Boutte v. Stryker Biotech, LLC

Citations: 67 F. Supp. 3d 732; 2014 U.S. Dist. LEXIS 175921; 2014 WL 7251162Docket: Civil Action No. 14-00456-BAJ-SCR

Court: District Court, M.D. Louisiana; December 21, 2014; Federal District Court

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Defendants Stryker Biotech, LLC, Howmedica Osteonics Corp., and Stryker Corporation filed a Rule 12(b)(6) motion to dismiss claims brought by William F. Boutte, Jr. for failure to state a claim. Boutte opposes the motion and has requested leave to amend his petition if any part of the motion is granted. The case, originally filed in the Nineteenth Judicial District of East Baton Rouge on June 17, 2014, was removed to federal court based on diversity jurisdiction. Boutte's claims include defective products, redhibitory defects, negligence, and fraud, stemming from his surgeries on November 15 and 16, 2006, involving the implantation of two medical devices filled with a mixture of OP-1 Putty and Calstrux. He alleges that this combination resulted in adverse effects such as nerve damage and the need for additional surgery. OP-1 Putty, approved by the FDA under a Humanitarian Device Exemption, is intended for bone regeneration, while Calstrux serves as a bone void filler. Despite individual FDA approvals for these products, their combination has never been approved, with Stryker's application rejected due to safety concerns. Nevertheless, Stryker promoted the off-label use of the combination despite reports of adverse effects from its employees and consultants.

A proposed 'Dear Doctor' letter was drafted by several employees, including the vice president of regulatory, to warn surgeons against mixing Calstrux with OP-1 due to safety and efficacy concerns. Despite the warning, sales representatives persuaded the company to withhold the letter to avoid negatively impacting OP-1 sales. Boutte alleges that Stryker and its sales representatives promoted and encouraged the off-label use of Calstrux with OP-1, resulting in his debilitating injuries from the implantation of this combination in his lumbar spine, prompting him to seek legal recourse. 

The document also outlines the standard for a Rule 12(b)(6) motion to dismiss, emphasizing that a complaint must present sufficient factual matter to establish a plausible claim for relief, while avoiding mere labels or formulaic recitations. It is noted that claims based on invalid legal theories must be dismissed. Additionally, the Louisiana Products Liability Act (LPLA) is referenced as establishing the exclusive liability theories for manufacturers regarding product-related damages, limiting claimants to the theories specified within the LPLA.

To establish a claim under the Louisiana Product Liability Act (LPLA), a plaintiff must demonstrate three elements: (1) the defendant is a manufacturer, (2) the injury was proximately caused by a product characteristic that rendered it unreasonably dangerous in one of four specified ways, and (3) the injury occurred during a reasonably anticipated use of the product. A product can be deemed unreasonably dangerous due to defective design, defective composition, inadequate warnings, or breach of warranty. In this case, Boutte's petition invokes three of these theories, focusing on design defect.

For a design defect claim, the plaintiff must show that at the time the product left the manufacturer’s control, (1) an alternative design existed that could have prevented the injury, and (2) the risk and severity of injury from the original design outweighed the burden of adopting the alternative design. Stryker seeks to dismiss Boutte’s claim, asserting that his allegations are conclusory and lack evidence of an alternative design. However, Boutte argues that he has sufficiently detailed the defects in the OP-1/Calstrux device, specifically citing concerns over product deterioration leading to complications.

Boutte claims an implicit alternative design that would avoid deterioration and suggests that Stryker should not have promoted the off-label combination of OP-1 and Calstrux. He highlights that Stryker originally believed OP-1 was insufficient alone and developed Calstrux as a companion product, which the FDA never approved for combined use due to safety risks. Despite the FDA's denial, Stryker promoted the combination. The Court finds that Boutte has adequately alleged facts supporting the alternative design requirement and has also met the criteria regarding the likelihood and severity of potential damages compared to the burden on Stryker to adopt the alternative design.

Boutte claims that Stryker ignored internal recommendations to withdraw Calstrux from the market after discovering it caused serious adverse events and was ineffective. Stryker considered sending a warning letter to surgeons about the risks of combining OP-1 with Calstrux but ultimately refrained due to concerns it would negatively impact OP-1 sales. In 2009, Stryker stopped manufacturing Calstrux. Boutte argues that the legal standards set forth in Twombly and Iqbal apply, but highlights that this is a complex medical device case with most evidence held by Stryker or restricted by a protective order, making it difficult to provide specific allegations about defects without discovery and expert analysis. The Court finds that Boutte has met the necessary standard for notice under Rule 8(a)(2), denying Stryker’s motion to dismiss his design defect claim. 

For the inadequate warning claim, Boutte must demonstrate that the product had dangerous characteristics and that Stryker failed to provide adequate warnings. He alleges that the combination of OP-1 and Calstrux was ineffective and could lead to severe complications, and he describes personal injuries stemming from the product's use. The Court accepts Boutte's allegations as true, concluding that he has established both elements of his inadequate warning claim, noting that Stryker promoted the products for unapproved uses and failed to adequately inform users of the associated risks.

Stryker argues that the package insert for OP-1 Putty warned against localized ectopic bone formation, a side effect Boutte claims occurred from mixing OP-1 with Calstrux. However, Boutte’s allegations relate to this mixture as a separate product, bolstered by the fact that Stryker withdrew Calstrux from the market after an FDA inspection revealed illegal off-label promotion and failure to report serious adverse effects. The Court determines that Boutte's petition presents adequate factual grounds for a plausible inadequate warning claim, leading to the denial of Stryker's motion to dismiss this aspect of the case.

For the breach of express warranty claim, a plaintiff must show the existence of an express warranty, inducement to purchase based on that warranty, and that damages resulted from its untruth. Stryker cites a precedent where a lack of specificity in how marketing materials were false led to dismissal. However, Boutte contends that Stryker misrepresented the safety and effectiveness of the OP-1/Calstrux mixture, alleging a coordinated marketing effort that misled the medical community while knowing the combination was untested and unsafe. Boutte claims that reliance on Stryker's assurances led to the harmful use of the mixture in his surgery, resulting in complications. The Court finds that Boutte has sufficiently alleged the elements necessary for a breach of express warranty claim, thereby denying Stryker's motion to dismiss this claim as well.

Under Louisiana law, sellers are required to warrant buyers against redhibitory defects in sold goods (La. Civ. Code art. 2520). While the Louisiana Products Liability Act (LPLA) sets the exclusive liability framework for manufacturers regarding injury claims, courts have allowed redhibition claims for economic losses (Pipitone v. Biomatrix). Stryker argues that Boutte’s redhibition claim should be dismissed since he did not purchase the products OP-1 or Calstrux. However, Boutte counters that Stryker's assertion lacks legal authority, and he provides evidence of defects in his petition. Courts have permitted similar redhibition claims, leading the Court to reject Stryker's dismissal argument at this stage.

Boutte has withdrawn his fraud claim, recognizing it falls outside LPLA coverage, making its dismissal appropriate. Stryker contends Boutte's negligence claim is also barred by LPLA exclusivity. Boutte argues that in prior litigation, Stryker claimed only Stryker Biotech, LLC manufactured the products, suggesting that Stryker Corporation might not be subject to LPLA exclusivity, allowing his negligence claim to proceed. Alternatively, Boutte offers to dismiss his negligence claim if Stryker Corporation stipulates its role as a manufacturer. In response, Stryker refuses to make such a stipulation, asserting that LPLA exclusivity applies to parent companies of manufacturers, citing Andry v. Murphy Oil as supporting authority but omitting the caveat that liability requires proof of the parent company's knowledge and approval of the subsidiary's actions.

Boutte's petition alleges that Stryker Corporation directed Stryker Biotech to conceal adverse experiences related to the combination of OP-1 and Calstrux and delayed the recommendation to remove Calstrux from the market. If true, this suggests Stryker Corporation played an active role in the marketing and warning strategies regarding these products. Consequently, dismissing Boutte's negligence claim against Stryker Corporation at this stage would be inappropriate. 

The court's conclusion states that the Defendants’ Motion to Dismiss is partially granted and partially denied. Specifically, the motion is denied regarding Boutte's claims for design defect, inadequate warning, breach of express warranty, and redhibition under the Louisiana Products Liability Act (LPLA). However, the motion is granted concerning Boutte's claim of fraud. Claims against Holly K. Pisarello were dismissed due to fraudulent joinder, and all claims against her were voluntarily dismissed without prejudice. 

The LPLA serves as the exclusive means for asserting manufacturer liability in Louisiana, meaning any inconsistent claims must be dismissed. Although Boutte labeled the dismissal of his fraud claim as voluntary, it is actually compulsory under the LPLA. The document notes that it remains unclear whether Stryker Corporation qualifies as a seller under the LPLA, as neither the petition nor the responses provided clarity on this issue.