmed dismissal of the express warranty claims.  The “safe and effective” language did not relate sufficiently to any claim involving any particular person.  “[T]he statement D’Apuzzo cites, when considered alone, does not claim [the drug] will be safe and effective in every case for every consumer.”  Id.  That could not be an express warranty, particularly “when considering the entirety of the [product] label”:

Because New Jersey case law hadn’t addressed the question, D’Apuzzo looked to cases interpreting identical UCC language in other states.  Id. at *4.  The court followed prescription medical product cases from Connecticut and Ohio that interpreted the same provision.  Id. (citing Basko v. Sterling Drug, Inc., 416 F.2d 417, 428 (2d Cir. 1969); Fraser v. Wyeth, Inc., 857 F. Supp.2d 244, 257-58 (D. Conn. 2012); In re Meridia Products Liability Litigation, 328 F. Supp. 2d 791, 818 (N.D. Ohio 2004)).  This precedent enforced a “well-established principle that ‘safe and effective’ are relative terms in the pharmaceutical industry – ‘safe’ drugs harm some people and ‘effective’ drugs do not work in every case.”  D’Apuzzzo, 2014 WL 5334729, at *4 (citation omitted).

Therefore only “unqualified representation[s]” or “absolute assurances” of safety could qualify as enforceable express warranties.  Id. at *4-5.  The purported class action failed because plaintiff “does not allege [defendant] made unqualified promises or affirmations of fact regarding [the drug],” “has not alleged [defendant] promised [the drug] would be safe for all consumers,” and the defendant’s “disclosure of [the drug’s] contraindications, risk factors, and potential side effects on the drug’s label indicates [it] did not make such an unqualified guarantee.”  Id.  An express warranty claim based on nothing more than a product label’s FDA-required “safe and effective” statements could not survive:

Finally, the plaintiff argued that an express warranty could be established by something that wasn’t “express” at all – “fail[ure] to disclose or understated known [product] risks that rendered [the drug] potentially dangerous.”  Id.  Nice try; no cigar.  Non-disclosure wasn’t an express warranty claim at all:

All in all, D’Apuzzo is a most useful opinion for dispatching the kind of bogus express warranty claims most typically asserted in drug and medical device product liability litigation.  Our only regret is that it’s not a “precedential” opinion published in F.3d.